Recently the Canadian Federation of Independent Business (CFIB) published its findings of a study of its members ability to repay the CEBA government loans by December 31st 2023. It is expected that approximately 250,000 small and independent businesses, that represent about 19% of all small business in Canada will fail if they can’t get an extension!
When the government of Canada originally made these loans available during the pandemic, the appeal was the interest free borrowing, and the forgiveness of up to $20,000 of the original $60,000 offered. The penalty of not paying this back by December 31 2023, is the elimination of the forgiveness amount and the application of 5% interest on the balance starting January 1, 2024.
The numbers are not surprising of how challenging it has been to rebound following the Covid pandemic. With the significant rise in interest rates, consumer spending has been pulled back, and businesses that rely on consumers (B to C) are struggling to return to pre-pandemic business levels. The CEBA loans for many were not the only debt that was on a businesses balance sheet, and while the “free money” feeling of the CEBA offer, at a time when the sky was falling, was well received. Now with 6 months left before the repayment deadline, the challenge for survival is again real.
WallerCo Advisory is helping businesses in this situation, by focusing on the essentials to solidify its operating systems, simplify its processes, focus on the right strategy, and have the leadership to build back to a place where CEBA can be repaid, finances managed and a path to a successful future is clear.
It is expected that 43% of all CEBA loans will roll over into January 2024. WallerCo Advisory can help you plan to avoid this happening to your company, and help you build a sustainable and successful future. Visit us at www.wallercoadvisory.com
