CFIB survey finds Canada's small businesses owe $135B due to COVID, urging more forgivable loans
Many small businesses that manage to survive the COVID-19 pandemic will be emerging with a heavy debt burden, according to data released Thursday.
A Canadian Federation of Independent Business survey found that Canada’s small businesses owed a collective $135-billion in debt as of early February due to the pandemic.
Seven in 10 small business owners that responded to the survey said they have taken on additional debt, reaching an average of $170,000 per business.
Renewed restrictions and lockdowns that mandated the closure of non-essential businesses in regions across the country amid the virus’ second wave have pushed many of them to the edge.
“While many businesses had previously reopened and were attempting to regain lost sales, the second wave and the restrictions that came with it are putting a massive wrench in an already slow recovery for small businesses," said CFIB Executive Vice-President Laura Jones in a release Thursday.
Of the firms that incurred more debt, about three-quarters believe it will take them more than a year to repay it, while 11 per cent worry they won’t be able to repay the debt at all.
The federal government has rolled out a number of relief programs aimed at supporting businesses through the pandemic, including the Canada Emergency Rent Subsidy and the more recent Highly Affected Sectors Credit Availability Program. However, CFIB says uptake of some programs remains low among smaller firms.
CFIB’s data was collected via an online survey of more than 3,500 small business owners in Canada conducted from Feb. 4-8.