Access to working capital essential to the success of Canadian small businesses


The past year has been a difficult time for Canadian small business owners. From restaurants to beauty salons, many small and medium-sized businesses (SMEs) are still in “survival mode” and rely on the support of Canadian consumers. To help us better understand the current environment for business owners and find out how they are responding to the changing global economy and business conditions in 2021, we commissioned the American Express Small Business Recovery Survey, a study conducted among 500 SMEs across Canada.

Unsurprisingly, the study found that amid the COVID-19 pandemic, many small business owners feel they don’t have the capital they need to maintain their businesses. In fact, only 40% think that with their current cash flow, they can maintain their business for more than six months. Additionally, we found that many small business owners have had to make personal sacrifices to make sure their businesses stay on track, with 65% of business owners saying they haven’t looked after themselves since the last day. start of the pandemic.

Only 40% of small business owners believe that with their current cash flow, they can run for more than six months.

Despite these challenges, Canadian SMEs have demonstrated incredible resilience, creativity and resourcefulness during this time as they seek to rebuild their businesses. With many facing the instability and financial constraints imposed by the pandemic, they have acted quickly and strategically to stay afloat. Additionally, many have taken immediate steps to adjust their business models to the changing landscape, reducing operating costs, implementing cost reduction programs, and leveraging technology to modernize their businesses. .

They also continue to find new ways to drive business growth. Reshaping marketing, exploring new customer segments, and diversifying product or service offerings are just a few of the ways that Canadian SMEs will drive business growth in 2021. Many are also looking to improve their digital presence, this too. which remains essential, especially with more and more people spending time and shopping online.

While many small business owners feel encouraged to reinvest in themselves and their businesses this year, they see access to loans as a must to survive the pandemic, grow their business, and innovate. However, accessing these necessary funds is not always easy for small business owners. According to our research, only one in five Canadian SMEs that applied for a loan described the process as hassle-free. Some of the common obstacles included difficulty with the required documents, difficulty understanding the terms and conditions of the loans, and the lack of personal assets to secure the loan.

These days, small business owners are under great pressure to access cash flow quickly so that they can ultimately jumpstart growth. They don’t have time for delays or cumbersome and complicated processes. That’s why we’re starting to see more and more small businesses looking to FinTech companies for the quick financing they need. We’re also seeing strong demand for digital platforms that offer quick and easy lending solutions.

In response to the increase in digital payments and the growing demand for quick and easy access to working capital, we have partnered with FinTech Linear to launch American Express Business Loans, a Canadian first for Amex. Thanks to Linear’s innovative platform, Business Loans harnesses the power of digital to provide Canadian SMEs with the financing they need quickly. In addition to optimizing lending processes with Linear, we at Amex have also worked to increase touchpoints with small business owners, including migrating resources from sales-based activities to management and Customer Support. We have often worked with clients as they turned during the pandemic to areas related to e-commerce and working capital solutions that recognized the dynamics of their business recovery rather than financial statement data. traditional retrospectives.

As small business owners in Canada need our support more than ever, now is the time to extend Amex’s leadership in SME lending globally to provide business solutions that owners can rely on. small businesses can count. According to our research, half of Canadian SMEs intend to access a business loan in 2021. This is not surprising given that they report struggling to maintain constant working capital as one of the biggest challenges.

At Amex, we are inspired by the small businesses we serve and their ability to weather this pandemic with such tenacity and speed. As we look to the future, we, like many Canadian business owners, are optimistic about the future. Knowing the resilience of this group, we are convinced that SMEs will do everything in their power to keep their businesses open and we are ready to support them and provide them with the capital they need so that they are better positioned. for their future success.

Image courtesy of Unsplash.

About Donnie R. Losey

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