Many Small Canadian Enterprises Close Coronavirus Crisis Aid | Instant News


TORONTO / OTTAWA – Many Canadian small businesses are stumbling because of losses due to a coronavirus outbreak may not be eligible for the federal government and bank assistance designed to help them survive, said industry experts, with some of them closed or running out of cash.

The measures https://bit.ly/3e3A55Y include a number of government-supported loan options for small businesses, and a 75% three-month wage subsidy for all eligible companies, regardless of size, as well as lines of credit and higher deferral payments from the lender.

Small businesses are defined as having less than 100 employees, and constitute 97.9% of all Canadian companies. The coronavirus outbreak is expected to push the G7 economy into recession, and the loss of too many small businesses will undermine recovery after the pandemic has passed.

The Lender will not begin accepting applications for the Canadian Emergency Business Account (CEBA) until this week, with approval it may take at least several days. Meanwhile, it will likely be six weeks before wage subsidies are delivered.

Business leaders say the time period is too long, despite good intentions.

“Most small businesses have three weeks of cash in the bank,” said Chief Executive of the Canadian Chamber of Commerce Perrin Beatty. “Many of them are now locked up for three weeks … They are running out of money at a dramatic pace.”

Finance Minister Bill Morneau said last week the government “will move as fast as humanly possible” to get money to companies. Ottawa also promised additional assistance for the energy, aviation and tourism sectors.

Many companies also do not meet the https://bit.ly/34maKQ3 criteria for assistance because their salaries are outside the CEBA requirements and their income has not decreased enough or they are too new to qualify for 75% wage subsidies.

Some are considered too risky to expand credit options offered by lenders on a case-by-case basis.

A final March survey of 9,678 members of the Canadian Independent Business Federation (CFIB) showed 56% had no capacity for additional debt and about a third of closed companies were not sure they would be reopened.

About 80% of the 300,000 hotel industry workers have been laid off, said the Canadian Hotel Association’s CEO Susie Grynol.

While some members get help from lenders, “the members who need it the most don’t get flexibility and that is because they are most at risk,” he added.

Most credit unions are also currently excluded from guarantees by Export Development Canada (EDC) under a separate credit program https://bit.ly/2JKpbUw, making their customers absent. Many small businesses in Canada use credit unions as their main financial institution.

“We continue to raise this message to the highest level,” the Canadian Credit Union Association said in a statement last week. It said that EDC said it was working on an accelerated process to add more credit unions.

Kimberley Sabo, based in Ottawa, which sells specialty teas at craft shows and pop-up shops, had an accident several years ago, which caused late personal debt payments, making it a credit risk.

Sabo is one of the 15% of Canadian workers who are self-employed https://bit.ly/2XfkcTY, and like most of them, he does not employ anyone else https://bit.ly/2V7G5lq.

When the sales evaporated, he hoped to get help from CEBA, but in fact he did not meet the requirements.

“I might have to close,” he said. “When your cash flow decreases or doesn’t exist, or you have debt to the limit, (the bank) won’t lend you more.”

(This story corrects to add words dropped in the title.)

(Reporting by Nichola Saminather in Toronto and Kelsey Johnson in Ottawa; Editing by Denny Thomas and Dan Grebler)



image source

to request modification Contact us at Here or [email protected]

Leave a Reply

Your email address will not be published.