Small business debt load tops $150,000: Recovery will be impeded if more financing is not made available

CFIB calls on government to increase CEBA loan amount and forgivable portion

Ottawa, June 5, 2020 – Small business owners are taking on large debt loads and dipping into personal savings to weather the prolonged business disruption, finds a new survey by the Canadian Federation of Independent Business (CFIB). On average, small businesses have taken on more than $150,000 in debt.

“Cash flow and debt continue to be among the top concerns of small business owners as restrictions and business closures remain in place in many provinces,” said Corinne Pohlmann, CFIB’s senior vice-president of national affairs. “Many are also behind on their bills. This is going to be a major impediment to recovery if businesses can’t access more financing soon.”

According to CFIB’s latest survey results:

  • A third of business owners are behind on major bill payments, like rent and credit cards—the hospitality, arts and recreation and personal services sectors are the hardest hit with four in 10 behind on bills
  • 37 per cent of business owners are using their personal savings to finance their business and 34 per cent are using credit cards – those numbers jump to 44 and 42 per cent respectively for businesses with fewer than 4 employees
  • While the median debt load for small businesses stands at $40,000, the average debt is greater than $150,000, meaning that some businesses are taking an even bigger financial hit 

“Small business owners urgently need more access to financing. While the Canada Emergency Business Account was helpful early on, many businesses continue to struggle and that money will not stretch far enough,” added Pohlmann.

CFIB has urged the government to increase the amount businesses can borrow as an interest-free loan under CEBA, and raise the forgivable portion of the loan from 25 per cent to 50 per cent. Enacting the eligibility changes that were announced a few weeks ago as quickly as possible, so that businesses with no payroll can qualify for the loans, is also imperative. In addition, CFIB will be sending letters to Canada’s major banks, urging them to keep fees reasonable and make financing more accessible to small firms.

“With more provinces and sectors reopening, businesses will need access to financing to purchase and install personal protective equipment, supply new inventory, rehire staff and keep their doors open,” concluded Pohlmann. “This is not just a necessity for small business survival, but an essential step in Canada’s economic recovery.”

For media enquiries or interviews, please contact:
Milena Stanoeva, CFIB

About CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at