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Break or burden: Que. businesses taking loans to pay back CEBA by deadline

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Thursday is the deadline for businesses to pay back the Canada Emergency Business Account (CEBA) loans if they want to take care of federal loan forgiveness.

The deadline has some local businesses scrambling to pay it off, including taking out other loans to pay for this one.

At Backbone Bouldering Centre in Bromont, about an hour southeast of Montreal, paying their CEBA loan back was an uphill climb.

"We paid it back, but with a new loan from our bank," said manager Frederique Marseille.

Those who didn't pay back $40,000 of the $60,000 loan by today were inelligble to get back the $20,000 of loan forgiveness and pay no interest.

Backbone management borrowed from a bank to get that forgiveness, but now have to pay a higher interest rate.

"They had to offer us a new loan, with any interest rate, with any kind of solution, and we just had to sign," said Marseille. "We paid a loan with a worse loan."

Backbone Climbing Centre manager Frederique Marseille.

Schreter's Clothing on Saint Laurent Boulevard in Montreal planned for year to meet the deadline.

"I paid back about 10 days ago," said owner Steve Schreter.

Around 900,000 businesses took advantage of the program and those that didn't pay the $40,000 portion of the loan back will now have to pay the loan in full at five per cent interest over three years.

Schreter said that wasn't an option.

"It had to come from different places, unfortunately, business hasn't been that great since the pandemic," he said.

The CEBA deadline has been pushed back twice, and this week Prime Minister Justin Trudeau said that it would not be pushed again.

"We understand that things — even as the economy has bounced back from COVID — continue to be challenging, which is why we extended, twice, the repayment deadline for the CEBA loans," said Trudeau.

"But we are now far enough from the pandemic that we do have to wrap up pandemic programs," Trudeau said. "Pandemic supports, we all know, had to end at one point."

At Backbone, Marseille said what was billed as a break has turned into a burden.

"That's debt on debt on debt, so it was never a gift from the government to help us during the pandemic," she said.  

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