by Morinville News Staff
Canadian Federation of Independent Business (CFIB) is calling on the federal government to increase the Canadian Emergency Bank Account (CEBA) loan amount (currently up to $10,000) as well as the forgivable portion.
A new CFIB survey of its members says small business owners are taking on large debt loads and dipping into personal savings to weather prolonged business disruption.
That survey finds that small businesses have taken on more than $150,000 in debt on average.
The same survey shows a third of business owners are behind on major bill payments, including rent and credit cards. Hardest hit in that regard are the hospitality, arts and recreation and personal services sectors with four in 10 saying they are behind on bills.
Thirty-seven per cent of business owners are using their personal savings to finance their business and 34 per cent are using credit cards – those numbers jump to 44 and 42 per cent respectively for businesses with fewer than 4 employees.
Median debt load for small businesses stands at $40,000, the amount of CEBA, but the average debt is greater than $150,000, according to the survey.
CFIB has urged the government to increase the amount businesses can borrow as an interest-free loan under CEBA, and raise the forgivable portion of the loan from 25 per cent to 50 per cent.
The business organization is also calling on the government to quickly enact the eligibility changes announced a few weeks ago so businesses with no payroll can qualify for the loans.
CFIB says it will send letters to Canada’s major banks, urging them to keep fees reasonable and make financing more accessible to small firms.