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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, lenders disbursed 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 for medium-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 year‑over-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 type 2011 2012 2013 2014
H2 H1 H2 H1 H2 H1
Source: Statistics Canada, Biannual Survey of Suppliers of Business Financing, 2014.
Domestic banks 30.0 30.6 32.0 34.1 36.6 37.5
Other banks 13.2 16.6 16.0 15.1 17.2 18.3
Credit unions, Caisses populaires 7.4 8.0 8.9 8.9 9.4 8.6
Finance companies 8.1 9.4 9.2 9.6 8.5 9.4
Insurance companies and portfolio managers 6.0 5.9 5.2 5.3 6.4 5.6
All suppliers 64.6 70.4 71.3 73.0 78.1 79.5

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)
Credit H1 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014
Outstanding 491.8 514.5 538.7 555.4 583.0 602.2 625.4
Disbursed 61.5 64.6 70.4 71.3 73.0 78.1 79.5

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 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014
Small businesses
Credit outstanding 88.0 90.1 86.5 87.8 90.1 92.2 94.6
Credit disbursed 9.9 10.2 10.7 11.0 11.3 11.5 11.4
Medium-sized businesses
Credit outstanding 105.7 110.8 108.5 109.6 115.6 120.3 124.6
Credit disbursed 12.6 13.1 13.7 13.6 13.6 14.9 14.5
Large businesses
Credit outstanding 298.1 313.5 343.6 360.0 377.3 389.7 406.2
Credit disbursed 38.9 41.3 46.0 46.7 48.1 51.7 53.5

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 2011 H2 2011 H1 2012 H2 2012 H1 2013 H2 2013 H1 2014
Primary and agriculture
Credit outstanding 78.0 85.8 90.0 93.3 97.0 101.9 107.2
Credit disbursed 10.3 12.3 14.6 13.3 13.7 14.4 15.5
Construction
Credit outstanding 39.5 40.5 42.8 45.8 47.5 47.0 50.6
Credit disbursed 6.6 6.3 7.1 7.3 7.2 8.4 8.6
Transportation
Credit outstanding 20.6 20.9 21.8 22.6 25.2 26.2 25.7
Credit disbursed 2.7 3.1 3.1 2.9 3.9 3.7 3.5
Manufacturing
Credit outstanding 46.1 39.9 42.7 44.4 46.4 46.2 49.3
Credit disbursed 5.5 5.9 5.6 6.0 6.3 6.4 7.4
Wholesale and retail trade
Credit outstanding 54.6 56.1 62.1 63.8 70.9 70.6 77.3
Credit disbursed 5.2 5.6 7.1 7.7 7.9 9.1 8.1
Finance, insurance, real estate and rental
Credit outstanding 132.4 144.2 145.6 149.6 151.7 158.2 161.3
Credit disbursed 15.7 15.9 16.0 16.8 17.0 17.6 17.8
Professional, scientific and technical services
Credit outstanding 14.3 16.8 17.3 19.5 20.6 21.3 22.0
Credit disbursed 1.9 2.2 3.2 2.8 2.6 2.6 3.1
Accommodation and food services
Credit outstanding 14.2 15.1 15.4 15.8 15.9 16.2 16.9
Credit disbursed 2.5 1.6 1.8 2.0 1.9 2.2 2.5
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