'Everybody's scrambling': Deadline for businesses to pay back federal pandemic loans looms

A deadline is looming for small businesses in Manitoba and across the country.

Many of them took advantage of the interest-free loan from Ottawa – known as CEBA - of up to $60,000 to get through pandemic lockdowns.

Now, that money is due tomorrow and some businesses say they can't afford to pay on time.

Melissa Caci, the owner of The Next Gen Salon and Spa, took the loan when it was offered.

"Honestly, I wouldn't be here right now," she said.

For those businesses that can pay the full loan, up to $20,000 will be forgiven. If they don't pay, they'll be on the hook for the full amount at five per cent interest over three years.

Businesses can also refinance with their bank and still qualify for the forgivable portion. They have until March 28 to finalize.

"Everybody's scrambling right now and I don't know where people are going to come up with these funds."

Caci said she can't afford the full amount, so she has secured a private loan to pay on time. She said it's not ideal.

"It's a lot of money to be paying back every single month on my business when I still pay GST, PST and obviously bills for the salon."

The Canadian Federation of Independent Business (CFIB) said more than 23,000 businesses in Manitoba have CEBA loans worth $1.2 billion.

As of December, only 40 per cent had paid them back, with 17 per cent reporting they won't be able to meet the deadline.

"That means either they've had to make tough decisions – we've seen some close their doors already – or they had to jump through hoops to get financing," said Brianna Solberg with CFIB.

CFIB has asked Ottawa to extend the deadline, which has already been pushed back twice since the original due date at the end of 2022.

"The best we can do is ask the federal government to be flexible and understand that this is a stressful time for business owners."

However, it appears the deadline is set in stone.

"Businesses have a number of different options if they're facing challenges around the CEBA loans," Prime Minister Justin Trudeau said Wednesday.

Caci feels there should be more leeway with the repayment schedule because businesses like hers were forced to shut down.

"I barely made it through the pandemic."

The federal government loaned out $49 billion under the program with 900,000 businesses taking advantage across Canada.

Ottawa estimates 70 per cent of recipients have paid back the loans.