Small Businesses Struggling to Repay Debt

The Canadian Federation of Independent Business (CFIB) reports small businesses are struggling to repay debt they accumulated during the COVID-19 lockdowns. Adding to the problem are the recent increases in the interest rates tied to outstanding and new debts. Many have not yet repaid the debt they accumulated during the pandemic when a significant number of small businesses faced an unprecedented fall in revenue.

Increasing the burden of debt was yet another interest rate hike from the Bank of Canada on October 26. The central bank raised its key lending rate by a half-percentage point to 3.75 per cent. The bank has incessantly raised the interest rate this year from a low of 0.25 per cent in March. A third of Canadian small business owners now say borrowing costs are causing difficulties, compared with about a fifth of businesses at the start of the year, CFIB reports.

Reflecting problems in the economy, a Leger survey of more than 1,000 Canadians found 76 per cent of those polled plan to rein in holiday spending because of higher food prices, followed closely by worries of other price increases and overall economic concerns.

---

This article was published in

Volume 52 Number 11 - November 2022

Article Link:
https://cpcml.ca/Tmlm2022/Articles/M520116.HTM

Website:  www.cpcml.ca   Email:  editor@cpcml.ca