Small business people continue to withhold their affection from Canada's banks, according to a Canadian Federation of Independent Business (CFIB) survey that found rising loan rejection rates and no perception of increased competition in the sector.
The study found that the loan rejection rate has increased significantly, to 16 per cent this year from 10.5 per cent in 2000. Predictably, newer and smaller firms are more likely to be denied loans.
The study also found that a smaller proportion of small businesses have even applied for loans — 60 per cent this year, down from 73 per cent in 1987.
“When you combine the loan rejection rates with the fact that more entrepreneurs are shying away from even asking for financing from the major institutions, you get a situation in which overall economic growth is being compromised,” Ms. Swift said.
