Loan deadline everyone's watching is the end of year and it was only extended by 18 days: CFIB CEO
The federal government has once again extended the repayment deadline for its emergency COVID-19 business loans, as companies deal with rising costs and high inflation.
The new deadline to repay the Canada Emergency Business Account loans interest-free is Jan. 18, 2024, the federal government announced on a Thursday news release, nearly three weeks later than the previous Dec. 31, 2023 deadline.
Businesses can also apply for a refinancing extension through their banks that pushes the deadline to March 28, 2024.
For businesses unable to make the repayment deadline, the loan converts to a three-year term loan, with a five per cent interest rate. The repayment deadline of Dec. 31, 2026 represents a one-year extension of the previous deadline.
“Put simply, small businesses and not-for-profits will automatically have access to a three-year, low-interest loan of up to $60,000 if they have not repaid or refinanced their loan,” the government wrote in the release.
“This will provide those who are unable to secure refinancing or generate enough cashflow to repay their loans by the forgiveness deadline an additional year to continue repayment at a low borrowing cost.”
CEBA offered interest-free and partially forgivable loans of up to $60,000 to help keep businesses impacted by the pandemic afloat. Nearly 900,000 businesses in Canada took advantage of the program.
Business leaders have long been asking for a repayment extension, as higher operating costs and labour shortages hurt their bottom lines.
‘TOO LITTLE AND VERY LATE’
Dan Kelly, CEO of the Canadian Federation of Independent Business, said more relief is needed for businesses.
“This is too little and very late. Super disappointing,” Kelly told BNN Bloomberg on Thursday after the deadline extension was announced.
He is pushing for a one-year extension to the interest-free repayment deadline.
“It sounds a lot better than what is the reality,” he said of the federal announcement. “This is an 18-day extension to the loan period, not a one-year extension. Yes, they did add a year to the final repayment deadline of the end of 2026, but businesses right now are panicked.”