A new survey is showing 81% of businesses who took federal CEBA loans are concerned with being able to make the coming repayment deadline, with business owners planning on tapping retirement savings, taking out new loans and even selling assets to come up with the money.   In response, the Greater Langley Chamber of Commerce -- one of the province’s largest and most active chambers of commerce -- is appealing to the federal government for an extension of the repayment deadline for Canada Emergency Business Account (CEBA) loans, currently coming due at the end of the year.  Without an extension, this survey revealed 23% of businesses expect to miss the deadline and end up with thousands in more debt as they lose the forgivable portion of the loan.

Through a new survey of its membership, the Langley Chamber learned that 93% of businesses with CEBA loans support an extension to the repayment deadline, with 63% expecting “significantly negative impacts” for their business if no change is made.  (see table 1 below)  

The survey also asked businesses how they would come up with the funds to make the December 31 repayment deadline if no extension is offered: 24% expected to use their personal savings, 20% would take on personal debt, 43% would take on new business debt, and 30% expect to restrict hiring or business spending/investment.  Nearly 1 in 4 (23%) did not expect to make the repayment deadline.  (see table 2 below)

With less than 6 months to the deadline, the Greater Langley Chamber of Commerce is calling on the federal government to extend the repayment time, allowing for at least one additional year for all borrowers to repay the loan while still remaining eligible for the partial forgiveness.

“Unless the government acts to extend this deadline a lot of local businesses will face the prospect of losing the forgivable portion and could suddenly have tens of thousands in additional debt to bear,” says Cory Redekop, CEO of the Greater Langley Chamber of Commerce.   “I’ve spoken with business owners who, like our survey shows, are looking at using personal lines of credit, tapping into their home equity, pausing business investment, or even selling off assets like cars to make this payment, which I’m sure isn’t what the government intended as a result of this program.”

Launched during the pandemic, the CEBA program provided interest-free loans of up to $60,000 to qualifying businesses.  Repaying the loan by the deadline provides businesses with loan forgiveness of up to $20,000, but failing to do so would see that forgiveness lost and the program would become a traditional loan with interest.  122,890 businesses in BC were approved for these loans to help with the impact of the COVID-19 pandemic, but since have also faced supply chain disruptions, rising prices and inflation, and soaring labour costs, resulting in many businesses concerned with being able to meet the current repayment schedule of December 31, 2023.

“It would be a shame if we were to now start harming the very businesses that this program was designed to support in the first place,” adds Redekop.