TORONTO, ONTARIO--(Marketwired - Oct. 24, 2016) - (NYSE:EFX) - Three-in-four small business owners (77 per cent) say they will likely be hiring employees for new positions over the next 12 months, according to a survey conducted by Equifax Canada. Additionally, 43 per cent of those owners surveyed said they want to grow but they have limited access to business financing.
"It's very encouraging that so many Canadian small business owners plan to hire and are eager to grow their business over the next 12 months," said George Staikos, Director of Commercial Markets for Equifax Canada. "This is consistent with our data, which shows the value of outstanding business credit balances increased by 29 per cent since the second quarter of 2015."
"Providing credit, helping manage cash, or offering business credit education are a few of the ways the financial services industry can support small business," advised Staikos.
Gary Fearnall, Country Manager, OnDeck Canada, a leader in online small business lending, suggests offering business financing solutions that cater specifically to their unique needs to provide additional support. "Small businesses typically require smaller amounts of capital, faster, in order to fuel their growth and fund immediate needs, such as hiring."
Challenges for Small Business
Beyond gaining access to business financing, small business owners cited the following challenges impacting their growth:
- 51 per cent said managing cash flow is one of the major challenges of running their business
- 39 per cent said their business operations could be negatively impacted by the housing bubble
"Cash flow is like oxygen for small businesses; they can't grow without it. Too often, one of the biggest challenges for a small business owner is getting paid," noted Staikos. "Late payments for goods and services create enormous stress on small business operations, and, in turn, it makes it difficult for the business owner to make good on their bills. It can become a vicious cycle."
This cycle may lead to higher potential write-offs and collections. Trended data from Equifax shows a 46 per cent increase in overall collection balances since Q1 2014.
Managing Credit and Cash Flow
When asked about their relationship with credit and their financial institutions, respondents indicated there was room for improvement:
- 34 per cent said they don't feel their company is supported by their bank
- 24 per cent have experienced problems making payments to their suppliers, contractors or other financial obligations pertaining to their business
- 28 per cent have considered using their home or other forms of personal collateral to obtain lines of credit and/or loans
"While we understand why some small businesses would feel the need to leverage personal credit to obtain business credit, we believe strongly that separating the two is important," added Fearnall. "When small businesses have access to the financing they need, they're better able to establish boundaries while building a strong credit profile. Becoming a savvier borrower will help small business owners prepare for growth opportunities when they come knocking."
The survey of 300 small- to medium-sized business owners was completed by telephone between September 20 and October 3, 2016. The survey was commissioned by Equifax Canada. A probability sample of the same size would yield a margin of error of +/-5.7%, 19 times out of 20.
Equifax powers the financial future of individuals and organizations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge that helps its customers make informed decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its databases include employee data contributed from more than 5,000 employers.
Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor's (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,200 employees worldwide.
Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune's World's Most Admired Companies (2011-2015); named one of Forbes' World's 100 Most Innovative Companies (2015). For more information, visit www.equifax.com
About OnDeck Canada
OnDeck (NYSE:ONDK) is the leader in online small business lending. Since 2007, the company has powered Main Street's growth through advanced lending technology and a constant dedication to customer service. Since OnDeck entered Canada in 2014, the company has delivered more than CAD$50 million in financing to Canadian small businesses. OnDeck's proprietary credit scoring system - the OnDeck Score® - leverages advanced analytics, enabling OnDeck to make real-time lending decisions and deliver capital to small businesses in as little as 24 hours. OnDeck offers business owners a complete financing solution, including the online lending industry's widest range of term loans and lines of credit. To date, the company has deployed over $5 billion to more than 50,000 customers in 700 different industries across the United States, Canada and Australia. OnDeck has an A+ rating with the Better Business Bureau and operates the educational small business financing website www.businessloans.com. For more information, please visit www.ondeck.com/canada.