Nearly 165,000 Quebec businesses still have six days to repay the $40,000 federal emergency loan (CUEC) that they received during the pandemic.
• Read also: “It’s not unexpected”: The end of Brasseries T! raises fears of a wave of closures
“Many thought that the deadline would be postponed, but that is not the case,” indicates Étienne Fiset, who is a partner and insolvency trustee at Raymond Chabot. Nine out of 10 SMEs have had loans. The majority of those in business have questions.”
If a business obtained a loan of $60,000, it must have repaid $40,000 by January 18 to have the rest as a grant. However, if this is not the case, she will have to repay the loan in full with interest over a period of three years.
“There are many who will not be able to repay, but it is not only this element that makes them come to see us,” adds Mr. Fiset. There is often a profitability problem and a lack of liquidity in daily operations.”
- Listen to Yves Daoust’s economic segment via
:
“Every situation is different.”
After the deadline, each company will still be able to repay the loan, but it will not be an easy thing.
“We need to know if they are capable of adding an expense of between $1,000 and $2,000 more to their monthly operations,” explains the trustee.
“For example, for a restaurant, the CEBA loan is only a drop in a glass that is already very full with the explosion of raw material and labor costs.”
According to the Canadian Federation of Independent Business (CFIB), 45,000 Quebec businesses are at risk of closing their doors after January 18. In Canada, more than 200,000 SMEs are at risk of closing due to their high debt.
Carole Paquette, owner of Rembourrage Carole, in Trois-Rivières, said last month that she will probably have to close her business. In fact, she does not believe she will be able to repay the loan granted via the Canadian Emergency Business Account (CEBA) on time.
Photo provided by Carole Paquette
Sadness and resignation
The owner of a clothing store in Blainville is already resigned. She will not be able to repay the amount owed by next week.
On the other hand, she will not be the only one. According to the firm Raymond Chabot Grant Thornton, only 10% of Canadian companies had managed to make their reimbursement in December.
“I’m doing average. We will not be able to reimburse the amount, says Nancy Cadieux. For the moment, we do not intend to take any of the options that are offered.
“We are down to the last one. I’m sad and angry.”
Mme Cadieux does not want to comment on the future of his business. However, a decision will be made by the end of January.
It was from October onwards that the carpet began to slide under his feet.
“We thought there would be another delay or another modification,” she adds. That didn’t happen.”
Important reminders about the CEBA loan
- Reimbursement deadline: January 18
- Number of requests in Quebec initially: 183,000
- Number of businesses that have defaulted on their loans to date: around 165,000
- Number of possible closures: 45,000
- Options by January 18 for businesses
Option 1
The company repays $40,000 of its $60,000 loan. The company receives the remaining $20,000 in grant. In the case of a loan of $40,000, the sum of $10,000 is transformed into a grant.
Option 2
The company does not repay the entire loan. The business loses the grant portion of the loan and must repay the entire loan over a three-year period (December 31, 2026) with interest.