The deadline to deal with the CEBA is fast approaching (January 18th) and for business owners who haven’t decided what to do about it, the time has come. An extension is possible but a better approach is to figure out what to do right now.
There are several ways to deal with it but the “best” solution is not the same for every business. Paying off the CEBA loan generates a very sizeable forgiveness which represents a huge “savings” of either $10,000 or $20,000 which unfortunately is also taxable.
If removing that much from working capital is not an option then arrangements with a financial institution need to be made. This takes time and options like a term loan, line increase or increase in credit limits need to be investigated.
The only other option is a “cash advance loan” and the pressure to take one will increase as the CEBA deadline approaches. It generates the forgiveness, but with high interest and a shorter payback period it can put a strain on cash flow that needs to be anticipated and managed.
January 18th, 2024 is not far away and I’m advising my clients to figure out their own best option now. Failure to do so will result in a missed opportunity or a hurried decision. It is also be a good time to look at overall working capital requirements and alternative financing.
True Viking Finance Inc is doing what it can to connect business owners to accurate, up-to-date information and help them gain a better understanding of their financing options.
The better informed we are, the better decisions we make!