Over 200,000 small businesses took on new debt to repay their CEBA loan

Only two days left in special refinancing extension  

Toronto, March 26, 2024 – A staggering 200,000 small businesses (or 23%) were forced to take on new debt to refinance their Canadian Emergency Business Account (CEBA) loans in order to retain access to the forgivable portion, says the Canadian Federation of Independent Business (CFIB).  

In addition, there are over 50,000 small firms (6%) that are still pursuing a special extension to March 28 for those in the process of refinancing. There are less than 48 hours remaining for eligible businesses to secure this refinancing in order to keep the forgivable portion of the loan. 

“Many of those businesses that had to borrow to repay their CEBA loans are facing high interest rates and will be challenged to meet their payment obligations,” said Dan Kelly, CFIB president. “We need to remember while government got a lot of CEBA balances repaid, the debt for many businesses didn’t suddenly go away – it just shifted from a low interest government-backed loan to a higher interest bank loan. This should sound the alarm for policymakers, particularly given the business insolvencies are surging.” 

The business environment in Canada is far from being back to normal. CFIB data shows that the financial situation of their business is the primary concern for one in five (20%) small business owners. Business insolvencies are soaring, having jumped by 129.3% in January 2024 compared to January 2023, while latest data available shows more businesses were closing than opening in December 2023

As the government is winding down its CEBA program, CFIB is calling on Ottawa to: 

  • Implement a review process for CEBA loan holders deemed ineligible and introduce a three-year repayment plan. 
  • Ensure the maximum flexibility is used for those who have attempted to take out a refinancing loan to use the special extension to March 28. CFIB urges banks to accept any form of communication requesting refinancing as sufficient proof for the extension. 
  • Look at new ways to lighten the debt load for those who were unable to meet the January 18 deadline. 

“Small business owners face massive debt loads and cost increases, and many feel abandoned by the government and the way it handled the repayment of the CEBA program. Ottawa should do more to help them deal with the high cost of doing business and provide concrete financial relief measures in the upcoming federal budget, such as lowering the Employment Insurance premiums for small employers and returning the $2.5 billion in carbon tax revenue owed to small businesses,” said Corinne Pohlmann, Executive Vice-President of Advocacy at CFIB. 

CEBA loan holders can visit CFIB’s website to better understand their next steps. 

For media enquiries or interviews, please contact:  
Dariya Baiguzhiyeva, CFIB  

Final results for the Your Voice – February 2024 survey, conducted from February 8-21, 2024, and based on a sample of 4,092 CFIB members. For comparison purposes, a probability sample with the same number of respondents would have a margin of error of +/-1.5%, 19 times out of 20. Note numbers may not add up to 100% due to rounding. 

About CFIB 
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.