The COVID-19 pandemic has wreaked havoc on businesses across Canada, plunging the country into an economic downturn. To support small businesses during these challenging times, the Canadian government introduced the Canada Emergency Business Account (CEBA) in March 2020. This loan program has been a lifesaver for many small business owners, but with the economy still struggling and the pandemic showing no signs of slowing down, the big question on everyone’s mind is: will CEBA be extended again, and if so, how can businesses prepare? In this blog post, we’ll explore the latest updates on CEBA, discuss your options for CEBA loan repayment and refinancing, and offer some tips to help you get ready for whatever comes next.
As of January 2021, the CEBA program has been extended until March 31, 2021. This is the third extension of the program since it was initially launched, and it comes as a relief to many businesses struggling to stay afloat due to the pandemic. However, the government has not yet made any announcements about whether the program will be further extended or modified. That being said, it’s always a good idea to plan ahead and consider your options in case the program is not extended beyond March 31st.
One of the key things to consider is your CEBA loan repayment plan. The terms of the CEBA loan state that borrowers must repay the full amount of the loan by December 31, 2022, or else the loan will be converted into a non-repayable loan. If you’re struggling to make your payments, the first thing you should do is contact your financial institution to discuss your options. You may be able to negotiate a lower interest rate, extend the repayment period, or consolidate your debt to make your payments more manageable.
Another option to consider is CEBA loan refinancing. This involves taking out a new loan to pay off your existing CEBA loan, ideally at a lower interest rate. Refinancing can be a good option for businesses that are having trouble repaying their CEBA loan on time or that want to take advantage of more favorable interest rates. Keep in mind, however, that refinancing will reset the clock on your repayment period, so it’s important to carefully consider the pros and cons before moving forward.
In addition to planning for CEBA loan repayment and refinancing, there are other steps you can take to prepare for whatever the future brings. One option is to build up your emergency savings account to protect your business in case of unforeseen circumstances. Ideally, you should have at least six months’ worth of expenses saved up. You can also explore other sources of funding, such as grants, loans, or crowdfunding, to help diversify your revenue streams and reduce your reliance on CEBA.
Finally, it’s always a good idea to stay informed about the latest updates on CEBA and other government programs that may impact your business. Follow relevant news outlets, sign up for email updates from the government, and connect with other small business owners in your community to stay on top of important announcements and industry trends.
Conclusion:
The future is uncertain, but with the right preparation and a bit of creativity, you can weather any storm. If you’re a CEBA loan borrower, take the time to carefully consider your options for repayment and refinancing, and make sure to plan ahead in case the program is not extended beyond March 31st. Building up your emergency savings and exploring other sources of funding can also help protect your business in the long run. With a little bit of foresight and planning, you can navigate these challenging times and emerge stronger on the other side.
