Business in the last year has been worse than it was during the pandemic for Tina Hamlin, who runs a home decor company in Vancouver. High interest rates and rising costs mean that people are more likely to spend on necessities rather than the high-end furniture or antiques that her 7,000-square-foot store sells.

In addition, Coast Consignment, which is often a source for design props used in movies, has been impacted by the ongoing Hollywood labour strikes, which she said has hurt about 25 per cent of her monthly sales.

Under current economic conditions, Hamlin doesn’t believe she can repay a government loan given to businesses in 2020 to tackle the impacts of the pandemic, though it is due by the end of this year.

“We have close to $15,000 to pay back. We can’t just come up with that money right now without taking on additional debt,” she said. “We are all struggling so badly that most of us are barely hanging on and it’s a very awful feeling.”

Nearly 250,000 other small businesses who received the Canadian Emergency Business Account (CEBA) loan are also in danger of shutting down because they aren’t in a position to meet the government’s deadline of repaying the loan by Dec. 31, 2023, the Canadian Federation of Independent Business (CFIB) said in June.

The CEBA program offered interest-free loans of up to $60,000 to small businesses until June 2021. Repaying the loan by year-end would result in a loan forgiveness grant of up to $20,000. But companies that can’t meet the deadline will be charged interest of five per cent per year. In total, the program approved $49.2-billion worth of loans to around 900,000 businesses.

Source: Financial Post