Merchant Advance Blog

Blog Article: Good News in New RBC Small Business Report

Owners of small businesses, and their estimated eight million employees across the country, will welcome the news shared by one of Canada’s largest banks this month. In a report titled “Current Analysis: Q+A on the State of SMEs in Canada”  (click the link to view the full report), the Royal Bank of Canada has taken a close look at small- and medium-sized business performance during the post-2007 recession, and the findings give important credibility to the  value of small business growth in Canada. The RBC small business report also highlights some of the most important issues and points of interest deemed relevant to business owners today – not the least of which is access to affordable funding.

Effects of the recession in Canada have undoubtedly taken a heavy toll on owners of both small and medium-sized businesses, but as RBC reports, small businesses in particular have shown remarkable ability to stay strong in the face of a difficult macro-economic climate. The number of small firms operating in Canada between 2007 and 2012 steadily increased and in fact reached an all-time high, while medium sized businesses (those with between 100 and 500 employees) experienced a sharp decline (largely due to challenges faced by more mature, established businesses in the manufacturing sector.)

Perhaps more interestingly, the RBC report makes note of some important demographic information that highlights some of the particular growth factors unique to Canadian small businesses. The report finds that in areas with high rates of small enterprise success, there is a correlated high concentration of female-owned small businesses – suggesting that Canada’s increasing numbers of women entrepreneurs are finding success in their endeavours, especially in the retail, food services and accommodations sectors. It also shows that a growing foreign-born population in Canada is driving the growth of young businesses, especially in larger cities such as Toronto (where 40 percent of small and medium business owners were born abroad.)

The challenges faced by Canadian small businesses were also surveyed, and concerns about cash flow and the rising cost of running a business were reported by business owners across the country. Business owners need to be conscious of their cash flow in order to plan for growth and expansion, and the discussion about how to manage this key part of any business strategy turns quickly to the subject of funding availability. RBC’s report indicates that at least 17 percent of firms describe access to financing as an impediment to growth – though small business’ insulation against the recession’s effects has helped their owners retain better access to credit when compared to that of larger firms.

Merchant Advance Capital was born out of the understanding that these challenges need to be addressed in order to give small businesses the opportunity to grow and develop. We would be happy to discuss a financing plan that allows your business to achieve its unique goals without impediment. Simply visit our website or give us a call.

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