Relationships are important in banking, and perhaps never more so than when working with small and medium-sized enterprises (SMEs). 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 December 2018, Canada's domestic banks authorized more than $238 billion in credit to SMEs across the country. Authorized lending to SMEs has increased by 21 per cent since the end of 2013.
  • 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

graphic of a bank or building with a dollar sign hanging on the side

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

Loan approval rates are high. According to Statistics Canada’s Survey on Financing and Growth of Small and Medium Enterprises – 89 per cent of SMEs in Canada that applied for a loan from a financial institution were approved.1

Supporting Women Entrepreneurs

Banks have taken initiatives to assist women entrepreneurs to build and grow their businesses - from financing and other banking products and services to capacity building and networking programs. Statistics Canada’s 2017 survey on Financing and Growth of SMEs provides insight on the financing of women entrepreneurs. According to this study:

  • Canada’s domestic banks are the main provider of external finance for 79 per cent for businesses with a majority female ownership.
  • For businesses fully owned by women, 90 per cent were approved for debt financing, and those with majority female ownership the approval rate was 98 per cent.
  • Debt financing is not an obstacle for women entrepreneurs – only seven per cent of female-owned SMEs cited obtaining financing as a major obstacle to external obstacle to growth.

Canadian banks are active supporters of SMEs across Canada and this support and commitment extends to women entrepreneurs. Beyond the business banking services offered to their clients, banks have programs and services internally to support women entrepreneurs as well as offering support to external organizations.

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.

Protecting your Small Business from Cyber Threats

The reality of today’s increasingly digital-first economy means that businesses, both large and small, use the Internet to manage their operations, serve their customers and grow their business. Cyber criminals target small businesses that they believe have not yet implemented proper cyber security safeguards; and this means that small businesses could be exposed to cyber security risks to a greater extent.

Banks in Canada are working around the clock on the prevention and detection of cyber security threats and work closely with each other and with bank regulators, law enforcement and all levels of government to protect the financial system and their customers from cyber crime. There are also simple steps small business owners and managers can take to recognize cyber threats and protect their businesses and employees from cyber crime.

The CBA’s Small Business Cyber Security Toolkit can help small business owners and managers protect against their businesses from the most common cyber threats.

cover page of Cyber Security Small Business toolkit

  1. Stats Canada, Survey on Financing and Growth of Small and Medium Enterprises, 2017, Released 2018.

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.