Small business COVID-19 debt totals $117B: CFIB
#SmallBusinessEveryDay customer support critical to recovery
TORONTO — Three quarters of small businesses have taken on debt as a result of COVID-19 and a majority of those with debt (68%) estimate it will take more than a year to pay off, according to new survey results featured on the Canadian Federation of Independent Business (CFIB)’s Small Business Recovery Dashboard.
Other key indicators include the number of businesses that are fully open (58%), the number that are back to full staffing (35%), and the number that are back to normal revenues (24%).
“Government debt has ballooned and so too has the private debt taken on by small businesses to deal with COVID-19,” said Laura Jones, executive vice-president at CFIB, in a prepared statement. “I’ve talked to many businesses that are open again, but are worried about being able to outrun the debt they have accumulated, particularly with sales still down. Recovery is going to be a slow slog and both governments’ and customers’ support is critical to make it happen.”
The small businesses that have incurred debt because of the pandemic report they have taken on $135,000 on average. Based on survey results and after adjustments to reflect the entire economy, CFIB estimates that the total debt taken on so far by Canadian small businesses as a result of COVID-19 is $117 billion.
To finance COVID-19 revenue shortfalls and extra costs businesses are relying on personal savings (37%), credit cards (34%), bank loans (18%), retirement savings (11%), mortgages (9%) and loans from families and friends (9%).
The total COVID-19-related debt estimate for Canadian SMEs is based on results from CFIB survey results and Statistics Canada business counts.