Canadian Small Businesses Face Crisis: Struggles with CEBA Loan Repayment and Challenging Market Conditions.
The Canadian Federation of Independent Business (CFIB), which represents the largest group of small and medium-sized enterprises in Canada, declared last Friday as a disheartening day for numerous Canadian small business proprietors.
The cause of concern is related to the Canada Emergency Business Account (CEBA) loan. Businesses that availed of this loan during the peak of the pandemic and are now unable to clear their remaining dues will miss out on a potential loan forgiveness of up to $20,000. Moreover, interest will start accumulating on any unpaid amount.
Approximately 900,000 businesses opted for these loans. For many, especially smaller establishments like restaurants and fitness centers, there was hardly any alternative as they had to shut down for extended periods, and survival became a significant challenge. Currently, as the loan repayment deadline approaches, some of these small businesses are at risk of shutting down.
It’s not just the burden of CEBA loan repayments that’s overwhelming these enterprises; the prevailing business environment is also a contributing factor.
The CFIB reports that only around 50% of small businesses have managed to regain their pre-pandemic sales levels. This situation, compounded by the increasing costs of operation, high inflation, and staff shortages, sets the stage for a possible surge in business bankruptcies.
Running a small business is always challenging, even in the best circumstances. Equally disheartening is the increasing complexity faced by Canadians in starting their own businesses.
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