Covid assistance for businesses – do I have to repay it if I shut down?
With the latest shutdown, we have been talking to more business owners who are on the brink of permanently closing their businesses, or they have already done so and they don’t know where to turn. The government assistance just isn’t enough to see them through, and if they do continue, they are under a growing mountain of debt.
Some business owners believe they are obligated to re-open their business having accepted government assistance. Some believe that if they don’t re-open, all of the government assistance is repayable including CEWS and CERS (wage and rent subsidies). This is not the case. Re-opening or continuing to operate your business is your choice. If you decide to shut down permanently, you do not have to put your corporation in bankruptcy. A small “no asset” business bankruptcy will cost at least $10,000 and a trustee will require a retainer from you. You do not have to fund this if there is nothing in it for you. You do need to understand what you are personally responsible for and what steps you may need to take to protect yourself. Vine and Williams, Licensed Insolvency Trustees, can help you.
Did you take a CEBA loan for your business? You are personally liable for this if you operate your business as a sole proprietor. Some of the banks included a personal guarantee in their lending documents, so you could be responsible for a CEBA loan that was made to your corporation. We can help you figure it out.
Don’t cash in RRSP’s, sell your home or take any other major steps without learning about all of your options. It is possible to keep these assets and deal with your debts.
Call us at 1-833-808-8463 or Contact Us by email. The conversation is free and the information is invaluable.