Royal Bank of Canada has approved more than $2 billion in emergency loans to small businesses since last week, but some business owners say the system set up by the bank has left them unable to apply for the government’s Canada Emergency Business Account loans even though they meet the qualifications.
“I am desperately in need of the CEBA but … they are not making it available,” said Michael Pancer, president of Pancers Original Deli, a restaurant that banks with RBC.
Pancer said his north Toronto deli, whose roots date back to 1957, meets all the criteria — including having a payroll of $50,000 and documentation from the Canada Revenue Agency — but when he logged in to his online business account, he was not given access to the application.
“We have tried for the last week to apply” he told the Post, including spending close to two hours on hold on the phone before someone at RBC told him they would be sending an email so he can apply. Pancer said the email had not arrived by mid-day Wednesday.
Pancer said he is still paying staff despite a sharp decline in revenue as his business, along with many others, is severely limited in the service it can offer amid efforts to slow the spread of the novel coronavirus.
“My sales are down 60 per cent,” he said, adding that he is disappointed he has been unable to access funds to support his “all-Canadian small business.”
I am desperately in need of the CEBA but … they are not making it available
Nearly 80 per cent of small businesses in Canada are fully or partially closed due to the COVID-19 pandemic and efforts to contain it, with little or no revenue coming in as their bills continue to pile up, according to the Canadian Federation of Independent Business.
Pancer is not alone in his frustration in trying to access the emergency loans of up to $40,000 through RBC, Canada’s biggest bank.
Jane Gillanders, who has a dental practice in Toronto, and Mary R. Di Salvo, who has a financial advisory business in London, Ont., described similar stumbling blocks when applying to the bank for the emergency loan, which is interest free for the first year, with a quarter of the total forgivable if the rest is repaid by the end of 2022.
“The issue is that the enrolment button only appeared in certain business accounts,” said Gillanders. “It was not available except by ‘invitation’ essentially.”
The dentist said she has a six-figure payroll, and was told by her banker and her accountant that she is “fully qualified” and complies with the application criteria for a CEBA loan.
“I am sincerely disappointed in RBC,” Gillanders said, adding that she had spent “hours” since the program opened last Thursday trying to get answers from the bank and Export Development Canada, the Crown corporation involved in the CEBA loan program.
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I am sincerely disappointed in RBC
She said her efforts had “not been fruitful” as of mid-day Wednesday, leaving her with a gap in funding to keep operating until another government-backed program kicks in to subsidize employee wages.
“How am I expected to ‘rehire’ my office staff to take advantage of the CEWS (Canada Emergency Wage Subsidy)?” Gillanders asked.
Di Salvo, who like Gillanders identified herself as a longtime RBC business client, told the Post she reached out to the bank and her local Member of Parliament to complain about the process and to try to get access to the emergency loan under the CEBA program.
“I qualify as I meet every requirement as set out by the Government of Canada,” she wrote, according to the correspondence viewed by the Post.
“So either RBC updates my online banking to allow my right to apply for the CEBA or I am moving my business to another financial institution when this is over,” Di Salvo wrote.
In an emailed statement, RBC spokesman AJ Goodman said the bank vetted its client base before the emergency loan program opened last week and identified about 700,000 clients expected to meet the government’s eligibility requirements. Those clients were provided the online banking banner messages permitting them to apply immediately.
Goodman directed those who believe they qualify for the $25-billion government program and don’t see that banner to contact the bank’s call centre and its relationship managers. He said the bank is seeking further clarity from government on its eligibility requirements, which has resulted in an additional 25,000 clients being directed to the online self-serve channel.
So far “more than 48,000 clients have been able to quickly and seamlessly apply and have their request for funding approved,” Goodman wrote. As of 3 p.m. Wednesday, the bank had logged 51,137 approved applications for the full $40,000, for total emergency loans of just over $2 billion.