Small Business Pandemic Loans Repayment
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By Bromwich+Smith Staff | 416 words | Reading Time: 2 minutes | Date: 2022/09/14
When the world first heard the term Corona Virus, or Covid-19, little was known about the future. As time went on, many businesses were forced to close their doors, employees were laid off without knowing when they could return to work, and the Federal Government quickly put in place financial assistance to both individuals and to small businesses.
The Canada Emergency Business Account (CEBA) was announced and quickly saw over 900,000 businesses receiving interest free loans up to $60,000 with a portion being forgiven if the balance is repaid prior to December 31,2023. With that date quickly approaching many businesses are receiving letters reminding them of their loan.
Export Development Canada (EDC) realized early on that there was not a built-in solution for collections, as the original loan requirements did not consider the credit of the loan recipient. They believe that over 100,000 recipients will need to be followed up on, with 40% being individuals who should not have qualified for the loan originally. The Federal Government has assigned the Canada Revenue Agency (CRA) to collect on delinquent payments.
What do I need to know if I received CEBA?
The first thing would be to look at your loan documents and be aware of the current balance. If you are able to repay the loan prior to December 31, 2023, you will be granted a loan forgiveness up to 33% of the total loan. Any balance paid after this, will result in the loan being owed in full with an additional 5% interest on top.
Many Financial Institutes added a personal guarantee in their CEBA lending documents, indicating that all loan recipients would be personally responsible for the repayment. Even if you were not able to keep your small businesses doors open, you will be held liable for the repayment.
We know that many small business owners also received CERB during this financially difficult time. Did you receive CERB Repayment letter from CRA? (bromwichandsmith.com) , we have helpful information on what you need to know. If you are in a position where you are unable to repay the government loans and are struggling financially don’t make any major decisions until you talk to a professional Debt Specialist. Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page. We want to see you flourish!