Toronto, Canada — The beauty industry, already grappling with the profound effects of COVID closures, inflation, and workforce shortages, is now confronted with an additional hurdle — the impending deadline for repaying the $40,000 Canadian Emergency Business Account (CEBA) loans on January 18th, 2024. This critical juncture is exacerbating the financial woes of beauty professionals who are struggling to recover from the unprecedented challenges of the past two years.
The scenario has left beauty professionals under significant financial stress, with many losing sleep over looming repayments. Desperate to avoid a substantial penalty of $20,000 coupled with a 5% interest charge, professionals are resorting to taking out high-interest loans and maxing out credit cards. The failure to meet the CEBA repayment deadline threatens to push numerous beauty professionals to the brink of bankruptcy.
According to recent statistics, over 900,000 Canadian small businesses, including many in the beauty sector, were compelled to take on CEBA loans just to weather the storm of two years of lockdowns and business restrictions. These CEBA loans are just one component of the average $110,000 in COVID-related debt that two-thirds of Canada’s small business owners are burdened with.
In a unified effort to make their voices heard, the Allied Beauty Association of Canada (ABA Canada), representing beauty professionals, is joining forces and initiating a petition. Individual letters are being sent to Minister Freeland, highlighting the urgency of the situation, and copies of these letters are being dispatched to local Members of Parliament.
“We cannot overstate the urgency of the situation facing beauty professionals across the country. The impending CEBA repayment deadline is pushing many to the brink, and the repercussions could be devastating for an industry that has already faced unprecedented challenges. We implore the federal government to recognize the gravity of the situation and take decisive action to support the recovery of small businesses in the beauty sector,” said Vince Riverso, ABA Canada Chairperson.
Salon owners are struggling. “We are still recovering from the 8 months of forced closure during COVID. We lost staff, clients and thousands of dollars in revenue. Most salons haven’t recovered enough to pay back the loan and are facing a loan repayment with interest! This is the difference between staying open and/or keeping a staff member or not. I’m afraid many of us won’t make it!” Adds Heather Wenman, CEO of Studio H Artist Group based in London ON.
ABA Canada has taken on a number of initiatives to support their members including Beauty Beats, a music initiative to raise money. But this won’t be enough.
Their plea is clear: add your voice to this critical cause. Join the thousands of business owners across the nation in urging the federal government to prioritize small business recovery and provide a lifeline to those who are struggling to stay afloat. To learn more about the petition, the ABA encourages you to visit ABACanada.com/Petition.