More than half of small businesses don’t feel supported by their government and banks

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As COVID-19 restrictions slowly lift across most provinces and small business owners are able to open their doors again, a recent Equifax Canada survey found that the majority of them do not feel supported by their banks and government.

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In a nationwide panel of 300 small business owners, 52 per cent of respondents said they were not getting the proper supports from their banks. Sixty-two per cent said that they felt this way about their government.

Over the course of the pandemic, at least 46 per cent of small to medium-sized business owners secured either a private or government loan, the latter coming from the Canada Emergency Business Account (CEBA). Despite feeling unsupported, over half of those surveyed (56 per cent) said they will have enough government credit to make it through to the end of the year. As well, 77 per cent believe they will have enough credit from suppliers to get by.

“For a small business owner who has struggled during the pandemic, it’s not just about the money. It’s also about helping them to better understand their relationship with credit and how best to pay back these loans,” said Jeff Brown, the leader of small and medium business for Equifax Canada, in a release. “Small business owners are grappling with a lot and banks need to be more than just a conduit for these emergency funds…”

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“Some small business owners may be expecting or hoping for some level of debt forgiveness, and greater attention would need to be paid by policy makers and financial institutions alike to ensure that getting through the pandemic remains a priority,” Brown added.

Small and medium-sized businesses have been forced to take on a crushing amount of debt to keep their businesses afloat during the pandemic and to account for unexpected pandemic-related costs such as plexiglass, hand sanitizer and masks. The average business owner now owes roughly $170,000 in COVID-related debt, according to report by the Canadian Federation of Independent Business (CFIB) in August.

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The small business advocacy group now estimates that small businesses across Canada collectively owe $139 billion because of the pandemic, which climbed from $135 billion in February.

Business owners told Equifax that their biggest concerns going forward are the costs of their own goods and products (47 per cent), customer demand (42 per cent), supplier product availability (39 per cent) and staffing (33 per cent).

Costs and debt burdens aside, most surveyed business owners (68 per cent) remain confident that they will be able to get back on their feet in 2022. Those who have been in business for three to five years are more confident than those who have been in operation for more than six years.

Business owners showed their resiliency through a few pandemic pivots, with four in 10 entrepreneurs growing their businesses online along with two-thirds that have set up curbside pick-up. Almost half of the business owners who took on debt expect to have it paid back by the end of 2022.

“In offering support to a small business owner, we must recognize that each one is unique and at a different point in their journey as an entrepreneur,” said Brown. “It’s true that some have struggled, but others have thrived and adapted successfully to the changes forced onto them by the pandemic.”

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