“Inflation and better rates of interest are starting to weigh on the money circulate of small companies,” stated Jeff Brown, Head of Industrial Options, Equifax Canada.
“Small enterprise house owners are juggling extra now even because the pandemic turns into much less of a priority. Not solely are they coping with inflationary pressures on the price of items, provide chain points and the demand for elevated wages, they’re taking up extra debt and we’re seeing delinquencies and insolvencies rise,” he added.
4 out of ten (40%) small companies stated they took on further debt in the course of the pandemic. An analogous quantity stated they took on debt from the federal government (pandemic loans – 23%) and the banks (21%); a smaller proportion (4%) stated they took on debt from each.
Learn extra: Many hard-hit small companies contemplating calling it quits, says CFIB
Thirty-six per cent of those that took on further debt anticipate paying it off by the top of 2023, however 29% anticipate paying it off a lot later, particularly those that are much less optimistic in regards to the financial system than they have been in This fall 2021.