People who believe inflation is transitory are discounting consumer psychology: Ian Lee
More than two-thirds of Canadian small business owners feel confident they will make a full recovery in 2022 following a prolonged period of uncertainty amid business restrictions and rising debt levels, according to a new poll.
Despite confidence growing for a full economic recovery over the next year, 52 per cent of respondents to a new Leger poll commissioned by Equifax Canada said they do not feel supported by their bank. As well, 62 per cent of business owners polled felt the same way about their government.
Whether through the government or private lenders, 46 per cent of small business owners polled said they've taken out a loan to weather the impact of the COVID-19 pandemic.
“It’s not just about the money,” said Jeff Brown, head of small and medium business strategy and innovation at Equifax, in a release. “It’s also about helping them to better understand their relationship with credit and how best to pay back these loans.”
“Small business owners are grappling with a lot and banks need to be more than just a conduit for these emergency funds. Banks have an opportunity to counsel small business owners on how to pay down their debt as soon as possible to avoid interest accruals and possible interest rate increases.”
According to September estimates from the Canadian Federation of Independent Business, Canadian entrepreneurs borrowed an average of $169,985 in debt since the beginning of the pandemic.
Struggles and debt burden notwithstanding, 68 per cent of respondents said they feel confident their business will make a full recovery in 2022. That sentiment was most prominent among e-commerce and retail businesses as well as construction.
Respondents acknowledged more hardships are more than likely before a full recovery with the rising cost of goods topping the list of potential headwinds, followed by waning customer demand and staffing.
This survey polled 300 small- and medium-sized businesses operating in the food, construction travel and retail industries online between Aug. 20 and Aug. 29.