May 05, 2020

Rebounding: a small business’s experience with crises and the Canadian Emergency Business Account

A speedy process to secure crucial funds eased Luke Shaheen’s concerns over operating costs, freeing him to focus on heightened customer expectations.

In the early weeks of Canada’s response to the COVID-19 pandemic response, Regina’s Luke Shaheen was glued to the news, and it wasn’t just for updates from local health authorities. As Managing Partner of APEX Active Entertainment Group, Luke was sussing out details on impending relief from the Canada Emergency Business Account (CEBA). A few weeks earlier, in March 2020, his two APEX Adventure Plex locations were forced to close. The doors were locked. Staff was laid off. Now he was looking for answers in hopes that his business might qualify for support.

“That was something we were interested in basically as soon as it was announced — I was keeping a monitor running throughout the day and listening to the different federal and provincial programs that were coming out. We have multiple businesses in Saskatchewan and B.C., so we’ve been trying to keep as educated and informed as possible,” he explains.

 

Immediate support

Announced on April 9, 2020, by the Government of Canada, CEBA allows small businesses to apply for financial support through their primary lender, such as credit unions and banks (including Canadian Western Bank). A $25 billion program, it offers eligible small businesses and not-for-profits access to up to $40,000 in interest-free loans. And if repaid by December 31, 2022, 25 per cent of the loan (up to $10,000) will be forgiven.

  • Questions about CEBA? Get your answers in these FAQs.

Like many businesses, APEX continued to incur the fixed costs of physical locations continued, regardless of the recent shuttering. It was these costs that had Luke intrigued by the CEBA program’s promise of a quick injection of cash, which held few restrictions on how it could be used. “I don’t want to take a bunch of money and have to worry about paying my pest control company or my alarm company — thinking ‘which one is eligible to use this money for?’ The CEBA program covers all of that, including those fixed costs that I can’t really defer and need to keep paying,” says Luke.

For a business to be eligible relies on several factors, including the amount of employment income paid in the 2019 calendar year (being between $20,000 and $1,500,000), as well as having an active business chequing or operating account with their primary financial institution that was opened on or prior to March 1, 2020.

After being accepted, businesses can begin to see funds transferred into their accounts in as quickly as a few days. “We were in constant contact with our relationship manager at CWB as soon as we heard about the CEBA program,” says Luke. “He provided us with the information we needed, including how the program would be rolled out, interest rates and the dates, which made things easier for us as we manage businesses in different jurisdictions. I didn’t have to go searching for details on repayment periods, for instance, as he equipped me with all of that information as soon as he had it.”

Luke further noted that once the process started it was a very quick turnaround for receiving support from the CEBA program. “After we submitted our application, it was three to four business days before we started to see those funds come into our account, so we could cover our company’s expenses.”

 

Ups and downs

While bolstering cash flow to cover overhead on one side of their business, Luke and his team were hastily ramping up their ecommerce efforts on the other. Manufacturing consumer recreation products such as high-end trampolines (including the world’s largest backyard trampoline), this side of APEX’s business was seeing exponential growth — instigating a move to one of the world’s largest online retailers. “We’ve already started pushing to sell our products on Amazon without using Amazon fulfilment. We’re using the Amazon platform to sell and then we’re fulfilling it,” Luke outlines. “We’ve actually already enabled selling through our website as well. We’ve been busy shifting as many things online as possible.”

It’s a trade-off, Luke concedes, but one that’s allowed his business to make the most of a market in flux. “Unfortunately, with the trampoline parks, we’re selling a service and that service doesn’t quite go well with this pandemic at the current moment. But our consumer division of product sales is definitely being transitioned to different online platforms,” he notes. And it hasn’t come without its own uncertainty. “As soon as my kids go to bed, I’m back in the office, adding things online — doing any small tweak I can to try to adapt those businesses with the shifting market. You don’t know what’s going to work and what’s not. So it’s really trying as many things as possible and quickly adapting. The impact of this pandemic is going to be a defining market shift for our generation, and this market shift is going to need a very fluid response.”

 

Ready for the future

While APEX is well positioned for an extended period of remote working, having invested in online project management software, VOIP phone systems and Google’s G Suite for the company several years ago, the future behaviour of Canadian consumers in the physical world has Luke intrigued. “On the APEX Trampoline side, we’re preparing for a huge shift — we had previously used the ‘Moments of Truth’ approach, so if someone walks into our building and the first thing they see is a piece of gum on the floor, well they’re automatically going to assume that maybe the trampolines aren’t clean or the kitchen is not clean,” he says. “And we’re expecting that to be amplified when the pandemic subsides. So we’re going to be reviewing that in-depth as part of our re-launch plan because we anticipate for consumers to come back with a whole new outlook on what the expected level of service and cleanliness is in these facilities in the future.”

Continuing to look to ahead, Luke reiterates the importance of maintaining a healthy cash flow, and encourages business owners to consider prudent financing options that can help keep the doors open (if only symbolically). On a more human level, he emphasizes the need for constant communication with team members, and, most importantly, to try to stay positive. “This is a situation where everyone has to take it day by day. I don’t think anyone has had an easy ride in the last few weeks. And the best thing we can do is to stay resilient and keep moving forward. Because we will all get through this together and the only thing you can’t do is give up.”