Commercial lending slowed to its lowest levels since early 2006, according to a recent report from PayNet.
The data released in the firm's Canadian Business Lending Index, obtained by Reuters, fell by 2 percent in the second quarter, to its lowest levels in nearly five years. The data, which dealt in large part with commercial financing to Canada's small businesses, showed that manufactures of construction, farm or medical equipment were having more trouble than ever securing loans against their products.
"What we're seeing is the focus for businesses is on repairing their balance sheets, rather than robust expansion at this time," William Phelan, PayNet's president and founder, said in an interview with Reuters. "These trends are further reinforcement that recovery is occurring but we're not into a robust economic growth cycle yet."
Political leaders from all over Canada have taken financial institutions to task for failing to help small businesses. The Montreal Gazette reports that National Democratic Party leader Jack Layton called on credit card companies to stop forcing people to pay high rates for borrowing.
