Relationships are important in banking, especially 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 are Small and Medium-Sized Businesses?
Canadian Bankers Association Business Credit Statistics define an SME as having authorized borrowing of under $5 million.
Pandemic Recovery Support
SMEs are the lifeblood of the Canadian economy. Most business customers served by banks in Canada are small and medium sized, and banks understand the challenges the pandemic has placed on their SME customers.
Banks have worked closely with
the federal government to help ensure customers have the support they need to navigate the crisis, including lending support, loan deferrals and advice. Banks will continue to stand by their SME customers to help ensure Canadian small businesses emerge from the pandemic resilient, strong and growing.
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:
- providing advice and support throughout the pandemic and into the recovery to help small business clients’ manage their immediate cash management or new lending needs
- 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
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
- lines of credit
- credit cards
Loan approval rates are high. According to Statistics Canada’s Survey on Financing and Growth of Small and Medium Enterprises – 91 per cent of SMEs in Canada that applied for a loan from a financial institution were approved.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 can access EDC’s range of products to grow their businesses.
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. Innovation, Science and Economic Development Canada’s 2019 Credit Conditions survey provides insight on the financing of women entrepreneurs. According to this study, for businesses majority‑owned by women, 89 per cent were approved for debt financing.2
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.
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.
- Stats Canada, Survey on Financing and
Growth of Small and Medium Enterprises,
2020 (Data tables), Released 2022
- Innovation, Science and Economic Development Canada (ISED) 2021 Credit Conditions Survey,