Time is up for thousands of businesses in Ottawa and across the country to repay pandemic loans taken out as part of the Canada Emergency Business Account (CEBA) program.
Nearly 900,000 businesses took advantage of the CEBA loan program to weather the storm during COVID-19 lockdowns.
Advocates and business owners have been asking for more time, but after two extensions, the federal government isn’t budging.
“We are now far enough from the pandemic that we do have to wrap up pandemic programs,” Prime Minister Justin Trudeau said during a press conference on Wednesday.
Renee Hamilton, owner of Chew-That, a pet store in the city’s east-end, says the pandemic forced her to pivot and close two of her three store to take advantage of the CEBA loan.
“The impact was quite severe actually, having to close the doors and not allow customers to come in, the sales were just not there and I couldn’t keep my staff on,” said Hamilton.
Hamilton says she’s still recovering as the government tells CTV News the program is flexible enough to help struggling businesses.
Under the program, businesses could apply for up to $60,000 interest-free. Anyone who pays a bulk of that back, can get up to $20,000 forgiven.
If not, business owners have until the end of 2026 to repay the amount with a five per cent interest rate or take out another loan and still qualify for the forgivable portion.
“While people are applying for refinancing, they are being told they don’t qualify,” said small business advocate, Michael Wood.
“The other interesting thing is these interest rates are astronomical, some are credit card interest rates so we are going to see some of those challenges moving forward.”
Christopher Lord, owner of Kings Own Barbershop in Centretown, says he wants more time.
“We’re just being kicked while we’re down and I know personally a lot of businesses that are going to be closing because of these circumstances,” said Lord.
So far, it’s estimated nearly 70 per cent of CEBA funds have already been repaid. However, thousands of business owners face bankruptcy, according to the Canadian Federation of Independent Business.
“If you spend so many years putting X amount of money into a business, the last thing you want to do is close your doors,” said Lord.
Businesses who want to refinance their loans with a bank have until March 28 to set up the arrangements and still be eligible for the forgiveness portion.
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