Farmers face a significant financial hit if they don’t pay back their Canada Emergency Business Account loan by Jan. 18
WINNIPEG — It’s not the sort of thing you can afford to forget.
If farmers received money from the Canada Emergency Business Account during the pandemic, missing the Jan. 18 repayment deadline could be a sharp boot to the finances.
“It would be $20,000 evaporating,” said Marvin Slingerland, MNP’s national director for livestock services.
Nobody should assume the federal government will once more punt the repayment deadline down the road or entirely forgive the $60,000 loans.
“I think that is a trap people have fallen into.”
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The CEBA loans were provided to businesses across Canada in an attempt to keep struggling operations alive through the pandemic, when many had to close to the public, wrestled with employee layoffs or considered permanent closure.
These challenges weren’t a big deal in agriculture because most farms were able to keep operating, despite numerous challenges. Farming was one of the least affected sectors of the economy after the first few months of the pandemic.
However, thousands of farmers likely took advantage of the loans for various reasons and in differing situations, so there is no question some farmers are affected by the Jan. 18 drop-dead date for repayment.
Most farms have a lot of cash flow, so it shouldn’t be too challenging to find a way to redirect some money toward the $40,000 repayment total. If that amount is repaid, $20,000 is forgiven and never has to be repaid.
“There is a lot of cash flow coming in and going out,” said Slingerland.
“Compared to, say, a restaurant, where they might not have a lot of cash sitting around to pay this off, most farms can handle it.”
Farmers in a weak cash situation can still find creative solutions.
“If producers are short of cash, I would … recommend they speak with their banker,” said Slingerland.
After Jan. 18, interest also starts accruing on the loans, which have been interest-free to this point.
A farmer’s financial institution might be able to extend an operating loan to take up the $40,000 or create another loan. That would lock in the $20,000 forgivable portion.
“Most bankers have been able to find solutions,” said Slingerland.
If that isn’t possible, then an advanced payment through any of the farmer organizations such as the Canadian Canola Growers Association can fulfil the same purpose.
The most important step is dealing with the situation. A phone call to the bank could provide a lot of relief.
Above all, farmers should not forget about this deadline if they took advantage of the loan.
“The 18th is coming up pretty quickly,” said Slingerland.
“Most producers have been on the ball with it, but for those who aren’t, I would suggest they talk to their banker ASAP.”
