Surrey businesses ‘negatively impacted’ by CEBA repayments as deadline looms: SBoT

As the federal CEBA loan repayment deadline looms, the Surrey Board of Trade believes the repayment is hindering businesses in its city.

In a statement Tuesday, the SBoT said the Canadian Emergency Business Account (CEBA) loan repayment has proven to “be a double-edged sword.”

“[It’s] inflicting negative impacts that ripple through various sectors of the economy. As some businesses grapple with the financial burden of repaying
these emergency loans, a disconcerting trend emerges, marked by closures, stalled expansion plans, employee layoffs, and a general scaling down of operations,” it asserted.

During the COVID-19 pandemic, many businesses across the country took out a CEBA loan, often for $60,000 from the federal government.

The deadline — which has been pushed back several times — without losing $20,000 in loan forgiveness is Thursday, Jan. 18.

The SBoT sent its members a survey asking for their feedback regarding the loan repayment requirements. According to its members, some businesses may even have to close down altogether, CEO and President Anita Huberman said.

“The current economic environment is that of limited growth, and expecting small businesses to pay back this loan at this time is going to further put a strain on small businesses,” she said.

According to the SBoT survey, about 60 per cent of responding members are “experiencing challenges repaying the CEBA loan,” with just under 70 per cent of its respondents being required to pay back the loan by its deadline.

More than 30 per cent of the board of trade’s members surveyed shared that they did not feel confident in being able to pay back the full amount of their CEBA loan, however, more than 45 per cent said they did feel confident.

The SBoT’s survey results come after a small business co-owner in Surrey penned an open letter to the federal government, asking it to provide some relief to small businesses struggling to repay the loans doled out to them during the pandemic.

Peggy Berndt says some struggling small businesses are having a hard time paying back their loan and she wants the federal government to find solutions that are more lenient.

In a statement to CityNews on Jan. 8, the Office of the Deputy Prime Minister and Minister of Finance said the deadline has an incentive for partial loan forgiveness if paid by Jan. 18. and “… if you are a small business and do not currently have the funds to repay your CEBA loan, you now have three years to repay it in full.”

It added this flexibility is meant to support small businesses that are still struggling to make ends meet.

The CEBA website says business owners working to refinance their loan through the institution which provided it, now have until March 28, 2024, to benefit from the partial loan forgiveness.

If businesses don’t pay back their loans by the January deadline, or refinance, CEBA loans will be automatically converted into non-amortizing term loans with full principal repayment due on Dec. 31, 2026.