The new credit would be at a higher interest rate than Ottawa’s, but on a lower principal amount, which the lenders argue will save the businesses money
“The one thing that people will, I think, question is obviously taking a loan to pay a loan,” said Michael Wood, director of corporate partnerships at Ottawa-based alternative lender Canadian Financial. “But this is taking a loan to receive the forgiveness.”
Dan Kelly, president of the Canadian Federation of Independent Business, said refinancing could make sense for businesses that can negotiate favourable terms. But he said he is concerned that some business owners could be taken advantage of. Liz Blazanovic, Meridian’s vice-president of business banking, said the program allows their small-business clients to conserve their funds. “They now don’t have to choose between benefiting from the CEBA program’s loan forgiveness offer or not being able to meet their cash obligations,” she said in an e-mail.