Canadian Manufacturing

Small business debt load tops $150,000

by CM Staff   

Financing Human Resources Small Business

CFIB calls on government to increase CEBA loan amount and forgivable portion

OTTAWA – Small business owners are taking on large debt loads and dipping into personal savings to weather the prolonged business disruption, finds a new survey by the Canadian Federation of Independent Business (CFIB). On average, small businesses have taken on more than $150,000 in debt.

“Cash flow and debt continue to be among the top concerns of small business owners as restrictions and business closures remain in place in many provinces,” said Corinne Pohlmann, CFIB’s senior vice-president of national affairs, in a prepared statement. “Many are also behind on their bills. This is going to be a major impediment to recovery if businesses can’t access more financing soon.”

According to CFIB’s latest survey results:

  • A third of business owners are behind on major bill payments, like rent and credit cards—the hospitality, arts and recreation and personal services sectors are the hardest hit with four in 10 behind on bills
  • 37% of business owners are using personal savings to finance their business and 34% are using credit cards – those numbers jump to 44 and 42% respectively for businesses with fewer than 4 employees
  • The average debt is greater than $150,000, meaning that some businesses are taking an even bigger financial hit

“Small business owners urgently need more access to financing. While the Canada Emergency Business Account was helpful early on, many businesses continue to struggle and that money will not stretch far enough,” added Pohlmann.


CFIB has urged the government to increase the amount businesses can borrow as an interest-free loan under CEBA, and raise the forgivable portion of the loan from 25% to 50%. Enacting the eligibility changes that were announced a few weeks ago as quickly as possible, so that businesses with no payroll can qualify for the loans, is also imperative.

“With more provinces and sectors reopening, businesses will need access to financing to purchase and install personal protective equipment, supply new inventory, rehire staff and keep their doors open,” concluded Pohlmann. “This is not just a necessity for small business survival, but an essential step in Canada’s economic recovery.”


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