Alberta businesses struggle to pay back CEBA loans as deadline looms

Alberta businesses struggle to pay back CEBA loans as deadline looms

A longtime, family-run boxing studio in Calgary is keeping up the fight to repay its federal government COVID loan but said it’s not looking promising.

Alberta businesses struggle to pay back CEBA loans as deadline looms

The deadline to repay the Canadian Emergency Business Account (CEBA) loan is the end of day on Jan. 18, but Luis and Dianna Raposo of Impact Boxing & Fitness told Global News they simply don’t have the money.

“We were able to put some aside, but not enough to pay back,” Dianna told Global News. “We just weren’t able to meet that mark.”

Raposo said the loan helped the business pay the bills — for a while. But eventually, for several reasons, any “extra” money dried up.

“You can’t save if you’re nickel and diming it from day to day with your business,” she pointed out. “You still have to operate. You still have to pay rent.”

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“For us to close our doors would just be heartbreaking.”

Dianna Raposo in front of Impact Boxing & Fitness.

Tomasia DaSilva

CEBA rules

Ottawa paid out close to $49 billion to nearly 900,000 businesses through CEBA. Eligible businesses can keep up to $20,000 of the max $60,000 loan if they repay the rest by the deadline. Otherwise, the government will charge five per cent interest and give them three years to pay.

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A spokesperson for the Office of the Deputy Prime Minister and Minister of Finance also told Global News it pushed the deadline back two times and there are options available to businesses — including refinancing.

The Raposos said they tried all refinancing routes but were ultimately turned away, including by their bank.

“We’ve reached out to a couple of financial institutions and their CEBA teams are very tight on the restrictions on what they’re going to lend,” Dianna said. “Even if we’ve done business with them for years and have good credit, they’re just not as eager to lend out that money.”

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The couple also considered refinancing their home but decided against it. They hope to retire one day in the future and said they didn’t want to carry any more debt.

“Really how much more debt do you want to be in? Do you want to refinance your house? Do you want to refinance more debt?”

“We’ve just said, ‘We’re stressed enough. Times are what they are, and we’ll just do what we can.’”

Many Alberta businesses in the same boat

Impact Boxing & Fitness is certainly not alone in this CEBA struggle.

Andrew Sennyah, Senior Policy Analyst, Legislative Affairs — Alberta for the Canadian Federation of Independent Business (CFIB), told Global News repayment is daunting for many small businesses.

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“We’re looking at is approximately a quarter of businesses in Alberta unable to repay the loan,” Sennyah said.

Sennyah added ultimately losing out on the $20K in forgivable funds may be the difference between businesses staying open or closing shop.

“It might be the one thing that shuts them down,” he said.

The CFIB said refinancing may be an option for some, but certainly not for all, but acknowledged many are going that route.

Merchant Growth, a non-traditional financial lender for small businesses across Canada, confirmed that. It told Global News it has seen a 75 per cent increase in applications and received 1,412 applications for refinancing in Alberta, the second highest provincial application rates behind Ontario.

The loss of small businesses in Canada

Sennyah said the CFIB has been lobbying with governments to see the benefit of extending the deadlines to no avail.

“It’s a slap in the face to small businesses who have been the lifelines of our communities.”

Impact has certainly been a lifeline, helping many well-known athletes train over the past 23 years. It’s also provided several community programs helping many troubled youth and refugees.

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It’s devastating. No one is helping us now,” Dianna said.

“I just feel that they’re not giving us any answers.

“The small business owners make Canada and they’re just not recognizing us and valuing our contributions.”

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