With the repayment deadline of January 18 approaching for the unforgiven portion of their Canada Emergency Business Accounts (CEBA) some Airdrie area businesses are feeling the pressure.
The CEBA is a financial relief measure launched by the federal government back in 2020 to support Canadian businesses affected by COVID-19. Small businesses and not-for-profits were able to apply for interest-free loans of $40,000 and $60,000. Those that qualified were forgiven (did not have to pay back) $10,000 on a $40,000 lone and $20,000 on a $60,000.
Marilyne Aalhus, Executive Director of the Airdrie Regional Chamber of Commerce provided some statistics from a recent survey that showed if small businesses in Alberta are able to pay back the full amount before the deadline.
"It's an overwhelming response of people feeling a huge amount of stress and a large number of businesses not sure how they'll be able to repay by that deadline."
Of the 533 businesses that answered the survey, 501 were CEBA recipients. 29 of those are in the Calgary region which includes Airdrie.
131 businesses have repaid the loan, 169 plan to pay before the deadline while 201 will not be able to pay before the deadline.
The Alberta Chamber of Commerce with the support of the Airdrie Chamber would like to extend the non-forgivable CEBA and Regional Relief and Recovery Fund (RRRF) repayment deadline to December 31, 2025.
"Banks are reaching out to all of those clients and you know, aggressively trying to remind them that if payment isn't complete prior to that date, then changes will start happening in their financial situation," stated Aalhus.
If a loan is still unpaid on January 19, 2024, it will convert to a term loan that does not amortize and has an annual percentage rate of 5 per cent. The principle must be repaid in full by December 31, 2026. Should a business close, repayment is still required.
"Now you're (the businesses) going to be dipping into your monthly revenues by paying all these interest rates. The bottom line is we want businesses to have more time to recover from the pandemic
The federal government extended the loan for holders who were in good standing and moved the deadline for repayment from December 31, 2023, to January 18, 2024, back in September. No new extension has been announced as of yet.
Over 125,000 businesses in Alberta were approved for CEBA.
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