Canadian Bankers Association tells committee SMEs have ample credit access and urges capital and guarantee reforms to expand lending

In testimony to a committee studying access to credit and capital markets for small and medium sized enterprises, the Canadian Bankers Association said banks already provide broad access to SME financing and that the main obstacles to business growth are largely outside lending availability. It said banks and other providers deliver more than CAD 355 billion in SME financing across Canada, with banks accounting for about 60 percent, and argued that loan approval rates remain high while SMEs more often cite input costs, tax, hiring and regulation as constraints. The association said banks assess SME borrowers through standard credit due diligence and are increasingly using technology and data to automate the process, which it said has helped raise authorized, outstanding and unused SME credit by about 80 percent since the global financial crisis. To increase lending further, it pointed to recommendations previously submitted to the Competition Bureau, including changes to bank capital adequacy frameworks to enable more capital deployment, adding growth considerations to regulatory decision making, streamlining government guarantee programmes including the Canada Small Business Financing Program, expanding data sharing to include government entities such as the Canada Revenue Agency, and reducing non financing barriers to growth.