Lethbridge brewery offering community shares to help repay CEBA loans

Beers are seen boxed up at Theoretically Brewing Company in Lethbridge, Alta.

LETHBRIDGE, ALTA. -

As the deadline for Canada Emergency Business Account (CEBA) loan payments approaches, a Lethbridge brewery is offering up shares of its company to help ease the financial burden.

“We have a community buy-in for the company so we have opened up 300 Class C community shares within (the) company and people are allowed to purchase those shares – they’re $500 a piece,” said Kelti Baird, co-founder of Theoretically Brewing Company.

“The hope is that we will generate enough community buy-in and interest to help us over the hump with some of these upcoming expenses.”

Baird says rising costs, low beer volume sales per person in the country, loan repayments and interest rates have led to this decision.

“Five per cent interest will start to accrue annually on the loan, which is actually a far better lending rate than we as a small business can get from any banks right now, so it makes more sense for us to keep the loan through the government,” Baird said.

Across Canada, 898,271 businesses applied for CEBA loans for a total value of more than $49 billion.

Those loans were originally for up to $40,000 per business, but the limit was increased in December 2020 to $60,000.

More than half a million businesses country-wide availed themselves of the extra $20,000 in loaned money on the understanding the entire balance would need to be repaid in full by Dec. 31, 2022.

The federal government extended that deadline to Dec. 31, 2023, and then in September 2023 moved the date to Jan. 18, 2024.

Businesses that can’t make the payments will have until 2026 to repay the amount, but a five per cent interest applies over the next three years.

“One of the challenges is some of the big banks aren't willing to work with them to refinance so they're having to go to various other lending opportunities, which is really challenging and really stressful,” said Cyndi Bester, Lethbridge Chamber of Commerce CEO.

January is often the toughest and slowest month of the year for small businesses. Bester would like to see the deadline pushed to the end of the month, rather than the current deadline.

“Business was closed over Christmas and New Year's, when I’m talking about lenders and what-not, so interacting with anyone when that is a time when a lot of people are off, that was really challenging,” Bester explained.

In an emailed statement to CTV News last week, Katherine Cuplinskas, press secretary to federal Finance Minister Chrystia Freeland, said the government has made changes to allow more latitude in repaying the CEBA loans.

"The bottom line is that, if you are a small business and do not currently have the funds to repay your CEBA loan, you now have three years to repay it in full," wrote Cuplinskas.

"The additional flexibility that we announced (in September) is significant support for small businesses who might still be struggling to make ends meet."

According to those rules, businesses that do pay off the entire amount by the Jan. 18 deadline will have $20,000 of debt forgiven.

“We’d rather invest in our community than into a bank,” Baird said.

“The 18 days is not really an extension in terms of business, that's politics and they’re playing politics with a lot of people's livelihoods and we would prefer they don't do that.”

Baird said shareholders will be paid in dividends, be kept up to date monthly and will receive a 10 per cent discount on products.

Baird says the brewery won’t be going anywhere, but if the investment target isn’t met there will be a slight delay in business expansions over the next year.