Access to small business loans remains difficult, largely due to burdensome paperwork
Canadian small business owners may not be getting the help they need - or that is entitled to them - as the recently revised Canada Small Business Financing Program seems to be underperforming, according to a recent report.
The study from KPMG and commissioned by Industry Canada found that the financing program - which aims to help support Canadian small business loans by reimbursing financial institutions for defaults - is seeing lackluster implementation by lenders, causing the number of small business loans to suffer, the Canadian Press reported.
The program has guaranteed $10 billion in small business loans since 1999, but 2009 saw a steep decline in loans - a new low of 9,000 that represents half the number of loans seen in 1999.
The report cited burdensome paperwork and red tape as major obstacles to the program's success, as well as lack of profit and difficulties collecting claims.
The program was revised in 2009 to raise the maximum loan amount from $100,000 to $350,000 and to adjust a claims calculation limit, the Canadian Press reported, but the changes seem to have had little impact.
Studies have shown that access to credit is typically cited as one of the primary concerns of Canadian small business owners, a difficulty that has not been helped by the recent recession and credit crunch.
