Borrowers under a costly federal COVID-19 business loan program were typically small and heavily indebted, according to a Department of Industry report. Losses under the Canada Emergency Business Account are estimated in the billions..“In general loan recipients tended to be young businesses,” said the report SME Profile: Recipients Of The Canada Emergency Business Account. “Around 41% of them had been in operation for no more than 10 years. Most of these, 53%, were micro sized having no more than four employees.”.Parliament in 2020 introduced the program offering up to $40,000 in interest-free loans to businesses with a quarter forgiven on repayment. Loan terms were later expanded by cabinet to $60,000 with a third forgiven on repayment due Dec. 31, 2023..The Profile report said most borrowers were in service trades affected by pandemic lockdowns that lasted an average three months. “The accommodation and food services sector had the highest loan application rate (82%) followed by the tourism sector (78%),” wrote staff. “The tourism group includes businesses that operate in transportation, recreation and entertainment.”.About a fifth of borrowers, 18%, said they also borrowed on lines of credit, took out second mortgages and ran up credit card balances to stay afloat. Findings were based on a survey of 19,283 small business operators nationwide..Final default rates under the loan program are unknown. However cabinet in an Inquiry Of Ministry tabled in the Commons November 3 said taxpayers stand to lose at least $2.4 billion..Loans were originally due for repayment last month. Cabinet extended a repayment holiday for a year. “We have heard from businesses, they are looking for this flexibility,” Trade Minister Mary Ng said at the time..“I want to assure Canadian businesses we’ve had your back from day one,” said Ng. “We are going to continue to do that. We want to make sure we continue to work together so that we can get through his pandemic.”.A total 885,578 operators nationwide qualified for $48.4 billion in loans, by official estimate. “Over half of businesses, 54%, reported the Canada Emergency Business Account program was necessary and sufficient to extend operations,” analysts with Statistics Canada wrote in a 2020 survey of borrowers. “One fifth, 21%, said other types of government support were required in addition to CEBA.”
Borrowers under a costly federal COVID-19 business loan program were typically small and heavily indebted, according to a Department of Industry report. Losses under the Canada Emergency Business Account are estimated in the billions..“In general loan recipients tended to be young businesses,” said the report SME Profile: Recipients Of The Canada Emergency Business Account. “Around 41% of them had been in operation for no more than 10 years. Most of these, 53%, were micro sized having no more than four employees.”.Parliament in 2020 introduced the program offering up to $40,000 in interest-free loans to businesses with a quarter forgiven on repayment. Loan terms were later expanded by cabinet to $60,000 with a third forgiven on repayment due Dec. 31, 2023..The Profile report said most borrowers were in service trades affected by pandemic lockdowns that lasted an average three months. “The accommodation and food services sector had the highest loan application rate (82%) followed by the tourism sector (78%),” wrote staff. “The tourism group includes businesses that operate in transportation, recreation and entertainment.”.About a fifth of borrowers, 18%, said they also borrowed on lines of credit, took out second mortgages and ran up credit card balances to stay afloat. Findings were based on a survey of 19,283 small business operators nationwide..Final default rates under the loan program are unknown. However cabinet in an Inquiry Of Ministry tabled in the Commons November 3 said taxpayers stand to lose at least $2.4 billion..Loans were originally due for repayment last month. Cabinet extended a repayment holiday for a year. “We have heard from businesses, they are looking for this flexibility,” Trade Minister Mary Ng said at the time..“I want to assure Canadian businesses we’ve had your back from day one,” said Ng. “We are going to continue to do that. We want to make sure we continue to work together so that we can get through his pandemic.”.A total 885,578 operators nationwide qualified for $48.4 billion in loans, by official estimate. “Over half of businesses, 54%, reported the Canada Emergency Business Account program was necessary and sufficient to extend operations,” analysts with Statistics Canada wrote in a 2020 survey of borrowers. “One fifth, 21%, said other types of government support were required in addition to CEBA.”
