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TORONTO, Sept. 29, 2021 (GLOBE NEWSWIRE) – As most financial institutions and governments rush to tout their commitment to small business, a recent Equifax Canada survey conducted ahead of Small Business Month indicates that despite pandemic support programs, more than half feel they are not being backed by their banks or government. In a national panel of 300 small business owners, 52 percent said this about their banks and 62 percent thought that way about government.
Many small and medium-sized businesses have struggled through the pandemic. To survive, they took out loans and accessed emergency benefit programs like the Canada Emergency Account for Businesses (CEBA). Almost half of survey respondents (46%) say they have obtained a private or government loan. Interestingly, 56% of respondents feel they have enough government credit to meet their needs in the fourth quarter of 2021, and 77% agree they have enough credit from their suppliers to get by, especially those whose businesses have been in operation for three years. or more.
“For a small business owner who has struggled during the pandemic, it’s not just about money. It’s also about helping them better understand their relationship to credit and how best to repay those loans, ”said Jeff Brown, Head of Small and Medium Business, Equifax Canada. “Small business owners are grappling with a lot of problems and banks need to be more than just a conduit for these emergency funds. Banks have the ability to advise small business owners on how to pay off their debt as soon as possible to avoid accrued interest and possible interest rate increases, ”Brown noted.
Brown continued, “Some small business owners can expect or hope for some level of debt forgiveness, and more attention should be paid by policymakers and financial institutions to ensure that weathering the pandemic. remains a priority. ”
Confidence, challenges and concerns
Despite their debt load, 68% of small business owners surveyed are confident their business will recover in 2022, and those in online retail and whose businesses have been operating for 3 to 5 years feel very confident. Those in the retail / e-commerce and online construction sectors are the most optimistic about a return to pre-COVID normalcy in the last quarter of 2021. Companies that have been operating for more than 6 years are many more likely to report that they are less confident than businesses that have been operating for a shorter period of time (27 percent vs. 12 percent of those
Small business owners who participated in the survey said the cost of goods was their top concern, with almost half (47%) being concerned, followed by customer demand (42%), availability of products from suppliers (39%); and staffing (33 percent). Those who are not Confident in their ability to recover in 2022 are much more likely to be concerned about their ability to repay their loans (26% vs. 18% of those who are confident).
“In providing support to a small business owner, we need to recognize that everyone is unique and at a different stage in their journey as an entrepreneur,” Brown added. “It is true that some have struggled, but others have thrived and successfully adapted to the changes the pandemic has forced upon them. For many of them operating in industries such as online retail, travel, and food and beverage, they will be among the first to say their industry has changed permanently due to the pandemic. “
Survey results show that small business owners are resilient and will continue to pivot as needed during the pandemic:
- Four in ten (39%) have created or developed their business strategy online, with around two-thirds (63%) of these people offering curbside pickup and half (50%) offering door-to-door delivery.
- Those with businesses with revenues over $ 100,000 last year were much more likely to report that they had incurred additional debt / credit during the pandemic.
- Almost half of those who have taken on additional debt / credit plan to pay it off by the end of 2022.
According to Brown, historically many small businesses have had limited access to trade credit. Less than a quarter of the smallest businesses applied for credit in 2018 to fuel growth, in part reflecting access to trade credit products. The share of small businesses applying for credit tends to lag behind. For some, lower approval rates will push them to have personal credit. Their credit needs tend to be much lower and focused on working capital.
Equifax Canada is committed to providing information to financial institutions and all levels of government to help small business owners get through these tough times. A priority remains to help small business owners better understand their relationship to credit, which survey shows many entrepreneurs need:
- Six in ten small business owners (59%) know that a business can get their own business credit report, only 30% know how / where to get one, and 29% don’t know how / where to get it. a.
- Of the 59 percent who know the business credit report, only 40 percent know their business credit rating, while just over half (55 percent) admit they don’t. do not know.
* Equifax Canada commissioned Leger to conduct an online survey of 300 owners / managers / decision makers of small (255) and medium (45) Canadian businesses in the food, construction, retail sectors and travel. It was carried out between August 20 and 29, 2021, using Léger’s online panel.
About EquifaxAt Equifax (NYSE: EFX), we believe knowledge is the engine of progress. As a global data, analytics and technology company, we play a vital role in the global economy by helping financial institutions, businesses, employees and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technologies drive insights to make decisions to get people moving. Based in Atlanta and supported by more than 11,000 employees worldwide, Equifax operates or has investments in 25 countries in North America, Central and South America, Europe and the Asia-Pacific region. For more information, visit Equifax.ca and follow company news on LinkedIn and Twitter.
Source: Equifax Canada