Relationships are important in banking, and perhaps never more so than when working with small and medium-sized businesses. Banks play an essential role for SMEs across Canada, meeting their diverse financial needs to drive jobs, innovation, development and growth.

What You Need to Know:

  • The majority of bank business customers are small and medium-sized enterprises (SMEs), and banks have financing relationships with more than 1 million SMEs across Canada.
  • As of June 2017, Canada's domestic banks authorized more than $221 billion in credit to SMEs across the country. Authorized lending to SMEs has increased by 21 per cent, or over $38 billion in the last five years.
  • Banks provide SMEs with more than just financing. They also offer a wide range of financial and advisory solutions.
  • Banks participate in the federal government’s Canada Small Business Financing Program (CSBFP).

What are Small and Medium-Sized Businesses?

Canadian Bankers Association Business Credit Statistics define an SME as having authorized borrowing of under $5 million.

Serving the Banking Needs of SMEs

SMEs can turn to banks for a variety of financial and advisory solutions, including – but not limited to – financing. These banking solutions include:

  • business chequing and savings accounts, in both Canadian and foreign dollar denominations
  • tax payment services
  • foreign exchange services
  • succession and investment planning
  • electronic funds transfers
  • online and telephone banking
  • payroll and filing services
  • coaching podcasts, booklets and seminars

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Lending to SMEs

Banks work closely with entrepreneurs to provide a range of long-term financing and short-term, day-to-day lending options:

  • term loans
  • mortgages
  • leasing
  • lines of credit
  • overdraft
  • credit cards

According to Industry Canada’s Survey on Financing and Growth of Small and Medium Enterprises – close to 85 per cent of SMEs in Canada had their debt financing request fully or partially approved in 2014.1

Canada’s Small Business Financing Program (CSBFP)

The banks also participate in the federal government’s Canada Small Business Financing Program. The government shares risk with lenders through this program, which helps stimulate job and wealth creation. Small businesses or start-ups operating for profit in Canada with gross annual revenues of $10 million or less are eligible for CSBFP loans.

Partnering with Export Development Canada (EDC)

Banks work closely with Export Development Canada (EDC) to support those SMEs that directly export their goods and services internationally or participate in global markets. SMEs are able to access EDC’s range of products to grow their businesses.

  1. Industry Canada, Survey on Financing and Growth of Small and Medium Enterprises, 2014 released in 2015.

Questions?

If you have general questions about banking in Canada, call the Canadian Bankers Association’s Banking Information Line at 1‑800‑263‑0231 or send an email to inform@cba.ca.