Repaying business loans | Big black cloud straight ahead

The maintenance of motorcycles, recreational vehicles (ATVs) and tire studding no longer hold any secrets for Christian Paquette, in the field for 22 years. The owner of Atelier Christian Paquette, who received a sum of $60,000 under the CEBA during the pandemic, was convinced that he could repay his loan in cash. However, as the deadline approached, he had to apply for a personal loan. If we refuse him, he might have to say goodbye to his workshop in Saint-Hippolyte where he works in tandem with his daughter.

Atelier Christian Paquette went from 250,000 nails placed on mountain bikes and cars two years ago to 50,000 last year. This reduction in goodwill that the entrepreneur did not see coming partly explains why he is now struggling to repay the assistance received. To achieve this, Mr. Paquette had no choice but to request a personal loan, which would allow him to repay the sum of $40,000 on January 18 and keep $20,000 in grant, according to the rules established by the federal government. But for the moment, the entrepreneur is in uncertainty, since he still does not know if his financial institution will grant his request.

“It’s very long,” he says on the line. Everything is done over the phone. The loan officers are at home. We are no longer able to meet anyone. We sent them everything we could, if we could send the accountant, we would,” he says with a laugh.

Backtracking. At the height of the pandemic, Ottawa created the Canadian Emergency Business Account (CEBA) to give businesses a boost. Several of them received the maximum sum of $60,000. Of this sum, to obtain a pardon of $20,000 – therefore to retain a portion as a grant – they must repay $40,000 by January 18, 2024. This deadline was first set for December 31, 2022, then one year discount. In September, the federal government once again postponed it, but this time by a few weeks, until January. Businesses that fail to pay $40,000 by the new scheduled date will lose their subsidy and will have until December 31, 2026 to repay $60,000 at 5% interest.

This short reprieve will not change anything for many entrepreneurs, according to Juliette Brun, founder of Juliette & Chocolat. The businesswoman, who announced in August the closure of her eight establishments because she was suffocating under reimbursements, has in some way become the symbol of this crisis experienced by several SMEs.

The case of Sylvie Masson, owner of the L’Aquavin du Cellier boutique in Terrebonne, illustrates this point well. When asked if this postponement will allow her to repay the $40,000 she owes, she responds without hesitation in the negative. “I had lots of expenses, I am unable to repay the debt. »

In business for 17 years, the entrepreneur who sells water bottles, coolers, but also personalized cups and glasses, was forced to leave her 1,800 sq. ft. premises.² due to the increase in rent. Before moving to a new location representing half the size of its previous space, it had to store its merchandise in a garage for two months. The 60-year-old woman can no longer count on the small team of three employees she had formed. She is now alone on board with her son who is toying with the idea of ​​taking over.

Unanswered questions

Sylvie Masson tried to take steps with her financial institution to obtain a loan. Currently she is on hold. “There is no one who doesn’t know anything,” she says. At the Royal Bank, when I called, they told me to wait. Everyone waits after everyone else. »

The owner of L’Aquavin is giving herself “a great year” before sealing the fate of her business. Until then, she’s crossing her fingers that her holiday season will be profitable.

M^me Masson, like other entrepreneurs, feels a little left to her own devices in this situation. Questions remain unanswered and no resources appear to be available to help him evaluate his options. “There is no support at all,” also confirms Christian Paquette. The banks are very independent. »

“The fact of talking about it opened the discussion with many people who were in the same situation as me,” says Juliette Brun, almost three months after announcing the closure of her restaurants. It allowed these people who felt a little isolated in their challenge to talk about it with someone who experienced it before them and who was not judgmental. Because the support is very limited,” she adds.