Thousands of businesses are still waiting for loans months after government pledges to help, group of businesses say


Five months after the Liberal government announced increased support for cash-strapped small businesses in the form of government guaranteed loans, tens of thousands of business owners still have not been able to access this helps, according to a group of leading companies.

The situation is causing stress and anxiety for people like Angela O’Brien, owner of Esteem Lingerie in West Kelowna, British Columbia. She applied for an additional interest-free loan of $ 20,000 under the Canada Emergency Account program.

O’Brien said that when she applied for the initial $ 40,000 CEBA loan last year, the process was “transparent” and the money was in her account a few days later.

Since asking for the extra money on application opening day in December, she said, she has spent hours on the phone struggling to find out why her application was not approved.

“Everyone was pointing fingers at everyone. Nobody seemed to have any information,” O’Brien told CBC News.

According to Corinne Pohlmann of the Canadian Federation of Independent Business (CFIB), around 60,000 to 80,000 businesses may still be waiting for the financial “lifeline” of additional CEBA assistance.

This rough estimate is based on conversations with federal officials, calls to CFIB from business owners and publicly available information on CEBA adoption, said Pohlmann, senior vice president of national affairs and partnerships. of the CFIB.

Export Development Canada (EDC) – which administers the CEBA program – and Small Business Minister Mary Ng’s office declined to say how many companies are still waiting for money.

An EDC spokesperson would only say that “a small portion of CEBA expansion candidates” have been “affected”.

EDC said in a media release that it was working with applicants who were unable to receive the loans to help them provide “further clarification or information.”

A ‘desperate need’ for help

It appears that the process by which business owners provide this information has itself encountered problems. An EDC official said it took extensive technical work between CEBA and the financial institutions, such as banks, that made the loans.

The official said the goal was to solve the problem “in weeks, not months”.

In the meantime, Pohlmann said, many companies have faced new lockdowns since the expansion began in early December.

“There is a real desperate need for this money,” she said.

Finance Minister Chrystia Freeland speaks to media in Ottawa before releasing her Fall Economic Statement on November 30, 2020. (Blair Gable / Reuters)

On Monday, the CEBA website was updated to recognize that the process is “taking longer” for some applicants.

Business owners have also been given a new extended deadline to resolve these issues.

Previously, small businesses had until the end of March to apply for CEBA expansion. This deadline has now been extended to May 7 for companies that need to provide additional information.

Canada’s Emergency Business Accounts were first launched in April, giving businesses access to $ 40,000 in interest-free loans guaranteed by the government. Up to $ 10,000 of an individual loan is forgivable if it is repaid before December 31, 2022. Almost 840,000 businesses have registered.

The problems began as the pandemic dragged on and the government decided to expand the program to provide businesses with better access to cash. On October 9, Finance Minister Chrystia Freeland pledged additional loans of $ 20,000, up to half of which would be forgivable.

WATCH | Small business owners facing long lead times for CEBA loans:

Small business owners trying to access additional loans through the Canada Business Emergency Account are frustrated with delays and unable to access the money they need. 1:59

Details on how to apply will be made available “in the next few days,” Freeland said at a press conference.

In fact, applications for the expanded loans did not open until December 4 – and although 470,000 of them applied successfully, many found themselves in the same situation as O’Brien.

The CEBA website tells applicants that once they have applied, uploaded the necessary documents and validated their eligibility, funds should be available within 10 to 15 business days.

Ng’s office declined a request for an interview. In response to several written questions, his office sent a brief statement that did not explicitly acknowledge any issues.

“We are working with over 200 financial institutions to finalize a process so that more eligible businesses can get the help they need as quickly as possible,” a spokesperson said.

Ng’s office handed EDC further questions.

O’Brien said that while she was grateful to the government for creating the CEBA loan program in the first place, more transparency during that process would have made life easier for small businesses like hers.

“Just patting your head and saying, ‘Don’t worry, we’ll take care of you’ is not a sufficient response,” she said. “It does not relieve stress.”

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