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The Canada Emergency Business Account (CEBA) is an initiative of the Government of Canada.  The official Government website is

CEBA Loan Experience in the Restaurant Industry

CEBA loan experience in the restaurant industry
Reading Time: 7 minutes

The COVID-19 pandemic sent shockwaves through industries worldwide. From nationwide lockdowns to virtual learning and closed borders, the global pandemic changed the world we used to know

The restaurant sector is no exception. As one of the hardest-hit industries during the pandemic, restaurants were also one of the most likely to take advantage of government initiatives like the Canada Emergency Business Account (CEBA) loan. The CEBA program was launched in 2020 by the Canadian federal government, and the experience has offered valuable insights into crisis management for restaurants worldwide. 

The CEBA loan program was introduced as a lifeline for businesses struggling to stay afloat during the pandemic. It provides interest-free loans to small businesses and not-for-profits, in amounts ranging from $40,000 to $60,000 However,  as with any lifeline, it comes with = challenges and lessons to learn.

Lesson One: Embrace Agility

First and foremost, CEBA loans (and how quickly they were enacted, approved, and rolled out) underscored the importance of agility in crisis management. When the pandemic hit, restaurants were among its first economic victims. When customers were no longer able to attend in person, businesses had to quickly pivot, switching to takeout and delivery services, reconfiguring dining rooms for social distance, and in some cases, completely overhauling the model of their business. The ability to adapt to changing circumstances – a trait further emphasized by the CEBA loan process and the global economy as it changed over time – proved crucial for survival.

Lesson Two: Understand the Fine Print

Understanding the terms of financial aid—especially in an emergency situation—is vital. Some restaurant owners may have rushed to secure funding and keep the business afloat, without fully comprehending the loan’s terms and repayment requirements. Now, as the repayment deadline looms, these same businesses face the threat of bankruptcy, or at the very least, a lengthy repayment of their loan. This underscores the need for a thorough understanding and careful financial planning of your business’ financial future, even in the event of a crisis.

Lesson Three: Advocacy Matters

As the deadline for CEBA loan repayment approaches, industry associations like CFIB and Restaurants Canada have been advocating for an extension. This demonstrates the power of collective action and the importance of being part of industry groups that can lobby on the business’ behalf. Advocacy can play a critical role in influencing policy decisions that impact the industry—and for businesses, this kind of advocacy means making your voice heard

Lesson Four: Diversification is Key

The CEBA loan experience also highlighted the importance of diversification. Restaurants that relied heavily on dine-in services were hit hardest by lockdown measures, while those with multiple revenue streams, such as takeout, delivery, or retail offerings, were better able to weather the storm. Diversification can provide a buffer during crises, reducing reliance on a single income source and increasing resilience in harsh economic times.

Lesson Five: Communication is Crucial

Transparent, timely communication with stakeholders – including employees, customers, suppliers, and lenders – is another key learning from COVID. When the terms of the CEBA loan were updated, businesses needed to communicate with banks and adjust their repayment plans accordingly. Clear communication can help manage expectations, build trust, and foster strong relationships, all of which are invaluable during a crisis.

Lesson Six: Prepare for the Worst

CEBA loans, as well as the broader pandemic experience, have taught us the importance of preparing for a worst-case scenario. Although many restaurants were caught off guard by the pandemic and face the ensuing financial challenges, many others in the future will avoid the same fate. Having a contingency plan in place, including a strategy for repaying loans or having emergency funds on hand, can help businesses navigate through unexpected crises.

As we move forward, these lessons from the pandemic can help guide the restaurant industry’s approach to crisis management. Embracing agility, understanding the fine print, engaging in advocacy, diversifying revenue, maintaining clear communication, and preparing for worst-case scenarios are not only vital for navigating the current economic landscape but also crucial for preparing for future ones.

While the CEBA loan program has presented challenges, it has also offered valuable learnings. Applying these insights can help restaurant owners, operating on slim margins, to begin with, turn the tide. Ultimately, the industry is becoming more creative, more resilient, and taking steps to not just survive a crisis, but emerge stronger in the future.

As the saying goes, “smooth seas do not make skillful sailors.” The pandemic’s choppy waters have provided lessons in crisis management applicable to the entire restaurant industry. The pandemic has demonstrated the importance of agility, understanding financial aid, advocacy, diversification, clear communication, and preparedness for worst-case scenarios.

With the CEBA repayment deadline fast approaching, associations like Restaurants Canada have proposed solutions to the federal government to save small businesses, specifically restaurants, who are struggling with pandemic-related debt. The proposal includes a 36-month payback extension with a scale-down model on the forgivable portion of the loan. 

The pandemic ushered in a period of unprecedented uncertainty for Canada’s food service sector, along with major financial challenges. In response, the federal government launched the CEBA program, providing small businesses and not-for-profits with interest-free loans of up to $60,000 to keep their doors open and soften the financial blow.

Restaurants Canada’s recommendations to the federal government include providing additional leniency to CEBA recipients by extending the loan for 36 months and implementing a scaled-down model on the forgivable portion of the loan with a five percent decrease every six months to encourage timely repayment. The proposed changes would offer more potential for governments to see the CEBA loans reimbursed, and encourage businesses, especially restaurants, to pay back their CEBA loans as soon as possible. Without pushing businesses to repay loans faster than they can afford, they can choose to benefit from a larger forgivable portion of the loan, without becoming so debt-burdened that they can’t survive. The CEBA program was a crucial tool for the thousands of businesses that surrendered to the unexpected crash of the pandemic. Without the CEBA program, supply chain changes, demand drops, and rising inflation mean Canada’s loss of over 13,000 food service establishments would have been exponentially larger. However, as the country emerges from the pandemic, restaurant operators across the country are still struggling to keep their businesses afloat. This struggle has led to calls for the federal government to adopt a phased loan repayment approach for the CEBA loan and required businesses to look into alternate options.

A significant number of table-service and quick-service restaurant companies received a loan through CEBA and the majority of restaurant operators needed these loans to keep staff employed and pay for utilities, goods from suppliers, and rent. As the repayment deadline approaches, a survey by Restaurants Canada revealed that nearly 20 percent of the restaurants that have yet to reimburse CEBA will not be able to repay it in part or at all. This finding is unsurprising given that 43 percent of the food service sector continues to operate at a loss or just break even—and one in four independent table-service restaurants are not expected to recover from their pandemic debt unless current conditions change.

The inability of some restaurateurs to repay CEBA loans reflects the state of the industry as a whole. The sector emerged from the pandemic as one of the hardest hit financially, with many owners being forced to take on significant debt just to keep open their doors. The industry is also struggling with post-pandemic operational challenges like inflation, labour shortages, and supply chain hurdles, all of which are significantly impacting the profitability of these operations.

Despite these challenges, Restaurants Canada and other sector-specific organizations look forward to ongoing collaboration with the federal government to ensure the food service sector remains an active part of the nation’s economy. The CEBA loan experience has provided valuable lessons in crisis management for the restaurant industry. Through applying these insights, restaurant owners can navigate the rough waters of the pandemic—not just survive but emerge stronger and more resilient. Smooth seas may not make skillful sailors, but the restaurant industry’s navigation through this crisis has been choppier than most. The pressures of the past few years will undoubtedly create more skillful, resilient restaurateurs ready to catch any future waves that come their way.

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