Dozens of small businesses in northern Ontario that survived the COVID pandemic thanks to government loans are facing a repayment deadline on Thursday and struggling to come up with the tens of thousands of dollars they borrowed.
Gail Mills, who has run the Bermuda Tan salon in Timmins for 35 years, says she was “fortunate” to get a bank loan to help pay back the $40,000 she borrowed from the federal Canada Emergency Business Account or CEBA.
“This is D-day for a lot of people,” she said.
“We knew we would have to pay it back, but a three-week deadline was a little bit of an insult.”
The federal government had already extended the deadline twice and has said doing it again could cost taxpayers $900 million, but Mills says a longer repayment period or lower interest rates would be a “big help” since business has not completely recovered.
“It’ll never be pre-COVID. I’ve come to terms with that. Life is different now,” said Mills, adding she knows of several small businesses in Timmins that are closing for good this year.
Lola Jones, who sells clothes and home decor at Varied Treasure in North Bay, still isn’t sure if she’s going to make the deadline to pay back her $60,000 loan.
With a mortgage and other bills to pay, she said she had no choice, but to get a loan when her shop was “shut down flat” by COVID restrictions.
“It was basically our lifeline to survive,” Jones said.
“I mean I know it was a loan and yes a loan you’re entitled to pay back, but I just found it very unfair that business owners had to get a loan to survive, but everyone else, employees of a business when they were shut down they were able to live and receive money, but they don’t have to pay it back.”
She worries about repaying the loan at a time when “every customer that comes in is talking to me about how they’re finding it hard to make their car payments.”
At Thunder Bay clothing manufacturer Ungalli, owner Hailey Hollinsworth says this Christmas sales season was “quite rough” but “we had to use pretty much any profit that we made at Christmas to pay back this loan which now puts us in a rough spot starting the new year.”
“I’m really grateful that we have found it, but it’s definitely stressful,” she said of the $60,000 loan needed during the pandemic for “everything from payroll to rent to our own pay.”
Hollinsworth says post-COVID her business has shifted to online sales and more promotional clothing.
“We’re definitely in it for the long haul and we’re hopeful, but everything feels so unknown, so it definitely feels a little scary,” she said.