The federal government is being pressured to forgive a greater portion of the Canada Emergency Business Account (CEBA) loans and extend repayment deadlines for those hardest hit by the pandemic, particularly female business owners, reports the Globe and Mail.
CEBA was launched in the early stages of the pandemic, offering interest-free loans of either $40,000 or $60,000 to nearly 900,000 businesses, totalling $49 billion. However, as of 31MAR, only 20 per cent of these loans had been repaid.
Currently, businesses that repay their loans by 31DEC will have $10,000 or $20,000 forgiven, depending on the loan size. However, starting 01JAN, no forgiveness will be provided, and interest will begin accruing at a 5 per cent rate.
Small businesses, particularly those in heavily affected sectors like food services, retail, and tourism, are struggling to repay the loans. These industries were also the most likely to apply for CEBA loans, with 82 per cent of accommodation and food services businesses and 78 per cent of tourism businesses seeking assistance. Notably, these industries also have a higher proportion of female owners.
By comparison, only 54 per cent of information and communication technology businesses applied for CEBA loans, which are predominantly owned by men.
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