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Biannual Survey of Suppliers of Business Financing—Data analysis, first half 2014

January 2015

This document presents data on business lending activities gathered from the Biannual Survey of Suppliers of Business Financing.

Overall conditions

Survey results highlight a continued increase in business lending activity in the first half of 2014. In total, lendersdisbursed approximately $79 billion in new loansFootnote 1 to Canadian businesses between January and June (H1 2014), compared with approximately $78 billion in new loans disbursed between July and December 2013 (H2 2013) (Figure 1). This translates into an increase in new loan activity of 1.8-percent and reflects three-and-a-half years of straight increases. Survey results are consistent with an overall loosening in business lending conditions as reported in the Bank of Canada's Senior Loan Officer Survey.Footnote 2

Business size conditions

While Figure 1 showed that lending increased for businesses overall, the increase was concentrated entirely among large businesses (those with loan authorization levels of $5 million or more). Specifically, lenders disbursed approximately $54 billion in new loans to large businesses in the first half of 2014, which represented a 3.6-percent increase in disbursals compared with the second half of 2013. Lending activity actually decreased for small businesses (those with loan authorization levels less than $1 million) with loan disbursals falling by 1.0-percent and formedium-sized businesses (those with loan authorization levels between $1 million and $4.9 million) with loan disbursals falling by 2.2-percent (Figure 2). This is the first drop in loan disbursals to SMEs since H1 2011.

Lending activity

Domestic banks, which account for 47.1-percent of Canada's new loans market, continued to lend aggressively in the first half of 2014, increasing loan disbursals to businesses by 2.2-percent (Table 1). This followed a 7.3-percent increase in disbursals in the second half of 2013. Credit unions and Caisses populaires decreased loans by 3.1-percent yearover-year and by 7.8-percent in the first half of 2014 compared with the second half of 2013. Loan disbursals by other banks, including foreign banks, continued to increase, with disbursals rising by 6.5-percent in H1 2014 and by 21.6-percent year-over-year. Credit disbursed from finance companies rebounded in the first half of 2014, rising 10.4-percent, compared to an 11.3-percent drop in disbursals in H2 2013.

Table 1: Value of credit disbursed ($ billions) by supplier type
Supplier type2011201220132014
H2H1H2H1H2H1
Source: Statistics Canada, Biannual Survey of Suppliers of Business Financing, 2014.
Domestic banks30.030.632.034.136.637.5
Other banks13.216.616.015.117.218.3
Credit unions, Caisses populaires7.48.08.98.99.48.6
Finance companies8.19.49.29.68.59.4
Insurance companies and portfolio managers6.05.95.25.36.45.6
All suppliers64.670.471.373.078.179.5

Industry conditions

Survey findings point to an increase in lending activity across most sectors in the first half of 2014 compared to the second half of 2013. Sectors experiencing the strongest increases were the professional, scientific and technical services and the manufacturing sectors, which saw increases in loan disbursals of 19.5-percent and 15.3-percent respectively (Figure 3). Firms in the accommodation and food services sector also experienced a notable increase in lending activity, with loan disbursals rising by 14.5-percent. Conversely, a decline in lending activity was observed in the wholesale and retail trade sector and transportation sectors. Specifically, new loans disbursed to wholesale and retail trade and transportation businesses fell by 10.5-percent and 6.2-percent respectively. Given the large proportion of SMEs that are concentrated in the retail trade sector, the decrease in lending activity within that sector could explain the drop in SME lending.

About the Survey

The Biannual Survey of Suppliers of Business Financing is the result of a commitment by the Government of Canada to improve the availability of information about financing of businesses in Canada. Data are collected from 120 major suppliers of financing, including domestic banks and credit unions and Caisses populaires, representing over 90 percent of all lending to businesses in Canada.

This report was prepared by Daniel Seens, CFA, an economist in the Small Business Branch.

Figure 1: Value of credit outstanding ($ billions) and disbursed ($ billions)

Figure 1: Value of credit outstanding ($ billions) and disbursed ($ billions)
Source: Statistics Canada, Biannual Survey of Suppliers of Business Financing, 2014.
Description of Figure 1
Figure 1: Value of credit outstanding ($ billions) and disbursed ($ billions)
CreditH1 2011H2 2011H1 2012H2 2012H1 2013H2 2013H1 2014
Outstanding491.8514.5538.7555.4583.0602.2625.4
Disbursed61.564.670.471.373.078.179.5

Figure 2: Value of credit outstanding ($ billions) and disbursed ($ billions) by size of business

Figure 2: Value of credit outstanding ($ billions) and disbursed ($ billions) by size of business
Source: Statistics Canada, Biannual Survey of Suppliers of Business Financing, 2014.
Description of Figure 2
Figure 2: Value of credit outstanding ($ billions) and disbursed ($ billions) by size of business
H1 2011H2 2011H1 2012H2 2012H1 2013H2 2013H1 2014
Small businesses
Credit outstanding88.090.186.587.890.192.294.6
Credit disbursed9.910.210.711.011.311.511.4
Medium-sized businesses
Credit outstanding105.7110.8108.5109.6115.6120.3124.6
Credit disbursed12.613.113.713.613.614.914.5
Large businesses
Credit outstanding298.1313.5343.6360.0377.3389.7406.2
Credit disbursed38.941.346.046.748.151.753.5

Figure 3: Value of credit outstanding ($ billions) and disbursed ($ billions) by industry

Figure 3: Value of credit outstanding ($ billions) and disbursed ($ billions) by industry
Source: Statistics Canada, Biannual Survey of Suppliers of Business Financing, 2014.
Note: Numbers do not add up due to exclusion of the "other industries" category.
Description of Figure 3
Figure 3: Value of credit outstanding ($ billions) and disbursed ($ billions) by industry
H1 2011H2 2011H1 2012H2 2012H1 2013H2 2013H1 2014
Primary and agriculture
Credit outstanding78.085.890.093.397.0101.9107.2
Credit disbursed10.312.314.613.313.714.415.5
Construction
Credit outstanding39.540.542.845.847.547.050.6
Credit disbursed6.66.37.17.37.28.48.6
Transportation
Credit outstanding20.620.921.822.625.226.225.7
Credit disbursed2.73.13.12.93.93.73.5
Manufacturing
Credit outstanding46.139.942.744.446.446.249.3
Credit disbursed5.55.95.66.06.36.47.4
Wholesale and retail trade
Credit outstanding54.656.162.163.870.970.677.3
Credit disbursed5.25.67.17.77.99.18.1
Finance, insurance, real estate and rental
Credit outstanding132.4144.2145.6149.6151.7158.2161.3
Credit disbursed15.715.916.016.817.017.617.8
Professional, scientific and technical services
Credit outstanding14.316.817.319.520.621.322.0
Credit disbursed1.92.23.22.82.62.63.1
Accommodation and food services
Credit outstanding14.215.115.415.815.916.216.9
Credit disbursed2.51.61.82.01.92.22.5