Page 32 - INSIGHT MAGAZINE - NoBleed_Neat

ADVERTORIAL
The Pandemic, Canadian Businesses,

and the Government’s Response

The financial burdens which the COVID-19 pandemic put upon Canadians was especially felt by Canadian businesses and their owners. The
unprecedented level of decreased revenue led many business owners to consider the stark possibility of closing for good when the most basic
of expenses and employee wages suddenly became unmanageable.
To address these effects on the cash flow of small businesses, the Canadian government began instituting financial relief programs. The
Canada Emergency Business Account (CEBA) was one such program designed to alleviate economic tension.
If you are a CEBA loan holder, then you likely enjoyed the much-needed benefits of the program during the pandemic’s difficult economic
climate. However, the deadline to repay the principal and any interest charges incurred is quickly approaching.
Developing a CEBA Repayment Plan Repayment After the Deadline
It is wise to build a repayment plan as soon as possible, especially After the December 31, 2023, deadline, the CEBA loan becomes a
if you’re not completely confident in your understanding of your two-year loan and begins accruing interest at a rate of 5% on January
CEBA loan’s conditions. A repayment plan is especially crucial if you 1, 2024 (the interest must be paid monthly). The principal of the loan
borrowed an amount approaching the upper limit of $60,000. must be repaid in full by December 31, 2025. If this is still impossible
Repayment of the loan is required in full by December 31, 2023 (this for you, then it is in your best interest to evaluate your eligibility for
deadline was extended beyond the initial deadline of December 31, loan forgiveness.
2022). Within the updated 2023 deadline, your repayment won’t CEBA Loan Forgiveness
accrue any interest so your payment strategy can be somewhat
flexible. There’s also no prepayment deadline, whether you pay back If you borrowed less than the initial maximum loan amount of
the principal in-full or in-part. As we approach the deadline, you can $40,000, you are eligible to claim 25% of the loan as forgiveness.
align your repayment strategy with your cash flow and budget. If the economic conditions of the pandemic caused you to borrow
more than $40,000 and up to the maximum of $60,000 then you
Finding the Money to Meet the December 31, 2023 can claim 25% of the initial $40,000 as forgiveness and 50% on the
Deadline additional amount. To guarantee qualification for loan forgiveness,
The harsh reality of today’s economic climate is that many businesses 75% of the initial loan and 50% of the subsequent amount must be
still don’t have the means to pay their CEBA loan by the end of the repaid by the December 31, 2023, deadline. If you do qualify, the
year. Factoring is a great solution for businesses who fall into this maximum forgivable amount for borrowing the full $60,000 limit is
category. At J D Factors, we offer these businesses our factoring $20,000.
services in which a percentage of each invoice factored is kept Healthy Cash Flow, Healthy Repayment Strategy
in reserve until there is enough to pay back the CEBA loan by the To avoid further financial stress associated with the repercussions of
December 31, 2023, deadline. The advantage of meeting this CEBA COVID-19 and the CEBA loan, it may be wise to add invoice factoring
deadline is that your company can keep the forgiveness portion of to your strategy. Factoring will help you maintain a healthy cash flow
the loan (see details below). so that you can draft a CEBA repayment plan with less anxiety. An
It is important to note that the terms of CEBA will change following invoice factoring company can pay any of your invoices immediately
the December 31, 2023, deadline. The terms of repaying CEBA after and collect payment from your clients later. With a steady cash flow,
the December 2023 deadline should be considered when deciding you’ll be better able to save for repayment or make monthly interest
when to repay the CEBA loan. payments. Learn more about J D factors to see how invoice factoring
can help you repay your loans.

Christian Hernandez

289-242-3178 | www.jdfactors.com
Contact Christian Hernandez at J D Factors about how invoice factoring can help your
business to stay afloat through the recession and come out the other side intact.

32 Fall 2023 www.cambridgechamber.com