“Inflation and higher interest rates are beginning to weigh on the cash flow of small businesses,” said Jeff Brown, Head of Commercial Solutions, Equifax Canada.
“Small business owners are juggling more now even as the pandemic becomes less of a concern. Not only are they dealing with inflationary pressures on the cost of goods, supply chain issues and the demand for increased wages, they are taking on more debt and we’re seeing delinquencies and insolvencies rise,” he added.
Four out of ten (40%) small businesses said they took on additional debt during the pandemic. A similar number said they took on debt from the government (pandemic loans – 23%) and the banks (21%); a smaller percentage (4%) said they took on debt from both.
Read more: Many hard-hit small businesses considering calling it quits, says CFIB
Thirty-six per cent of those who took on additional debt anticipate paying it off by the end of 2023, but 29% anticipate paying it off much later, especially those who are less optimistic about the economy than they were in Q4 2021.
