ARCHIVED—Canada Small Business Financing Act: Capital Leasing Pilot Project Summative Review Report

Appendix B: Research in Support of Summative Review

Survey of Lessees

Phoenix Strategic Perspectives Inc. Canada Small Business Financing Program: Capital Leasing Pilot Project Evaluation Survey. August 2006.

A survey of SMEs that had obtained financing under the CLPP was conducted. The survey focused on the issues of awareness, incrementality and economic impact. The survey found that overall awareness of the CLPP was very limited, even given that these SMEs were users of the pilot project. Only 18 percent claimed to be aware of the CSBFA before being contacted for this research, while slightly fewer (16 percent) said they were previously aware of the CLPP.

At the time they received the CLPP lease, 49 percent of respondents said that this was the only option available to their business. This could be viewed as full financial incrementality, i.e., surveyed firms would not have had any financing options without the CLPP. In addition, 21 percent of respondents said that other sources of financing were available, but this either did not cover the full amount needed or would have been available under less favourable terms (partial financial incrementality).

Many surveyed firms experienced positive outcomes as a direct result of obtaining the CLPP lease; 75 percent of firms were able to increase productivity (this likely means increased production, not increased productivity per se), 57 percent said the lease allowed them to broaden the geographic scope of their business, 49 percent identified the development of new products and processes, and 48 percent claimed it resulted in a decrease in costs.

Interviews with Lessors

Intrepid Partners. Industry Canada Capital Leasing Pilot Project Lessor Survey. September 2006.

Leasing companies (lessors) that had contact with the CLPP were interviewed to identify what they perceived as the pilot project's positive and negative features as well as to determine if the pilot project was achieving its stated goal of providing an alternative funding source for SMEs. Interviews were conducted with six active lessors under the CLPP, two leasing companies that had been approved but never registered any capital leases under the CLPP, and two leasing companies that could not be designated as lessors as they did not meet the criteria of the Lessor Designation Policy.

The survey found that the CLPP is providing SMEs access to financing that they would otherwise not have received. Lessors noted that these leases are incremental to their business and many have built programs around the CLPP. Survey respondents who use the CLPP were generally positive about it and indicated that it was easy to administer. Criticism of the operational aspects was limited and lessors spoke highly of the support provided by Industry Canada staff as well as information provided on the CLPP website. The general consensus was that the CLPP is not well understood within the industry, resulting in low take-up and a modest number of approved lessors.