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Small businesses added $117 billion of new debt to battle COVID, CFIB says

Last Updated Jul 15, 2020 at 9:19 am PDT

FILE - A sign on a shop window indicates the store is closed in Ottawa, Monday March 23, 2020. THE CANADIAN PRESS/Adrian Wyld
Summary

CFIB estimates small businesses took on $117 billion of new debt so far during the COVID-19 pandemic

On average, small businesses surveyed by CFIB had $135,000 in debt for a total of nearly $285.4 million

CFIB estimates that would result in $117 billion of total COVID-related debt for small business as a whole

TORONTO — It’s estimated the total debt taken on by small businesses so far due to the COVID-19 pandemic is $117 billion, according to the Canadian Federation of Independent Business.

We’re getting a better sense of the financial impacts related to the coronavirus outbreak, with the national association basing its estimates on an online survey of small business owners from June 26 to July 2.

About 2,100 of the survey’s 4,502 respondents agreed to reveal how much debt they’d incurred due to COVID-19.

“Government debt has ballooned and so too has the private debt taken on by small businesses to deal with COVID-19,” said Laura Jones, executive vice-president at CFIB. “I’ve talked to many businesses that are open again, but are worried about being able to outrun the debt they have accumulated, particularly with sales still down. Recovery is going to be a slow slog and both governments’ and customers’ support is critical to make it happen.”

COVID-19-related small business debt. (Courtesy Canadian Federation of Independent Business)

On average, the small businesses that provided information for the CFIB survey had $135,000 in debt for a total of nearly $285.4 million.

The CFIB estimates that would result in $117 billion of total COVID-related debt for small business as a whole, based on Statistics Canada’s count of small and medium-sized enterprises in Canada.

The 110,000-member association also estimates that 58 per cent of small businesses have re-opened fully, 35 per cent are back to full staffing but only 24 per cent are back to normal revenue.

According to the polling industry’s generally accepted standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.