Business Development Bank moves to aid Canadian SMBs in wake of problematic unemployment
August 28, 2013
Canada is currently in the midst of certain social and economic difficulties. Unemployment in the nation can currently be measured as lying between 13 and 7 percent. The wide range accounts for whether the amount of people who have stopped looking for work is included in the jobless rate. As of July 2013, Statistics Canada officially measured it at 7.2 percent. The problematic nature of this issue means that it may be a topic of conversation among many Canadians, on calls made with prepaid phone cards.
Many believe that providing resources to small- and medium-sized businesses and entrepreneurs could help deal with this problem, as companies that are better able to operate above water may be more likely to hire. As such, the Business Development Bank of Canada has spent the past fiscal year funneling $4.3 billion in financing to Canadian firms, most of which have been SMBs, according to The Canadian Press.
Distributing capital based on investment situation
The news source reported that in the recent past, interest rates in Canada have been low and the loonie has been relatively high. This has made for an enviable climate in which to invest, and BDC Financing - a subsidiary of the Business Development Bank - was able to assist its SMB clients in a significant way. In the 2013 fiscal year, BDC Financing alone gave out $4.1 billion to 9,195 companies - a notable increase from fiscal 2012, when it distributed $3.6 billion to 7,000 of its business patrons.
Jean-Rene Halde, the bank's CEO, summed this success up in a recent statement.
"The overall strength of the investment climate in Canada has permitted our clients to do well financially, and ultimately this is reflected in our performance," Halde said, according to the source.
The financing provided is intended for general working capital, and also to be spent on specific needs such as IT, communications tools and equipment. Additionally, these loans allowed SMBs to expand the whole scope of their operations.
Resources for entrepreneurs?
In an editorial for The Globe and Mail, Vincent Gasparro, managing director of the Green Tomorrow Fund, a sustainability-focused merchant bank, stated that the Canadian government could offer major benefits to the economy - including the potential for increased hiring - by focusing on policy changes that benefit entrepreneurs and SMBs.
Gasparro listed access to capital, research and development support and reductions to corporate taxes as measures that could be implemented to bring about these results. He cited the government's recent establishment of a $400 million venture capital fund and $100 million grant to the BDC as steps in the right direction.