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Small businesses are following through on a post-pandemic link

During the pandemic, the federal government poured billions of dollars into small businesses in the form of grants, subsidies and loans. The Canadian Emergency Business Account (CEBA) provided more than $49 billion in loans to more than 900,000 enterprises.

“In the early stages of the pandemic, small business owners used government funds wisely, paying or paying overused accounts, or past due and delinquent accounts,” Brown said. “This translated into strong credit ratings allowing many small business owners to gradually increase their debt over the past year.”

With the lift provided by the government relief fund, Brown said small business owners saw a 20.7% increase in their debt burden over the past 12 months — the equivalent of an average $35,000 increase. While this isn’t necessarily a negative because businesses must spend money to make money, he said small business owners should continue to make financial decisions prudently.

According to data from Equifax Canada, 30+ day delays decreased 10.8% year over year in Q4 2021, indicating that small business owners are paying their loans on time. Brown said there were fewer overall, far below pre-pandemic levels.

However, he added that some regions such as Ontario, the Prairie and Atlantic Canada are showing signs of financial stress through modest quarter-on-quarter growth.

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