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A small business co-owner in Surrey has 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 COVID-19.
During the pandemic, many businesses across the country took out a Canadian Emergency Business Account (CEBA) loan from the federal government and the deadline — which has been pushed back several times — to pay back the loan is fast approaching.
But Peggy Berndt says some struggling small businesses, like her own, are having a hard time paying back their loan and she wants the federal government to find solutions that are more lenient for struggling businesses.
“It should be easy for them to determine who is in the position to pay back the loan,” Berndt said. “As a small a business, you don’t have deep pockets.”
She says smaller operations rely on a daily income to cover daily costs, like mortgages and groceries.
“Other businesses may have been able to pay back the loan, and that’s great that they could to it, but I don’t think small businesses are asking for a hand out,” she said. “We are asking to be treated fairly.”
Berndt says her small shop operated during COVID-19 as an essential service, but her business still lost money everyday.
“We thought everything would go back to normal, but it has gotten worse for small businesses because people aren’t coming in and the economy has changed,” she said.
In a statement to CityNews, the Office of the Deputy Prime Minister and Minister of Finance says 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 adds this flexibility is meant to support small businesses who are still struggling to make ends meet.
The CEBA website says business owners working to refinance their CEBA 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 December 31, 2026.
Berndt says she’s been told to take out another loan to pay back the CEBA loan, but she’s not pleased with that response.
“That’s not a solution. That’s like saying go get another credit card because the other one is already full,” she said. “That’s adding to a problem that already exists.”
Instead, she says the federal government should consider solutions that are more lenient for struggling business owners.
“For those that can prove they have suffered financially because of COVID-19 and the after effects, and we all file taxes so the government knows exactly how much we earn, it should be easy for them to determine who is in the position to pay back the loan,” she said.
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