SMES are highly leveraged during the pandemic

Les PME se sont fortement endettées pendant la pandémie

OTTAWA – Three owners in four SMES have had to borrow to get through the health crisis, indicates a survey of members of the canadian Federation of independent business (CFIB).

In Quebec, the total debt would amount to 21.3 billion $ and at the canadian level, the bill would reach 117 billion $. This is the equivalent of the debt average for SMES of $ 127,000 in the Belle Province and $ 135,000 in the country.

The consultation, conducted online from 26 June to 2 July, also indicates that 68% of respondents believe that it will take them more than 12 months to erase this debt.

“The public debt has exploded and it is also the case of private debt,” said Wednesday, Jasmin Guénette, vice-president of national affairs for the CFIB.

“SMES are heavily indebted because of the pandemic, he added. Many business owners who have reopened their doors to say not to be safe to be able to repay the debts that they have accumulated so far to keep the head out of the water. The recovery will not be overnight. Governments and consumers have a vital role to play for sure.”

Quebec is the second largest of the provinces where the owners of SMES have contracted debts the most important during the pandemic. Ontario is the top paid, with an aggregate amount of debt of 49.9 billion $.

The business people who hold the SMES have had to face the crisis in pigeant in their economies (37 % of respondents), by inflating their credit cards (34 %), obtaining bank loans (18 %), using their retirement savings (11 %), by contracting a new mortgage (9 %) or by borrowing money from a friend or a member of their family (9 %).

“These data remind us at what point the risk of the private debt firms turn into personal debt is real, said the CFIB. In addition to affecting consumption, in particular, such a phenomenon will be a further obstacle to the recovery of the economy.”

Campaign #JeChoisisPME

To revive the economy and support the business people behind the SMES in canada, the CFIB has launched the campaign #JeChoisisPME, so that consumers opt unequivocally for products and services offered by local businesses.

“The support of the consumer gives back the smile to the lips of business owners, abused financially and emotionally by the crisis”, stressed Gopinath Jeyabalaratnam, senior policy analyst with the CFIB.

“Collectively and individually, we can do more. This summer, we will rise to the challenge #JechoisisPME to put our companies favorite on the track to success. Remember: the more SMES will go well, the more the economic recovery will go quickly”, he said.

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