Canada Small Business Financing Program (CSBFP) Awareness and Satisfaction Study

Prepared for Industry Canada
by Phoenix Strategic Perspectives Inc.
July 2007

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Table of Content

• Executive Summary
• Introduction
• Corporate Characteristics
• Financial Dealings
• Awareness and Use of CSBFP
• Satisfaction with Financing
• Satisfaction with CSBFP Program Parameters
• Subgroup Variations
  • Tables of Subgroup Variations
• Regression Analysis
• Appendices

Executive Summary

Industry Canada commissioned Phoenix SPI to conduct a survey among small and medium-sized enterprises to better understand the experience of businesses when they try to obtain financing, as well as the extent to which they are aware of and satisfied with the features of the Canada Small Business Financing Program (CSBFP). Two distinct survey populations were included in this research:

1. CSBFP Borrowers: This sample consisted of client SMEs that had obtained a CSBFP loan within the previous year. A total of 502 interviews were completed with this group.
2. General SME Sample: This sample consisted of representatives of SMEs with characteristics similar to CSBFP borrowers, whether or not they recently obtained financing. A total of 503 interviews were completed with this group^{Footnote 1}.

Interviewing took place by telephone June 8-28, 2007. Based on samples of this size, the overall findings for each population group can be considered to be accurate to within +/- 4.4 percent, 19 times out of 20.

Financial Dealings

Large and almost identical majorities of borrowers and representatives of SMEs (71-72 percent) indicated that their business uses only one financial institution for their banking and other financial arrangements. Among financial institutions used by borrowers, the Royal Bank of Canada led the way (24 percent), followed by the Bank of Nova Scotia and Toronto Dominion-Canada Trust (20 percent each). Co-operatives including Caisses populaires and Credit unions were also identified relatively frequently (15 percent each) (multiple responses accepted). The Royal Bank also led the way among financial institutions used by SMEs (19 percent), followed closely by Toronto Dominion-Canada Trust (17 percent). A cluster of other institutions was also identified relatively frequently (11-15 percent) including Credit unions, the Bank of Nova Scotia, the Canadian Imperial Bank of Commerce, Caisses populaires, and the Bank of Montreal.

Term loans were, by far, the financing option used most often by CSBFP borrowers (71 percent) during the previous five years. Identified less frequently, but still by substantial numbers, were lines of credit (40 percent), followed at a distance by credit cards (27 percent). Lines of credit are the most commonly used financing option among SMEs (42 percent), followed by term loans (28 percent) and credit cards (24 percent). A substantial proportion (26 percent) indicated that their firm used no external financing during the previous five years.

CSBFP borrowers and SME representatives differed noticeably concerning applications for a term loan from a financial institution during the previous 12 months. Two-thirds of borrowers said their business applied for a term loan during this period compared to only 16 percent of representatives of SMEs. The fact that one-third of borrowers said that their firm did not apply for a loan is noteworthy in light of the fact that all of them would have received a CSBFP loan during the past year. However, this is relatively consistent with previous research. Compared to 2001, the number of borrowers who acknowledge having applied for a loan has decreased (66 percent vs. 82 percent in 2001). However, it is important to note that in 2001 borrowers were asked if their firm had ever applied for a loan as opposed to a loan over the previous 12 months (the way it was asked this year).

Among respondents who acknowledged loan applications from a financial institution, CSBFP borrowers were much more likely to indicate receipt of a loan for the full amount requested (82 percent vs. 59 percent of representatives of SMEs). Representatives of SMEs were much more likely to indicate that they were turned down for a loan (28 percent vs. 5 percent). Among this same group of borrowers, the vast majority indicated that the loan in question met most or all of their financing needs. The largest proportion of CSBFP borrowers (43 percent) said the loan met all their financing needs, one in five said it met between 76-99 percent of their needs, and 28 percent said it met between half and three-quarters of their needs. Relatively few (8 percent) said the loan met less than half their needs. Results among SME representatives were similar.

Awareness and Use of CSBFP

Total awareness of the CSBFP among borrowers is 25 percent. In other words, one-quarter of executives of businesses that received a loan under this program acknowledge awareness of the program by name. Moreover, awareness is much more likely to be aided than unaided. In all, only 4 percent of borrowers identified the CSBFP by name in an unprompted manner. In addition, 51 percent claimed to be aware of federal government loans programs in general. That is, they knew that there was one or more federal programs that share the risk with financial institutions, even if they knew nothing else about such programs. Finally, 24 percent percent were not even aware that there were any such programs.

Awareness was much lower among representatives of SMEs. Only one in five (19 percent) claimed awareness of the program by name, almost all of whom were able to do so on an aided basis only. In addition, 20 percent claimed to be aware of federal government loans programs in general (i.e. knew there was a federal program that shares the risk with financial institutions, even if they knew nothing else about it). The clear majority, 61 percent, were not aware that there were any such programs.

Among borrowers who claimed to be aware of the CSBFP, over one-third (40 percent) said they knew nothing about it. The most frequently identified aspect of the program was that it is designed to help small business get financing (27 percent), followed by the perception that losses are shared by government (17 percent) and that fewer guarantees are required to secure the loan (14 percent). A majority of SMEs who claimed to be aware of the CSBFP (58 percent) said they knew nothing about the program. As was the case among borrowers, the aspect of the program identified most often was that it is designed to help small business get financing (22 percent). All other responses were provided by very small numbers (6 percent or less).

CSBFP borrowers were most likely to have learned about the CSBFP through a bank officer (41 percent), followed at a distance by a friend or colleague (22 percent). Representatives of SMEs were most likely to have learned about it through a friend or colleague (26 percent) or a brochure/pamphlet (25 percent). In contrast to borrowers, relatively few SME representatives (9 percent) learned about the program through a bank officer.

A majority of borrowers aware of the CSBFP (52 percent) indicated that when seeking financing the lender identified the program to them for consideration. Just under one-quarter (22 percent) said they themselves asked about the CSBFP, while 17 percent said they neither asked about it nor was it brought to their attention. Among representatives of SMEs, three-quarters (74 percent) said they neither asked about it nor was it brought to their attention, while most of those remaining (15 percent) said the lender identified the program to them for consideration.

Satisfaction with Financing

A majority of borrowers (55 percent) and a near majority of SME representatives (45 percent) whose firms received loans during the previous 12 months expressed overall satisfaction with the financing options available to them, although satisfaction was more likely to be moderate than strong. Borrowers who did not express satisfaction were more likely to be neutral (28 percent) than dissatisfied (16 percent), while SME representatives who did not express satisfaction were just as likely to be neutral or negative (24-26 percent).

CSBFP borrowers that acknowledged receiving a CSBFP loan in the previous 12 months were most likely to be satisfied with the financing they received relative to their request (75 percent). Almost two-thirds (61-64 percent) were satisfied with other aspects of the application process and the approval time. More than half also expressed satisfaction with the securities and guarantees needed, the availability of program information and the administrative requirements (55-58 percent). Satisfaction was lowest concerning fees associated with the CSBFP loan, including both the registration fees (37 percent) and the annual administration fee (31 percent).

The large majority of borrowers (90 percent) and representatives of SMES (84 percent) whose firms received loans during the past 12 months indicated that their business would be at least moderately likely to use the same lender for financing in the future.

Perceptions of CSBFP Parameters

Focusing specifically on a number of CSBFP features, there was widespread agreement among both borrowers and SME representatives (79-83 percent) that the maximum amount of financing of 90 percent is about right. Two-thirds in each population (66-68 percent) also agreed that the maximum loan size of $250 000 is about right. In both groups, most of those who did not agree with this felt that the amount is too low. As well, over half the borrowers and representatives of SMEs (59-62 percent) felt that the cap on the interest rate at prime plus 3 percent is too high (nearly all the rest, 34-39 percent, think this is about right). Finally, over half the borrowers and representatives of SMEs (52-56 percent) felt that the 2 percent registration fee is too high; virtually all the rest (42 percent in each population) felt it is about right.

Asked about the reasonableness of certain features of the CSBFP, strong and nearly identical majorities in both populations (80-83 percent) regarded the restriction to term loans and the financing restrictions as at least somewhat reasonable. By contrast, borrowers were much more likely to regard the loss-sharing arrangements as at least somewhat reasonable (82 percent vs. 66 percent of representatives of SMEs). Representatives of SMEs were almost twice as likely to regard this feature as lacking reasonableness (32 percent vs. 17 percent of borrowers). Most of the borrowers who acknowledged receiving a CSBFP loan in the previous 12 months said that they were satisfied with the program's rules and procedures.

While majorities of both borrowers and representatives of SMEs regard the CSBFP as potentially useful to them if they were having difficulty obtaining financing, borrowers were much more likely to think this: 80 percent of borrowers rated the program as useful (57 percent said very useful), compared to 62 percent of SME representatives.

Conclusions and Implications

Consistent with the 2001 survey, and as one might expect, the results for CSBFP borrowers and the general SME sample were very different in terms of awareness of the CSBFP. While 25 percent of CSBFP borrowers were aware of the program by name (prompted and unprompted awareness), only 19 percent of the SME group claimed the same level of awareness. The gap is considerably larger when one looks at total awareness of the program – whether by name or not – where 76 percent of borrowers claim to be aware of the program, but only 39 percent of general SMEs.

Differences in awareness notwithstanding, it is noteworthy that only three-quarters of the CSBFP clients recalled the program in general, and only 25 percent by name – despite the fact that all of these companies received a loan under the program during the previous 12 months. Such lack of awareness is underscored by the fact that 72 percent of CSBFP borrowers that acknowledged having received a term loan in the preceding year said they were aware that it was covered by a federal program that provides a guarantee on loans to small businesses (a proportion almost identical to what it was in 2001). Moreover, only two-thirds of CSBFP borrowers even acknowledged having applied for a term loan in the preceding 12 months (down from 82 percent in 2001, although the time period in the earlier survey was ever, while that in the current survey was in the last 112 months).

Taken together, the results suggest low awareness of CSBFP among the SME population in general, but also, to a lesser extent, among CSBFP borrowers – where awareness could be expected to be relatively high. While somewhat surprising, this pattern is largely consistent with the 2001 survey results.

In terms of actual knowledge about the program, relatively few respondents aware of the program, in either group, identified program specifics (e.g. maximum financing amount, registration fees), instead offering general statements about it, such as “it is a government program to help small businesses”. In terms of sources of information about the program, borrowers tended to hear about it from bank personnel (41 percent), while SMEs pointed most often to friends/colleagues or brochures. Of CSBFP borrowers aware of the program by name, only half (52 percent) said the lender identified the program for them for their consideration when discussing financing options.

The results suggest that financial institutions are not identifying the CSBFP to potential borrowers with any consistency, including even to those who obtain loans covered by the program. Beyond the lenders themselves, there are no communications channels or tools that have had a significant impact in terms of increasing awareness of the program.

Turning to the CSBFP loans themselves, of those borrowers who acknowledged having applied for one, the vast majority (82 percent) said they received a loan for the full amount requested, while an additional 10 percent received part of what they were looking for. These results are almost identical to the 2001 findings. Only a minority of borrowers (43 percent), however, said the loan met 100 percent of their financing needs, although over 90 percent said it met half of their needs or more. In short, it appears that while the CSBFP-covered loan did not meet the full financial needs of all clients, it did address most of the needs for almost all firms that obtained a loan.

When the focus is on the financing options used in the last five years, a variety of tools or instruments were used by both groups. However, only a limited number were used with any frequency. For CSBFP borrowers, the use of term loans headed the list, as would be expected. And while lines of credit were also frequently used (40 percent), their use is only about half of that reported in 2001. Credit cards were the only other method used with some frequency (27 percent, unchanged since 2001). All other methods were much less widely used compared to 2001, including capital leasing for equipment, operational leases and venture capital. The situation is similar with the general SME population, although lines of credit were the financing tool used most by this group. All financing methods were used by smaller proportions of SMEs compared to 2001. It appears that a narrower range of financing options is being used by businesses at this point in time compared to 2001.

Executives exhibited moderate levels of satisfaction with the financing options available to small businesses (asked of those whose firm had used one or more of the financing options). While a majority of borrowers and near-majority of SMEs expressed satisfaction overall, many others were dissatisfied (16 percent and 24 percent respectively) or simply neutral or undecided (28 percent and 26 percent). When the focus was on specific aspects of financing, satisfaction varied widely for both groups – highest for amount received vs. amount requested, application processing time, and lender service quality, and lowest for service fees and variety of options available (with CSBFP borrowers adding in interest rates, and SMEs adding in guarantees needed). As well, dissatisfaction for specific financing issues was often over 25 percent. Conclusion: decidedly mixed levels of satisfaction with the financing options available to the small business community.

Interestingly, one of the top-rated items – lender service quality – and one of the lowest-rated items – variety of options available – were two of the three most powerful drivers of overall satisfaction with the financing options available. Despite the mixed levels of satisfaction with their financing experience, most executives in both groups said their business would likely use the same lender(s) for other sources of financing in future.

Turning specifically to the CSBFP loan that borrowers received during the previous 12 months, satisfaction was also quite varied – highest for the financing received relative to their request, other aspects of the application process, and the approval time – and lowest for the fees associated with the loan, including both the registration fees and the annual administration fee. Dissatisfaction with these fees was quite high (27-31 percent). Despite this mixed satisfaction, two-thirds of CSBFP borrowers said they were satisfied, overall, with the rules and procedures of the program.

Despite mixed perceptions and satisfaction levels about the financing options available in general, and the rules/procedures of CSBFP loans in particular, businesses appear to be largely content with the lenders and/or program used. That is, areas of dissatisfaction do not appear to be sufficient to translate into changed behaviour.

When attributes and rules of the CSBF program were identified to borrowers and SMEs, most features were seen to be reasonable by most executives. This extended to some of the amounts that were explored, seen to be 'about right', with the exception of the interest rate and registration fee – majorities in both groups viewed these as too high. As a summary measure, 80 percent of borrowers and 62 percent of SMEs rated the program as at least moderately useful to them if they were having difficulty obtaining financing for their business in future. As a whole, therefore, surveyed executives – especially CSBFP clients – view the program as a useful tool in the financing toolkit available for small businesses.

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Footnotes

1. ^{1 back to footnote reference 1} While the SME survey population was designed to match the CSBFP borrowers sample on key characteristics, the area where the samples are least similar is with respect to the age of the firm. Please see the table in the introduction that compares the two samples according to key characteristics.

Introduction

Industry Canada commissioned Phoenix Strategic Perspectives to conduct a survey among small and medium-sized enterprises to better understand the experience of businesses when they try to obtain financing, as well as they extent to which they are aware of and satisfied with the features of the Canada Small Business Financing Program (CSBFP).

Background

The Canada Small Business Financing Program (CSBFP) facilitates asset-based debt financing for higher-risk SMEs (primarily start-up firms) that would not normally receive financing. This is done through public-private partnership between over 1 300 lending institutions and the government. Since its launch in 1961, the program has helped approximately 500 000 Canadian businesses start up, expand, modernize or improve their businesses.

The program has two central objectives: it is to be incremental (i.e. the program should finance loans that would not otherwise be available), and it is to meet cost-recovery over time (i.e. program revenues from fees should offset the net cost of claims for defaulted loans).

A comprehensive review was completed in 2005 for the period 1999-2004. The review showed that over that five-year period, the program had been successful in facilitating access to almost $5.4 billion in lending through about 66 000 loans to small businesses.

Industry Canada, through the Canada Small Business Financing Program Directorate, is responsible for administering this loan-loss-sharing program. Under the program, financial service providers can make loans of up to $250 000 and are responsible for credit decisions and administering the loans. The Government of Canada pays lenders 85 percent of any eligible loss incurred on loans that default, after the lender has taken the usual steps to recover any associated security to reduce the amount outstanding.

Through the Small Business Policy Branch, Industry Canada is responsible for evaluating the CSBFP, on a five-year cycle, using a result-based management and accountability framework (RMAF). One of the issues addressed under this framework is awareness. In accordance with the Canada Small Business Financing Act, a comprehensive review of the provisions and operation of the Act must be tabled in Parliament within 12 months after March 31, 2009 (i.e. by March 31, 2010). A measurement of the levels of awareness of the program and satisfaction with its parameters will be an essential element of this comprehensive review.

To continue to have a meaningful impact on the Canadian economy, it is crucial for the program to be available to the SMEs that would benefit from it. To this end, it is important that they be aware that this tool exists. The challenge lies in the fact that Industry Canada relies greatly on a third party – the lenders – to inform SMEs of the program and its terms and conditions. An assessment of awareness of the program among SMEs and CSBFP borrowers can help Industry Canada determine the extent to which the lenders are doing so. Furthermore, this research could be used to inform a communication action plan.

Consequently, the objectives of this research were to determine the following:

• The level of awareness of the CSBFP among both CSBFP users and the general SME population;
  
  
• The level of satisfaction among both groups with their financing, and the relative priority they attach to factors contributing to their obtaining financing; and
  
  
• Which factors might have the greatest impact (leverage) on improving that satisfaction (in either the program or SME financing more broadly).

Research Activities

To address the research objectives, a telephone survey was undertaken with executives of SMEs. Two distinct survey samples were used for this research:

1. CSBFP Borrowers: This sample consisted of client SMEs that had obtained a CSBFP loan within the previous year. An appropriate list was provided by Industry Canada in electronic form. The list contained the business name, phone number, and administrative data useful for the study (e.g. age of firm, date of loan).
   
   
2. General SME Sample: This sample consisted of representatives of SMEs with characteristics similar to CSBFP borrowers, whether or not they recently obtained financing. This list was obtained from a list broker that specializes in business lists. Quotas were established based on sector, stage of firm, and region so as to mirror, to the extent possible, the sample of CSBFP borrowers. As well, the SME sample excluded the following: non-profit organizations, farms, holdings, and public administrations and services.

In terms of matching the two samples to enhance the comparability of the two groups, priority was given to the following characteristics:

• Business size: Since only firms with revenues of less than $5 million are eligible for CSBFP loans, this cut-off was used for the SME sample as well.
  
  
• Industry sector: Since four sectors have secured a large proportion of the total value of CSBFP loans, efforts were made to match the general SME sample with CSBFP borrowers in this regard. The top four sectors are: food and beverage services (23 percent), retail trade (15 percent), transportation and warehousing (10 percent), and manufacturing (9 percent).
  
  
• Provincial distribution

The study over-sampled early stage/start-up firms to better explore whether or not early stage firms (assumed to be more likely to seek financing) exhibit greater awareness of the CSBFP than other more established businesses. Early stage/start-up firms were defined as businesses 1-3 years of age.

The following table compares the full population of CSBFP clients, the surveyed CSBFP clients, and the surveyed representatives of SMEs by firm size, age, revenue, sector, and province.

Characteristics of CSBF Borrowers vs. Non-CSBF SMEs

	Full CSBFP Sample	CSBFP Borrowers Surveyed	SMEs Surveyed
Number of employees
One	8.4%	14.1%	12.9%
2-4	55.6%	35.9%	35.4%
5-20	32.0%	42.4%	44.9%
21-50	3.5%	5.8%	5.0%
Over 50	0.4%	1.6%	1.6%
DK/NR	0.2%	0.2%	0.2%
Years in operation
3 years of less	67.7%	61.8%	19.9%
4 years or more	32.3%	38.2%	80.1%
2006 Total Revenues
Under $100 000	8.5%	24.3%	20.9%
$100 000-$300 000	33.2%	25.9%	29.6%
$300 001 - $500 000	19.4%	17.5%	15.3%
$500 001 - $1 million	21.8%	18.3%	17.1%
$1 million - $5 million	17.1%	13.9%	17.1%
Industry/Sector
Food Services & Drinking Places	21.4%	21.5%	18.7%
Other Services	20.6%	9.4%	14.9%
Retail Trade	15.2%	15.1%	13.1%
Transportation and Warehousing	13.4%	10.2%	11.1%
Manufacturing	6.3%	6.0%	6.6%
Construction	5.5%	5.8%	6.0%
Agriculture/ Fishing/ Hunting/Forestry	3.5%	5.0%	3.2%
Health Care & Social Assistance	2.4%	3.2%	3.2%
Professional, Scientific and Technical Services	2.2%	5.0%	4.6%
Art, Entertainment, Recreation	2.0%	3.0%	2.8%
Mining/Oil/Gas	2.0%	6.6%	2.4%
Wholesale Trade	1.4%	0.8%	2.0%
Accommodation Services	0.9%	1.4%	1.2%
Real Estate and Rental/Leasing	0.9%	1.6%	0.8%
Educational Services	0.8%	0.6%	1.4%
Administrative and Support, Waste Management, Remediation Services	0.7%	1.6%	0.2%
Information and Cultural Industries	0.3%	0.4%	2.4%
Finance & Insurance	0.2%	2.4%	4.0%
Utilities	0.2%	0.6%	1.6%
Province
British Columbia	7.2%	8.2%	8.5%
Alberta	11.3%	14.3%	12.9%
Saskatchewan	4.4%	5.4%	4.2%
Manitoba	3.7%	5.8%	4.2%
Ontario	31.5%	33.9%	37.6%
Quebec	34.1%	22.1%	22.1%
Territories	0.1%	0.2%	0.2%
Atlantic Canada	7.8%	9.6%	10.4%

A total of 1 005 interviews were completed with executives of SMEs – 502 interviews with CSBFP borrowers and 503 with non-CSBFP clients between June 8 and 28, 2007. Based on samples of this size, the overall findings for each population group can be considered to be accurate to within +/- 4.4 percent, 19 times out of 20.

The following specifications also applied to this study:

• The survey targeted business owners, but included the CEO, president, or another high-ranking employee if that person was best able to talk about the financial needs of the business.
• The questionnaire incorporated questions used in previous surveys undertaken in support of the CSBFP.
• The same questionnaire was used for both CSBFP borrowers and the general SME sample, and telephone calls averaged 14 minutes in length.
• The data for each sample population was not merged, but were treated as two separate and distinct samples for all stages of this study, including the analysis.
• The data for each sample population was not weighted.
• To maximize response rates, a minimum of eight call-backs were made before retiring a number. Telephone calls were made during regular business hours.
• A pre-test was conducted in both official languages, as follows:
  • CSBFP sample - 10 English, 5 French
  • SME sample - 10 English, 5 French.
• Sponsorship of study was revealed (i.e. Industry Canada).

The following tables present the call disposition information for this survey, as well as calculation of the response rates (using the MRIA formula):

CSBFP Sample – Call Results and Response Rates Table

Total Numbers Accepted	6 352
Total out of scope	512
Numbers not in service	507
Duplicates	4
Fax or modem lines	0
Blocked by Telephone Company	1
Unresolved	2 613
Busy, no answers, Answering machines	2 611
Retired, called 10 times without success	2
In-scope Non-responding	567
Language difficulty	80
Other	26
Unavailable	43
Business Refusal	393
Break offs	25
In-scope Responding units	2 660
Completes	502
Ineligible	0
Quota Filled	2 158
Response Rate	45.5%

SME Sample – Call Results and Response Rates Table

Total Numbers Accepted	5 343
Total out of scope	955
Numbers not in service	948
Duplicates	4
Fax or modem lines	0
Blocked by Telephone Company	3
Unresolved	2 480
Busy, no answers, Answering machines	2 253
Retired, called 10 times without success	227
In-scope Non-responding	1 049
Language difficulty	93
Other	31
Unavailable	96
Business Refusal	816
Break offs	13
In-scope Responding units	859
Completes	503
Ineligible	290
Quota Filled	66
Response Rate	19.6%

Notes to Reader

Tracking/comparison of results: The current study builds on an earlier awareness study conducted in 2001, entitled Canada Small Business Financing Act Awareness Study (2001) and was designed to allow for comparability in key areas. To maximize comparability with the 2001 CSBFA awareness study, the present study adopted a similar sampling methodology. To this end, a number of tracking graphs comparing current results to results from 2001 are included in the report.

Report Structure: When reporting on results from the two populations, results for CSBFP borrowers are generally presented first, followed by results for the general SME sample. Some results, however, are presented in comparative form (e.g. a graph comparing CSBFP borrowers to the general SME sample).

Reporting of results: At times, the number of respondents (i.e. not the percentage) that answered certain questions or answered in a certain way is provided. The following method is used to denote this: n = 50, which means the number of respondents, in this instance, is 50. The number of respondents changes throughout the report because questions were often asked of sub-samples of the survey populations. Accordingly, readers should be aware of this and exercise caution when interpreting results based on smaller numbers of respondents. Some of the graphs do not sum to 100 percent due to rounding.

Note on Terminology: Throughout this report, recipients of CSBFP loans are referred to as ‘CSBFP borrowers’ or ‘borrowers’. Respondents from the general SME sample are referred to as ‘representatives of SMEs’.

Appended to this report is the questionnaire (in English and French).

Corporate Characteristics

This section presents key corporate characteristics of the businesses included in this research, both the SMEs and the CSBFP borrowers, as well as characteristics of survey respondents.

Position of Respondent

Respondents who participated in this survey on behalf of their firms held very senior positions. Substantial and similar majorities of CSBFP borrowers and SME representatives were owners of their companies (72- 75 percent). Most of the rest were presidents and/or CEOs and other senior managers and executives responsible for financial matters^{Footnote 1}. Included in the ‘other’ category are managers and administrators (unspecified).

Firm Size

Borrower and SME firms were similar in size in terms of the number of employees. The large majority have 2-4 employees (35-36 percent) or 5-20 employees (42-45 percent). Most of the remaining firms (13-14 percent) have only one employee (i.e. the respondent). Relatively few have more than 20 employees (6-7 percent). The number of employees included full-time and part-time staff in all locations in Canada, the latter calculated as the number of full-time equivalents. This did not include contract staff or outsourced work.

Age of Business

There is considerable variety in the length of time that businesses included in this research have been in operation. Well over half the borrower firms are ‘start-up businesses’ (defined as firms that have been in existence for three years or less for the purposes of this research). Among these ‘start-up businesses’, over one-third (37 percent) are very young firms, having been in existence for less than one year, while one-quarter have been in existence for between 1-3 years. Over one-third of borrowers (38 percent) have been in existence for more than three years.

The situation among the SMEs was quite different. The large majority of these firms are not start-up businesses. Most (56 percent) are over 10 years old. One in five SMEs are ‘start-up businesses’ (i.e. three years old or less)^{Footnote 2}.

Company Revenues

All businesses included in this research had annual revenues for 2006 of $5 million dollars or less before taxes and deductions. Beyond that, however, there was considerable variety in revenues, although the two sample populations are very similar in terms of their revenues. Half the borrower and SME firms (50-51 percent) have annual revenues of $300,000 or less. Of these, one-quarter of borrowers (24 percent) and one-fifth of SMEs (21 percent) earned less than $100,000. Among the rest, relatively similar proportions of borrowers and SMEs (14-18 percent) earned between $300,000 and $500,000, $500,000 and $1 million, and $1-5 million.

Sector

CSBFP borrowers are most likely to operate in the food and drink services sector (22 percent), followed by the retail trade sector (15 percent) and then transportation and warehousing (10 percent). Following this, in descending order, are services (unspecified), mining/oil/gas, construction, manufacturing, professional/scientific and technical services, agriculture/fishing/hunting/forestry, health care/social assistance, arts/entertainment/ recreation, real estate and rental/leasing, finance/insurance, and administrative/support/waste management services. Included in the ‘other’ category are accommodation services, educational services, utilities, and wholesale trade.

Industry/Sector: CSBFP Borrowers

Q5. In which industry or sector does your business operate?

Industry/Sector	%	Industry/Sector	%
Phoenix SPI; Industry Canada - June 2007
Food & Drinking Services	22	Agric./Fishing/Hunting/Forestry	5
Retail Trade	15	Health Care/Social Assistance	3
Transportation/Warehousing	10	Art, Entertainment, Recreation	3
Other Services	9	Real Estate/Rental/Leasing	2
Mining/Oil/Gas	7	Admin./Support, Waste Mgmt.	2
Construction	6	Finance & Insurance	2
Manufacturing	6	Other	4
Prof./Scientific/Technical	5

SMEs are also most likely to operate in the food and drink services sector (19 percent), followed by other services (unspecified) (15 percent), the retail trade sector (13 percent), and transportation and warehousing (11 percent). Following this, in descending order, are manufacturing, construction, professional/scientific and technical services, finance/insurance, agriculture/fishing/hunting/forestry, arts/entertainment/recreation, health care/social assistance, mining/oil/gas, wholesale trade, and utilities. Included in the ‘other’ category are accommodation services, educational services, and real estate and rental/leasing.

Industry/Sector: SMEs

Q5. In which industry or sector does your business operate?

Industry/Sector	%	Industry/Sector	%
Phoenix SPI; Industry Canada - June 2007
Food & Drinking Services	19	Agric./Fishing/Hunting/Forestry	3
Other Services	15	Health Care/Social Assistance	3
Retail Trade	13	Art, Entertainment, Recreation	3
Transportation/Warehousing	11	Mining/Oil/Gas	2
Manufacturing	7	Utilities	2
Construction	6	Wholesale Trade	2
Prof./Scientific/Technical	5	Information/cultural	2
Finance & Insurance	4	Other	3

Region

For both sample populations, businesses were distributed across all regions of the country, with approximately one-third located in Ontario and the West, just under one-quarter in Quebec, and 10 percent in Atlantic Canada.

Rural-Urban Location

The large majority of firms in both sample populations, approximately three-quarters (72-78 percent), are situated in urban areas. Note that this information, based on the responding business’ postal code, was not available for many companies in the SME sample.

Language

Over three-quarters of respondents (79-82 percent) speak English.

Gender

Most respondents in both populations, between two-thirds and almost three-quarters, were male.

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Footnotes

1. ^{1 back to footnote reference 1} To be eligible to participate in this study, participants had to be an owner, CEO, president, or senior manager/executive in the financial area.
2. ^{2 back to footnote reference 2} There was a quota placed on SME businesses for this survey, where 100 needed to be three years of age or less.

Financial Dealings

This section reports on the experience of businesses when it comes to their financial dealings, including the financial institutions and financing options they have used, whether they have tried to obtain loans, and their success in so doing.

Most Firms Use Only One Financial Institution for Banking & Financial Needs

Large and almost identical majorities of borrowers and representatives of SMEs indicated that their business uses only one financial institution for their banking and other financial arrangements. Nearly three-quarters (71-72 percent) said this, while identical numbers in each population (28 percent each) said their firm uses more than one such institution.

The proportion of businesses that use more than one financial institution has not changed compared to six years ago.

Variety of Financial Institutions Used

Business managers were asked which financial institution their business uses most often for their banking. As the accompanying graphs show, there was considerable variety in the financial institutions used by respondents, though all the major financial institutions were identified by at least some respondents.

Among borrowers, the Royal Bank of Canada was identified most often (24 percent), followed by the Bank of Nova Scotia and Toronto Dominion-Canada Trust (20 percent each). Cooperatives, including Caisses populaires and credit unions, were also identified relatively frequently (15 percent each).

Institutions cited less often include the Bank of Montreal (7 percent), the Canadian Imperial Bank of Commerce and Business Development bank (5 percent each), and the National Bank (3 percent). Included in the 'other' category are American banks (unspecified), HSBC, ING Direct, and community development programs (unspecified).

These results include institutions used by borrowers on a secondary basis (i.e. if they use more than one institution). With one exception, this more complete list of all institutions used mirrors the order of the list of primary institutions only (i.e. the institution they used most often). The exception was the Business Development Bank, which was not identified as a primary source for financing by anyone. This is because every BDC client has a primary private-sector bank, and obtains from the BDC services it cannot obtain from this primary lender.

With a few exceptions, the list of financial institutions used by borrowers has changed little over the past six years. The most notable changes have been an increase in use of TD-Canada Trust (20 percent vs. 5 percent in 2001) and a decrease in use of Caisses populaires (15 percent vs. 27 percent in 2001). Indeed, Caisses populaires, which headed the list of institutions used by borrowers in 2001, has dropped to fourth place overall in 2007. Interestingly, use of credit unions has increased over this same period (15 percent vs. 9 percent in 2001).

Financial Institutions Used (over time): CSBFP Borrowers

Financial Institution	2007  percent	2001  percent
Phoenix SPI; Industry Canada - June 2007
RBC	24	26
BNS/Scotiabank	20	17
TD-Canada Trust	20	5
Caisses Populaires	15	27
Credit unions	15	9
Bank of Montreal	7	10
CIBC	5	11
BDC	5	4
National Bank	3	5
Other	9	10

The Royal Bank of Canada also led the way among financial institutions used by SMEs (19 percent), although it was followed closely by Toronto Dominion-Canada Trust (17 percent). Moreover, a cluster of other institutions was also identified relatively frequently (11-15 percent) including credit unions, the Bank of Nova Scotia, the Canadian Imperial Bank of Commerce, Caisses populaires, and the Bank of Montreal. These were followed, at a distance, by the National Bank (4 percent) and the Alberta Treasury Branch (3 percent). Included in the ‘other’ category are HSBC, ING Direct, BDC, and community development programs (unspecified). As was the case with borrowers, these results include institutions used by borrowers on a secondary basis (i.e. if they use more than one institution).

Financial institutions used by SMEs have changed relatively little over the past six years. The most notable change has been a decrease in use of the Royal Bank of Canada (19 percent vs. 24 percent in 2001). That said, the Royal Bank still heads the list of financial institutions used, as it did six years ago. Changes in the use of other institutions tended to be small (4 percent or less), although in some instances these small changes translated into differences in the rank ordering of institutions. For example, while use of CIBC has declined only slightly compared to six years ago (14 percent vs. 17 percent in 2001), this institution has dropped from its second place position among institutions used in 2001 to fifth place overall. Conversely, credit unions have moved up from fifth place in 2001 to third place.

Financial Institutions Used (over time): SMEs

Financial Institution	2007  percent	2001  percent
Phoenix SPI; Industry Canada - June 2007
RBC	19	24
TD-Canada Trust	17	16
Credit unions	15	11
BNS/Scotiabank	14	10
CIBC	14	17
Caisses Populaires	12	9
Bank of Montreal	11	15
National Bank	4	7
Other	10	12

Term Loans – Main Financing Option Used by CSBFP Borrowers

One financing option dominates among borrowers, and is the only one used by a majority of them – term loans. More than two-thirds of CSBFP borrowers (71 percent) had used this option during the previous five years^{Footnote 3}. No other financing options came close. Identified less often, but still by substantial numbers, were lines of credit (40 percent), followed at a distance by credit cards (27 percent). Mentioned much less frequently (6-10 percent) were credit from suppliers, capital leasing for equipment, government grants, and equity financing. Small numbers (3 percent or less) identified operational leases and venture capital. Included in the ‘other’ category are other unspecified loans, general banking services, and capital in general. Relatively few (7 percent) said their firm has used no external financing in the previous five years.

There have been some significant changes in financing options used by borrowers over the previous six years, all of them representing decreases in use. While use of term loans and credit cards remain unchanged, use of lines of credit decreased substantially (40 percent vs. 75 percent in 2001), as did use of capital leasing (8 percent vs. 41 percent in 2001) and use of operational leases (3 percent vs. 22 percent in 2001). Use of venture capital has also decreased (2 percent vs. 12 percent in 2001).

Financing Options Used During Past 5 Years (over time): CSBFA Borrowers

Financing Options	2007  percent	2001  percent
Phoenix SPI; Industry Canada - June 2007
Term loans	71	70
Lines of credit	40	75
Credit cards	27	27
Capital leasing for equipment	8	41
Operational leases	3	22
Venture capital	2	12
Other	3	8

Lines of Credit Used Most Often by SMEs

Lines of credit are the most commonly used financing option among SMEs. A substantial minority (42 percent) have used this financing option, followed at a distance by term loans (28 percent) and credit cards (24 percent). Mentioned much less often were credit from suppliers (8 percent) and capital leasing for equipment (6 percent). Small numbers (3 percent or less) identified government grants, equity financing, operational leases and venture capital. Included in the ‘other’ category are general banking services. A substantial proportion, one-quarter of SME representatives, said their firm has used no external financing during the previous five years.

SMEs are much less likely to use term loans than CSBFP borrowers (28 percent vs. 71 percent)

As was the case with CSBFP borrowers, there have been some significant changes in financing options used by SMEs over the previous six years. Moreover, they all involve decreases in use, the most substantial of which mirror declines in use among borrowers. Use of lines of credit has decreased somewhat (42 percent vs. 59 percent in 2001), as has use of capital leasing for equipment (6 percent vs. 24 percent in 2001) and use of operational leases (2 percent vs. 14 percent in 2001). Use of venture capital has also decreased (2 percent vs. 4 percent in 2001).

Financing Options Used During Past 5 Years (over time): SMEs

Financing Options	2007  percent	2001  percent
Phoenix SPI; Industry Canada - June 2007
Lines of credit	42	59
Term loans	28	36
Credit cards	24	30
Capital leasing for equipment	6	24
Operational leases	2	14
Venture capital	2	4
Other	2	3

Two-Thirds of Borrowers Acknowledge Loan Application During Past Year

Borrowers and representatives of SMEs differed noticeably concerning applications for a term loan from a financial institution over the past 12 months. Two-thirds of borrowers said their business applied for a term loan during this period. This compares to only 16 percent of representatives of SMEs.

The fact that one-third of borrowers said that their firm did not apply for a loan is noteworthy in light of the fact that all of them would have received a CSBFP loan during the previous year.

Compared to six years ago, the number of borrowers who acknowledge having applied for a loan has decreased (66 percent vs. 82 percent in 2001). However, when interpreting these results it is important to note that in 2001 borrowers were asked if their firm had ever applied for a loan as opposed to a loan over the previous 12 months. In other words, the wider timeframe may account in part for the larger proportion of respondents who, in 2001, said their company had applied for a loan. As well, other aspects of the question wording were somewhat different.

Business executives who said their firm applied for a loan during the previous year were asked how often their business had applied for a loan during this period. Among borrowers, nearly three-quarters (73 percent) said their firm applied only once. Most of the rest (17 percent) said their firm applied twice. Relatively few applied more often.

As the accompanying graph shows, the frequency of loan applications among borrowers has changed over time. Current borrowers were much more likely to acknowledge one loan application only (73 percent vs. 44 percent in 2001), while six years ago CSBFP borrowers were much more likely to acknowledge three or more applications (32 percent vs. 8 percent). However, when interpreting these results it is important to note that in 2001 respondents were asked how many loans their firm had applied for over the past two years. The more extended timeframe in 2001 may help explain the greater proportion of respondents acknowledging multiple loan applications.

When representatives of SMEs who said their firm had applied for a loan during the previous year were asked how often their business had applied for a loan during this period, over two-thirds (70 percent) said their firm had applied only once. Nearly all the rest (23 percent) said their firm applied twice. Seven percent said their firm applied three times or more.

Representatives of SMEs in 2001 were more likely to have made multiple loan applications (19 percent making three or more applications vs. 7 percent in 2007). Once again, however, this is not surprising when one takes into account that respondents in 2001 were asked to use the past two years as opposed to one year as their timeframe.

Substantial Majority of Borrowers Received Full Amount of Loan

Among borrowers who acknowledged having made loan applications, the large majority (82 percent) indicated that they were successful in obtaining the loan for the full amount requested. An additional 10 percent said their firm obtained a loan but for a lesser amount, while 4 percent volunteered that they received some loans but not others (multiple responses accepted).

Relatively few (5 percent) said they were turned down completely.

Success rates among borrowers have changed little compared to six years ago.

Among representatives of SMEs who said their firm applied for a loan during the past year, a majority (59 percent) indicated that they were successful in obtaining the loan for the full amount. An additional 4 percent said their firm obtained a loan, but for a lesser amount. As well, 5 percent volunteered that they received some loans but not others. Over one-quarter (28 percent) said they were turned down for the loan(s).

Representatives of SMEs were more likely to say that their firm obtained a loan in full or in part in 2001.

CSBFP Borrowers More Likely to Have Obtained Loan for Full Amount

CSBFP borrowers were much more likely than SME representatives to say their business received a loan for the full amount requested (82 percent vs. 59 percent). Conversely, SME representatives were much more likely to indicate that they were turned down for the loan(s).

Loans Tend to Meet All or Most of Firms' Financing Needs

Among borrowers who acknowledged receiving a loan, the vast majority indicated that the loan in question met most or all of their financing needs. The largest proportion (43 percent) said the loan met all their financing needs, while one in five said it met between 76-99 percent of their needs, and over one-quarter (28 percent) said it met between half and three-quarters of their needs. Relatively few (8 percent) indicated that the loan met less than half their financing needs.

Results among representatives of SMEs were similar. Nearly half (46 percent) said the loan met all their financing needs, 22 percent said it met between 76-99 percent of their needs, and slightly less (19 percent) said it met between half and three-quarters of their needs. Eleven percent indicated that the loan met less than half their financing needs.

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Footnotes

1. ^{3 back to footnote reference 3} The timeframe for this question was adjusted for firms that were less than five years old.

Awareness and Use of CSBFP

This section reports on awareness of a federal government program that guarantees the loans of small businesses, including awareness of the CSBFP specifically, and explores related issues.

Nearly One-Quarter of CSBFP Borrowers Think Loan Not Covered by Federal Program

CSBFP borrowers and SME representatives who said that their business had received one or more loans during the previous 12 months were asked whether the loan(s) was/were covered by a program offered by the federal government that provides a guarantee on loans to small business.

Among CSBFP borrowers, nearly one-quarter (23 percent) said that the loan was not covered by a program offered by the federal government that provides a guarantee on loans to small business, while an additional 1 percent was unsure. This despite the fact that all of these businesses received loans under the CSBFP. This suggests that financial institutions are not consistently identifying the CSBFP to businesses that receive it.

Among representatives of SMEs, the vast majority (87 percent) said that the loan was not covered by a program offered by the federal government that provides a guarantee on loans to small business. However, 9 percent thought that their loan was covered by such a program. That said, this equates to only five SME respondents (9 percent of 54 respondents).

Awareness among CSBFP borrowers that their loan is covered by a program offered by the federal government that provides a guarantee on loans to small business is virtually identical to what it was six years ago. On the other hand, SME representatives are much less likely to say that their loan is covered by such a program (9 percent vs. 24 percent in 2001).

Most Borrowers Who Acknowledge Federal Loan Cannot Remember Program Name

Most borrowers who indicated that their firm received a loan covered by a federal program could not recall the name of the program. In total, 58 percent could not recall any name, while a further 28 percent identified the program as a 'small business loans' program in a generic manner, although a few of these may have specifically identified the Small Business Loans Act. As well, another 3 percent identified the program as a "guaranteed loan for small business".

In total, 7 percent identified the program correctly by name as the Canada Small Business Financing Program. Two percent identified the program as a Business Improvement Loan. Included in the 'other' category are a business development loan.

Compared to six years ago, the ability of CSBFP borrowers to identify the program by its correct name (i.e. CSBFP) has increased to 7 percent, compared to one respondent in 2001.

Of the five representatives of SMEs who thought their firm had received a loan covered by a federal program, they all identified variations of a small business loan generically or a guaranteed loan for small business.

Most Businesses Denied Loans Were Not Informed of Federal Loan Program

Managers of businesses whose loan applications were turned down were asked whether the financial institution brought to their attention any programs offered by the federal government that provide a guarantee on loans to small business.

Among CSBFP borrowers (n = 21), three-quarters (76 percent) said that such a program was not brought to their attention. As well, 14 percent were unsure or could not recall, while 10 percent (two participants) said it was brought to their attention.

Among representatives of SMEs (n = 25), all but one (96 percent) said that they were not informed about the federal government program.

Of the three respondents whose businesses were refused a loan and who said that the financial institution did identify a loan program offered by the federal government, none could recall the name of the program.

Most CSBFP Borrowers Aware of Federal Government Guaranteed Loan Programs

All respondents (i.e. CSBFP borrowers and SME representatives) who did not indicate awareness of a federal government loan program by name were asked the following question:

Are you aware of any programs of the federal government that guarantee the loans of small businesses and share the risk with the financial institution?

In response, just over half the CSBFP borrowers (53 percent) said they were aware of such programs, while 46 percent said they were not. Awareness was much lower among representatives of SMEs. Just over one-quarter of SMEs (28 percent) claimed to be aware of a federal government program that guarantees the loans of small businesses.

In total, therefore, 71 percent of all CSBFP borrowers claimed to be aware of a federal government program that guarantees the loans of small businesses. This includes borrowers who acknowledge receiving a loan covered by a federal program, those whose firm was turned down for a loan, and those who indicated awareness of federal government programs when asked explicitly.

This constitutes 'unaided awareness' of federal loan programs in general (i.e. not by name).

Awareness was much lower among SME representatives. In total, just over one-quarter of all SMEs representatives (28 percent) claimed to be aware of a federal government program that guarantees the loans of small businesses.

Awareness of federal government programs that guarantee the loans of small businesses is lower than it was six years ago, both among CSBFP borrowers (72 percent vs. 81 percent in 2001) and among representatives of SMEs (28 percent vs. 41 percent in 2001).

Majority of Those Aware of Federal Program Cannot Remember Name

These respondents that were aware of federal programs that guarantee loans of small businesses when asked explicitly were asked if they could recall the names of any such programs. Small numbers (3 percent CSBFP borrowers, 1 percent SME representatives) identified the CSBFP by name.

Most Unaware of CSBFP Program by Name on Aided Basis

As a final measure of awareness of the CSBFP, all participants who had not identified the program by name were asked directly if they had ever heard of the program (with its name provided to them). Even on this aided basis, only about one in five (19-22 percent) claimed to have heard of the program. Nearly three-quarters (72-74 percent) of the CSBFP borrowers and representatives of SMEs who were asked this question said that they had not heard of the program.

One-Quarter of CSBFP Borrowers Aware of Program by Name

Total awareness of the CSBFP among borrowers is 25 percent. In other words, one-quarter of executives of businesses that received a loan under this program acknowledge awareness of the program by name. Moreover, awareness is much more likely to be aided than unaided. In all, only 4 percent of borrowers identified the CSBFP by name in an unprompted manner. This includes borrowers who acknowledged receiving a loan covered by a federal program, those whose firm was turned down for a loan, and others who indicated awareness of this program when asked explicitly about federal programs that guarantee the loans of small businesses.

In addition, 51 percent claimed to be aware of federal government loans programs in general. That is, they said they knew that there was one or more federal programs that share the risk with financial institutions, even if they knew nothing else about such programs.

Finally, 24 percent percent were not even aware that there were any such programs. To be clear, these 24 percent consistently indicated in all related questions that they were not aware of any federal government programs that guarantee the loans of small businesses and share the risk with financial institutions.

Limited Awareness of CSBFP Among SMEs

Awareness of the CSBFP among representatives of SMEs is relatively limited. Only one in five (19 percent) claimed awareness of the program by name, almost all of whom were able to do so on an aided basis only. Only one SME representative identified the CSBFP by name in an unprompted manner.

In addition, 20 percent claimed to be aware of federal government loans programs in general – they knew there was one or more federal programs that share the risk with financial institutions, even if they knew nothing else about such programs.

The clear majority, 61 percent, were not even aware that there were any such programs. Once again, these executives consistently indicated in all related questions that they were not aware of any federal government programs that guarantee the loans of small businesses and share the risk with financial institutions.

Relatively Limited Knowledge of CSBFP

All respondents who claimed to be aware of the CSBFP by name (aided and unaided awareness) were asked what they knew about it.

Among CSBFP borrowers, over one-third (37 percent) said they knew nothing at all about the program, while a further 3 percent did not provide an answer. In total, therefore, 40 percent of respondents claiming to be aware of the program by name were unable to provide any substantive feedback about it. The most frequently identified aspect of the program was that it is a government program designed to help small business get financing. Just over one-quarter (27 percent) identified this. This was followed by the perception that losses are shared by government (17 percent) and the perception that fewer guarantees are required to secure the loan (14 percent).

All other responses lacked salience (6 percent or less). These included the view that there is a maximum financing amount, that the loan is restricted to financing certain kinds of assets, that it is a bank-administered program, that it is too expensive, and that there are program registration fees. Included in the 'other' category are perceptions that the criteria are rigid and that the loan is related to equipment leasing.

The inability of borrowers to identify anything about the program has decreased over time (40 percent vs. 50 percent in 2001). Current borrowers were much more likely to say the program is designed to help small business get financing (27 percent vs. 7 percent in 2001) and that the losses are shared by government (17 percent vs. 5 percent in 2001). However, caution should be exercised when tracking responses that have been coded (more open to coding error/difference in wording).

Knowledge of CSBFP (over time): CSBFP Borrowers

Knowledge of CSBFP	2007  %	2001  %
Phoenix SPI; Industry Canada - June 2007
Govt. program to help small businesses	27	7
Losses shared by Govt.	17	5
Max. financing amount	6	4
Restricted loans	6	2
Nothing/no response	40	50
Other	4	13

Among representatives of SMEs, a majority (57 percent) said they knew nothing about the program, while a further 1 percent did not provide an answer. As was the case among borrowers, the most frequently identified aspect of the program was that it is designed to help small business get financing (22 percent). All other responses were provided by small numbers (6 percent or less). These included the view that fewer guarantees are required to secure the loan, that there are many rigid criteria, that there is a maximum financing amount, that the loan is restricted to financing certain kinds of assets, and that it is too expensive.

Included in the 'other' category are perceptions that there are registration fees and that the loan is related to equipment leasing.

As was the case with borrowers, the inability of SME representatives to identify anything about the program has decreased over time (58 percent vs. 69 percent in 2001). Current respondents were much more likely to say the program is designed to help small business get financing (22 percent vs. 6 percent in 2001).

Knowledge of CSBFP (over time): SMEs

Knowledge of CSBFP	2007  %	2001  %
Phoenix SPI; Industry Canada - June 2007
Govt. program to help small businesses	22	6
Losses shared by Govt.	2	3
Nothing/no response	58	69
Other	6	12

Banks – Borrowers' Main Source of Information About CSBFA

CSBFP borrowers aware of the program were most likely to have learned about it through a bank officer (41 percent), followed at a distance by a friend or colleague (22 percent). The only other source of information identified with any frequency was a business service provider (8 percent).

Small numbers (4 percent or less) identified the following: federal government website, brochure/pamphlet, bank/private sector firm website, CSBFP website, a previous CSBFP loan, involvement in funding programs in general, and media sources.

Some (6 percent) could not recall their source of information, and a further 4 percent did not provide an answer. Included in the 'other' category are business associations and the Internet (unspecified).

The likelihood of having learned about the CSBFP from a bank officer has decreased over time (41 percent vs. 53 percent in 2001), though it remains the main source of information about the program. By contrast, the likelihood of having heard about it from a friend or colleague has increased (22 percent vs. 11 percent in 2001).

Source of Info about CSBFP (over time): CSBFP Borrowers

Source	2007  %	2001  %
Phoenix SPI; Industry Canada - June 2007
Bank officer	41	53
Friend/colleague	22	11
Business service provider	8	6
Brochure/Pamphlet	2	6
Other	4	11

Acquaintances & Publications – SMEs' Main Source of Information About CSBFA

Representatives of SMEs aware of the CSBFP were most likely to have learned about it through a friend or colleague (26 percent) or a brochure/pamphlet (25 percent). In contrast to CSBFP borrowers, relatively few SME representatives (9 percent) learned about the program through a bank officer.

Similar numbers (5-7 percent) learned about the program through a government contact, business association, involvement in funding programs in general, or a service provider. Some (8 percent) could not recall their source of information. Included in the 'other' category are a federal government website (unspecified), the CSBFP website, and a previous CSBFP loan.

The likelihood of having learned about the CSBFP from friends/colleagues and brochures/pamphlets has increased over time. Conversely, the likelihood of learning about it through media sources and business service providers has decreased.

Source of Info about CSBFP (over time): SMEs

Source	2007  %	2001  %
* Newspapers, radio and publications in 2001 (back to footnote reference *) ** Website in 2001 (back to footnote reference **) Phoenix SPI; Industry Canada - June 2007
Friend/colleague	26	14
Brochure/Pamphlet	25	17
Bank officer	9	12
Media sourcesFootnote *	5	12
InternetFootnote **	4	5
Business service provider	2	8
CSBFP website	1	5
Other	1	12

Majority of CSBFP Borrowers Informed About Program by Lender

A majority of borrowers aware of the CSBFP (52 percent) indicated that when seeking financing, the lender identified the program to them for consideration. Just under one quarter (22 percent) said they themselves asked about the CSBFP, while 17 percent said they neither asked about it nor was it brought to their attention. Eight percent indicated that they could not recall, and 1 percent did not provide an answer.

Among representatives of SMEs aware of the program, three-quarters (74 percent) said they neither asked about it nor was it brought to their attention, 15 percent said the lender identified the program to them for consideration, and 4 percent said they themselves asked about it. Five percent indicated that they could not recall, and 2 percent did not provide an answer.

Many Borrowers Unsure Whether Business Obtained Loan Under Federal Program

All respondents except those who indicated that their firm has not obtained external financing were asked if their business has ever obtained a loan covered by a government program, either federal or provincial, that guarantees the loans of small businesses and shares the risk with the financial institution.

Among CSBFP borrowers, 60 percent indicated that their firm has obtained such a loan, either federally (32 percent), provincially (10 percent), or they were unsure from which level of government (18 percent). Conversely, one-third (32 percent) said they had not received such a loan. Despite the fact that all these participants' businesses received a loan under the CSBFP, only one-third were certain that their business has obtained a loan covered by a federal government program.

Eighteen percent were unsure about the level of government, and 7 percent were not sure or could not recall.

Results have changed little compared to 2001. Borrowers are slightly less likely to indicate that they have never obtained such a loan (32 percent vs. 38 percent in 2001) and slightly more likely to indicate that they have received such a loan from the federal government (32 percent vs. 27 percent in 2001).

Among representatives of SMEs, approximately three quarters (74 percent) indicated that their firm has never received such a loan, either federally or provincially. Conversely, 23 percent indicated that their firm has obtained such a loan. Seventeen percent said they obtained a federal loan, 3 percent a provincial loan, and 3 percent were unsure about the sponsor.

Compared to 2001, representatives of SMEs are more likely to indicate that they have received a loan covered under a federal government program (17 percent vs. 9 percent in 2001).

Vast Majority Have Never Refused Government Guaranteed Loan

The vast majority of CSBFP borrowers who have obtained external financing for their business (88 percent) said that they have never refused to accept a government guaranteed loan, either federal or provincial. Nine percent said they have refused such a loan and 3 percent could not recall or did not answer the question.

Of those who indicated that they refused such a loan, 4 percent said they refused a federal loan, 2 percent a provincial loan, and 3 percent were unsure of the sponsor.

These results are virtually identical to results in 2001.

When borrowers whose firms refused such a loan (n = 42) were asked why, the most frequently identified reason was that it was too expensive (31 percent), followed by perceptions that the program was too restrictive and that the loan was not necessary (21 percent each). Some felt that there was too much of an administrative burden (12 percent), while a few said they had other financing options or refused on the advice of the banker/lender.

The situation was similar among representatives of SMEs, with 84 percent indicating that they have never refused to accept a government guaranteed loan, either federal or provincial. Eight percent said they had refused such a loan and 7 percent could not recall or did not answer the question. Of those who indicated that they refused such a loan, 3 percent said they refused a federal loan, 2 percent a provincial loan, 2 percent said they refused both, and 1 percent were unsure of the sponsor.

As was the case among borrowers, these results are virtually identical to results in 2001.

Representatives of SMEs whose firms refused such a loan (n = 43) were most likely to explain their refusal by suggesting that it was too expensive or unnecessary (26 percent each), followed by the perception that the program was too restrictive (21 percent). Some felt that there was too much of an administrative burden (16 percent), while a few said they had other financing options. A few others (5 percent) could not recall why they refused the loan.

Satisfaction with Financing

This section reports on executives' views of the financing options available to small and medium-sized businesses, including the perceived importance of and satisfaction with different factors related to financing options.

High Importance Attributed to Many Factors When Considering Financing Options

All surveyed executives were asked to rate the importance of a number of factors to their business when it comes to obtaining financing or considering financing options (using a 5-point scale: 1 = not important at all; 5 = very important). The factors that were assessed were:

• The interest rate.
• The service fees.
• The time required to process applications.
• Access to a variety of financing options.
• The possibility of negotiating the terms of financing, such as service fees and repayment conditions.
• The amount of financing granted compared to the amount requested.
• The securities and guarantees required by financial institutions, whether personal or corporate.
• The quality of service received from the lender(s).

Three-quarters or more of CSBFP borrowers attributed importance to each of these factors. Moreover, each factor was much more likely to be considered very important than moderately important. Leading the way, and considered virtually equal in importance (88-89 percent), were the interest rate, service quality, and the amount of financing granted compared to the amount requested. These factors were followed closely by the possibility of negotiating the terms of financing (86 percent) and the time required to process applications (83 percent). Majorities (57-72 percent) attributed strong importance to each of these factors.

Virtually identical numbers (78-79 percent) attributed importance to the securities and guarantees required and the variety of financing options, with only slightly fewer (75 percent) considering the service fees important.

Borrowers who did not attribute importance to these factors were much more likely to rate them as neither important nor unimportant (i.e. scores of 3) than as unimportant.

Among representatives of SMEs, two-thirds or more attributed importance to each of these factors, and like CSBFP borrowers, executives were much more likely to attribute strong than moderate importance to each one. Leading the way in terms of importance was the interest rate (85 percent). Substantial and similar majorities (77-80 percent) attributed importance to the possibility of negotiating the terms of financing, service quality, and the amount of financing granted compared to the amount requested. Following this, in descending order of importance, were service fees (74 percent), the time required to process applications (71 percent), the securities and guarantees required (69 percent), and the variety of financing options (67 percent).

With one exception (interest rates), those who did not attribute importance to these factors were more likely to rate them as neither important nor unimportant than as unimportant. Between 6-10 percent considered these factors to be of little or no importance.

Borrowers were more likely than representatives of SMEs to attribute importance to each of these factors. This was especially the case regarding the variety of financing options (78 percent vs. 67 percent), service quality (89 percent vs. 78 percent), the application processing time (83 percent vs. 71 percent), the financing granted compared to the amount requested (88 percent vs. 77 percent), and the securities and guarantees required (79 percent vs. 69 percent).

Satisfaction With Aspects of Financing Varies Widely

Executives of firms that had used one or more of the main financing options available during the previous five years were asked to rate their level of satisfaction with each of these same factors using a similar 5-point scale (1 = very dissatisfied; 5 = very satisfied). If respondents' firms received financing on multiple occasions, they were asked to think in terms of their experience in general.

Levels of satisfaction with these factors varied widely both among borrowers and representatives of SMEs.

Among borrowers, satisfaction with these factors ranged from a high of 75 percent to a low of 39 percent. Substantial numbers of borrowers (73-75 percent) expressed satisfaction with the financing granted compared to the amount requested, and with the service quality. Moreover, satisfaction with both was more likely to be strong than moderate. A much smaller majority (55 percent) expressed satisfaction with the application processing time, with the rest almost equally divided between neutrality (scores of 3) and dissatisfaction.

Fewer than half the borrowers expressed satisfaction with each of the remaining factors, and satisfaction was more likely to be moderate than strong for each one. Nearly half (48 percent) expressed satisfaction with the securities and guarantees required, with the rest more likely to be neutral (31 percent) than dissatisfied (19 percent). Borrowers provided mixed assessments of the remaining factors, although they were more likely to express satisfaction than neutrality or dissatisfaction with each one. Similar proportions (39-42 percent) expressed satisfaction with the possibility of negotiating the terms of financing, the variety of financing options, the interest rate, and the service fees. A substantial minority (between approximately one-fifth and one-third) expressed either neutrality or dissatisfaction with each of these.

Dissatisfaction was highest regarding the service fees (31 percent), and ranged from 8-29 percent for other factors.

Among representatives of SMEs, satisfaction ranged from a high of 57 percent to a low of 29 percent. They were most likely to express satisfaction with the financing granted compared to the amount requested (57 percent). Smaller majorities expressed satisfaction with the processing time (53 percent) and service quality (52 percent).

Representatives of SMEs provided mixed assessments of the remaining factors. While they were more likely to express satisfaction with each one, a substantial minority (26-38 percent) expressed neutrality or dissatisfaction with each. More than one-third (35-39 percent) expressed satisfaction with the interest rate and the possibility of negotiating the terms of financing, with the rest almost equally divided between being neutral and dissatisfied.

Representatives of SMEs were least likely to express satisfaction with the variety of financing options, the securities/guarantees needed, and the service fees (29-31 percent each).

Dissatisfaction was highest regarding service fees (38 percent) and the securities/guarantees needed (32 percent), and ranged from 17-29 percent for other factors.

Borrowers were more likely than representatives of SMEs to express satisfaction with each of these aspects. More specifically, they were much more likely to be satisfied with the financing granted (75 percent vs. 57 percent), lender service quality (73 percent vs. 52 percent), the securities needed (48 percent vs. 30 percent), the variety of options (42 percent vs. 31 percent), and the service fees (39 percent vs. 29 percent). Differences were less pronounced concerning the interest rate (42 percent vs. 39 percent), the possibility of negotiating terms (42 percent vs. 35 percent) and application process time (55 percent vs. 53 percent).

The following graphs show the difference between perceived importance and the level of satisfaction with each factor for both survey populations.

Various Factors RE: Financing Options
Importance vs. Satisfaction
CSBFP Borrowers

Factor	Importance  %	Satisfaction  %	Gap +/-
Interest rate	89	42	-47
Negotiating terms	86	41	-45
Service fees	75	39	-36
Variety of options	78	42	-36
Securities/guarantees needed	78	48	-30
Application process time	83	55	-28
Lender service quality	89	73	-16
Financing granted vs. requested	88	75	-13

Various Factors RE: Financing Options
Importance vs. Satisfaction
SMEs

Factor	Importance  %	Satisfaction  %	Gap +/-
Service fees	75	29	-46
Negotiating terms	80	35	-45
Interest rate	84	39	-45
Securities/guarantees needed	69	30	-39
Variety of options	66	31	-35
Lender service quality	78	52	-26
Financing granted vs. requested	77	57	-20
Application process time	71	53	-18

As well, the following graphs plot the perceived importance of the various factors against satisfaction in the same areas. They are based on the mean scores for each issue on the 5-point scale for each population.

In the graph pertaining to borrowers, all issues above the horizontal line received mean importance ratings of 4.39 or higher, and all issues below the line received ratings of less than 4.39. All issues to the right of the vertical line received mean satisfaction ratings of 3.47 or higher and all issues to the left of the line received ratings of less than this.

As can be seen, relative strengths (i.e. areas where both importance and satisfaction were assessed above the mid-point on the scale) include service quality and the amount of financing granted compared to the amount requested. Relative challenges include the interest rate and the possibility of negotiating the terms of financing.

In the graph pertaining to representatives of SMEs, all issues above the horizontal line received mean importance ratings of 4.33 or higher, and all issues below the line received ratings of less than this. All issues to the right of the vertical line received mean satisfaction ratings of 3.21 or higher and all issues to the left of the line received lower ratings.

As can be seen, relative strengths include service quality and the financing granted. Relative challenges include the possibility of negotiating the terms of financing and the interest rate.

Many Satisfied with Available Financing Options

A majority of borrowers (55 percent) and a near majority of representatives of SMEs (45 percent) whose firms had used one or more of the financing options during the previous five years expressed overall satisfaction with the financing options available to them. Using a 5-point scale (1 = very dissatisfied; 5 = very satisfied), many expressed satisfaction with this, although it was more likely to be moderate than strong.

Borrowers who did not express satisfaction were more likely to be neutral (28 percent) than dissatisfied (16 percent). SME representatives who did not express satisfaction were similarly likely to be neutral or dissatisfied (24-26 percent).

Satisfaction With Aspects of CSBFP

CSBFP borrowers^{Footnote 4} that acknowledged receiving a CSBFP loan in the previous 12 months (i.e. were aware that the loan they received was part of the CSBF program) were asked how satisfied they were with various aspects of their CSBFP loan. Using a 5-point scale (1 = very dissatisfied; 5 = very satisfied), they were asked to rate their level of satisfaction with the following:

• The availability of information on the CSBF Program.
• The administrative reporting requirements related to the 'life' of the loan.
• The time needed to obtain approval.
• Other aspects of the application process.
• The program registration fees.
• The annual administration fee.
• The securities and guarantees that are required.
• The amount of financing granted compared to the amount requested.

Satisfaction with CSBFP loan aspects among borrowers ranged considerably, from 31 percent to 75 percent. They were most apt to be satisfied with the financing they received relative to their request (75 percent). Almost two-thirds (61-64 percent) were satisfied with other aspects of the application process, and the approval time. More than half also expressed satisfaction with the availability of program information and the administrative requirements (55-58 percent).

Satisfaction was lowest concerning fees associated with the CSBFP loan, including both the registration fees (37 percent) and the annual administration fee (31 percent). Dissatisfaction with these fees was correspondingly higher than with other loan aspects (27-31 percent vs. 7-20 percent).

Substantial Majorities Likely to Use Same Lenders in Future

The large majority of CSBFP borrowers (90 percent) and SME representatives (84 percent) whose firms received loans during the previous 12 months said their business would be at least moderately likely to use the same lender for financing in the future. Moreover, two-thirds from each population said their business would be very likely to do this. Representatives of SMEs were more likely to indicate that there would be little or no likelihood that their businesses continue to use the same lenders in future (17 percent vs. 9 percent of borrowers).

Borrowers who indicated that their firm would not be likely to use the same lender for financing in the future (n = 28) most often pointed to poor service quality to explain why (12 borrowers). This was followed by high service fees (8 borrowers), services no longer meeting their needs (5 borrowers), complex documentation or lack of need (4 borrowers each), and the guarantees required (2 borrowers) (multiple responses accepted).

Of the nine representatives of SMEs who said that their firm would not be likely to use the same lender in future, no more than two identified any one reason. Reasons included lack of need, high service fees, complex documentation, poor quality service, and services no longer meeting needs.

Most of Those Who Were Refused Loans Were Not Satisfied With Explanation

Respondents who indicated that their business was refused financing for a loan(s) in the past 12 months (30 borrowers; 27 SMEs) were asked how satisfied they were with the reason(s) provided by the financial institution to explain why the loan was refused. Using a 5-point scale (1 = very dissatisfied; 5 = very satisfied), the vast majority (83-85 percent or 23-25 respondents) expressed dissatisfaction with the explanation given, and most said they were very dissatisfied. Borrowers were more likely to express strong dissatisfaction than SME representatives (73 percent or 22 respondents vs. 52 percent or 14 representatives of SMEs).

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Footnotes

1. ^{4 back to footnote reference 4} Representatives of SMEs were not asked about this because none of their firms had received a CSBFP loan.

Satisfaction with CSBF Program Parameters

This section reports on executives' perceptions of various features of the Canada Small Business Financing Program.

Mixed Views of CSBFP Features

After being provided with a brief description of the CSBFP, surveyed executives were asked to indicate whether they consider the following features of the program to be too high, about right, or too low:

• The maximum loan size is $250 000.
• There is a registration fee of 2 percent of the total amount of the loan.
• The maximum amount of financing available is 90 percent of the eligible cost of the project or equipment.
• The interest rate is capped at prime plus 3 percent.

The results tended to be similar among both sample populations. Majorities in both populations agreed with two features of the CSBFP. There was widespread agreement among borrowers and representatives of SMEs (79-83 percent) that the maximum amount of financing of 90 percent is about right. That said, among those who did not agree with this, borrowers were more likely to think it was too low (11 percent), while representatives of SMEs were more likely to think it was too high (11 percent). Two-thirds in each population (66-68 percent) also agreed that the maximum loan size of $250 000 is about right. Moreover, in both populations, most of those who did not agree with this felt that the amount is too low.

Majorities disagreed with the two other features of the program. Well over half of the borrowers and SME representatives (59-62 percent) felt that the cap on the interest rate at prime plus 3 percent is too high, with nearly all the rest (34-39 percent) thinking it is about right. As well, over half the borrowers and SME representatives (52-56 percent) felt that the 2 percent registration fee is too high; virtually all the rest (42 percent in each group) said it is about right.

Most Regard Other Program Features as Reasonable

All respondents were then asked to comment on the 'reasonableness' of some additional features of the CSBFP. Thinking as both business representatives and taxpayers, they were asked whether they would describe each of the following features as very, somewhat, not very, or not at all reasonable:

• Only term loans are available under the program.
• CSBF loans are restricted to financing for equipment, real property or immovables, leasehold improvements, and program registration fees.
• If a borrower defaults on a loan, the federal government is responsible for 85 percent of eligible losses under the program, and the lender is responsible for 15 percent of the loss.

At least two-thirds of borrowers and representatives of SMEs regarded each of these features as at least somewhat reasonable. Moreover, with one exception, perceptions tended to be very similar both in number and intensity.

Strong and nearly identical majorities in both populations (80-83 percent) regarded the restriction to term loans and the financing restrictions as at least somewhat reasonable. By contrast, borrowers were much more likely to regard the loss sharing arrangements as at least somewhat reasonable (82 percent vs. 66 percent of representatives of SMEs). However, representatives of SMEs were almost twice as likely to regard this feature as not reasonable (32 percent vs. 17 percent of borrowers).

Most Who Acknowledge Receipt of CSBFP Express Satisfaction With Program Rules

Borrowers^{Footnote 5} who acknowledged receiving a CSBFP loan in the previous 12 months (n = 177) were asked how satisfied they were with the program's rules and procedures in terms of providing financing for small businesses. Using a 5-point scale (1 = very dissatisfied; 5 = very satisfied), 67 percent of borrowers indicated that they were satisfied with the program's rules and procedures. More specifically, one-quarter said they were very satisfied (score of 5), and 42 percent were moderately satisfied (score of 4). The remaining borrowers were much more likely to hold a neutral view, as opposed to a negative one (25 percent vs. 6 percent)

Borrowers More Likely to View CSBFP as Useful Than Representatives of SMEs

While majorities of both borrowers and representatives of SMEs regard the CSBFP as useful to themselves if they were having difficulty obtaining financing, borrowers were much more likely to think this. Using a 5-point scale (1 = not useful at all; 5 = very useful), 80 percent of borrowers rated the program as useful, with over half (57 percent) describing it as very useful. By comparison, 62 percent of SME representatives rated the program as useful.

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Footnotes

1. ^{5 back to footnote reference 5} Representatives of SMEs were not asked about this because none of their firms received a CSBFP loan.

Subgroup Variations

This section presents subgroup differences for key issues explored in this survey, including variations based on region, language, age of firm, location (i.e. urban-rural), and revenue size. Results are presented first for the CSBFP borrowers, and then for the SMEs. The findings are presented in two ways. First, we provide summary descriptions of the main differences or patterns in each area. These summaries are primarily textual in nature for ease of access to the information. Second, we provide a detailed table that presents a breakdown of the findings for the various subgroups. The tables are also organized by theme.

For this analysis, the different characteristics have been grouped as follows:

Region:

• West
• Ontario
• Quebec
• Atlantic

Language:

• English
• French

Age of firm:

• 3 years and less ('start-up firms')
• 4 years and older ('older firms')

Location:

• Urban
• Rural

Revenue:

• Less than $100 000
• $100 000-$299 000
• $300 000-$999 000
• $1 million or more

To provide further insight on specific issues of interest, additional analysis was performed on selected variables using the following sub-groups:

Perceived Usefulness of CSBFP to Firm:

• Not useful
• Somewhat useful
• Very useful

Overall Satisfaction with CSBFP Rules and Procedures

• Dissatisfied
• Neither satisfied nor dissatisfied
• Satisfied

Overall Awareness of CSBFP

• Aware
• Not aware

Overall Satisfaction with Financing Options Available

• Dissatisfied
• Neither satisfied nor dissatisfied
• Satisfied

Caution should be used when interpreting these results, as in some cases the sample sizes are relatively small.

CSBFP Borrowers

Overview

While a number of experiential, behavioural, and attitudinal differences were evident among respondents across the various subgroups, there were no strong or consistent patterns. To the extent that any patterns were evident, they tended to be based on firm age, location, language, and, to a lesser extent, revenue.

Differences by age of firm and location were most evident regarding loan-related activity and experience. Older firms and rural firms were more likely to have applied for a term loan during the previous 12 months, more likely to have received a loan for the full amount requested, and more likely to have received funding that met all their needs.

Differences in awareness, to the extent that they existed, were most evident regionally and by language. Executives in Ontario and the West and English-speaking executives were more likely to be aware of federal government loan programs in general and the CSBFP in particular.

Differences in satisfaction were most evident by language and location. Executives of rural firms and French-speaking executives were more likely than urban or English-speaking ones to express satisfaction with various factors related to financing. They were also more likely to express satisfaction with the financing options available to them. Finally, they were more likely to describe the program characteristics of the CSBFP as about right.

Differences by revenue, where they existed, either distinguished the smallest firms from the others or the largest ones from the others. For example, firms with revenues in excess of $100 000 were most likely to have received the full amount of requested financing, most likely to have heard about the CSBFP through a bank officer, and most likely to view the maximum financing of 90 percent for CSBFP as about right. Executives of firms with revenues of $1 million or more were most likely to express satisfaction with the financing options available to them, to view the CSBFP registration fee as too high, and to view the maximum loan amount as too low.

These and other subgroup differences are discussed in greater detail below.

Financing Options Used

In terms of the financing options being used or that have been used, the following subgroup differences presented themselves:

• Atlantic firms were noticeably more likely to use lines of credit and credit from suppliers than those in other regions, while those in Quebec were much less likely to make use of credit cards.
  
  
• Older firms were more likely to make use of lines of credit than their younger counterparts.
  
  
• Firms with revenues of $1 million or more were much more likely to use lines of credit, while use of credit cards increased with revenue.
  
  
• Rural firms were more likely than urban ones to use term loans, lines of credit, and credit from suppliers.
  
  
• English executives were more than twice as likely as French executives to report use of credit cards and credit from suppliers.

Applications for Term Loans in Past 12 Months

Executives in the West, in older firms, and in rural firms were most likely to report that their firm applied for a term loan during the previous 12 months. Awareness of the CSBFP was not a factor in making these applications (i.e. those aware and those not aware of the CSBFP were just as likely to have applied for a term loan)².

Success Obtaining Loans

In terms of success obtaining loans, the following sub-group differences were evident:

• Older firms were somewhat more likely to have received the full amount requested.
  
  
• Firms with revenues of less than $100 000 were least likely to have received the full amount of requested financing, while those with revenues of $1 million or more were the most likely to have received it.
  
  
• Rural businesses were more likely than urban ones to have received the full amount of financing.

Extent to Which Loans Met Needs

Regarding the extent to which the loans received met their financing needs, the following variations were evident:

• Regionally, only in Quebec did a majority of respondents report that all of their financing needs were met.
  
  
• Older firms were more likely to have received financing that met all of their needs.
  
  
• Rural firms were much more likely to receive financing that met all of their needs.
  
  
• French-speaking executives were most likely to report that their firm received financing that met 100 percent of their needs.

Overall Awareness of CSBFP and Federal Government Loans Programs

Overall awareness of the CSBFP program (i.e. unaided and aided) was highest among English-speaking executives, executives in Ontario and the West, and executives in younger or start-up firms.

Similarly, awareness of federal government loan programs in general was highest among English-speaking executives, executives in Ontario and the West, and those in urban locations.

Source of Information about CSBFP

The following were most likely to have first learned of the CSBFP through a bank officer:

• Executives in the West and the Atlantic region
• Executives in older firms
• Executives in firms with revenues in excess of $100K
• Rural executives
• English-speaking executives.

Executives in firms with revenues of $100 000 or less and rural executives were more likely to have heard about the CSBFP through a friend or colleague.

Importance of Financing Factors

While there were sub-group differences regarding the importance attributed to various factors regarding financing, there was no consistent pattern, nor were differences that large in general. The following differences are worth noting:

• Regionally, executives in the Atlantic region were most likely to attribute importance to all factors, except service quality and application process time.
  
  
• Executives in start-up firms were more likely to attribute importance to the securities/guarantees needed.
  
  
• The importance the application process time increased with firm revenue.
  
  
• Executives in rural firms were more likely to assign importance to the financing granted vs. the amount requested, while executives in urban firms were more likely to assign importance to application processing time.
  
  
• Borrowers dissatisfied with CSBFP rules and procedures overall were much less likely than others to attribute importance to lender service quality, negotiating terms of financing, the securities and guarantees needed, and service fees. This gap was most pronounced regarding the latter. Those satisfied with the rules were considerably more apt to attribute importance to lender service quality.

Satisfaction with Various Factors of Financing Options

As was the case regarding the importance of these factors, differences in satisfaction with them were evident, but followed no noticeable pattern. Differences included:

• Executives in older firms were more likely to be satisfied with the quality of service, the amount of financing granted, the application processing time, the possibility of negotiating terms, and the variety of financing options available. Executives in start-up firms were more likely to be satisfied with the securities and guarantees required from them.
  
  
• Executives in firms with revenues of $300 000 or more were most likely to be satisfied with the application processing time, and the variety of options available. Satisfaction with the securities and guarantees required decreased as firms' revenues increased in size.
  
  
• Executives of rural firms were more likely to express satisfaction regarding all factors, except service fees. Moreover, they were much more likely than urban executives to express satisfaction regarding most of these factors.
  
  
• French-speaking executives were more likely to express satisfaction regarding most factors. Moreover, they were much more likely than English-speaking executives to express satisfaction regarding the amount of financing granted, the variety of options, and negotiating terms.

Satisfaction with Availability of Financing Options

A majority of executives in all regions except Atlantic Canada expressed satisfaction with the financing options available. The following were also more likely to express satisfaction: executives in older firms, executives in firms with the largest revenues (i.e. $1 million or more), executives in rural areas, and French-speaking executives.

Perceptions of CSBFP Features

While there were differences regarding the various features of the CSBFP, there was no evident or consistent pattern to them:

• The registration fee of 2 percent was regarded as too high by a majority of executives in Ontario and the West, while bare majorities in Quebec and the Atlantic region regarded it as about right. Executives in firms with revenues over $1 million and English-speaking executives were also more likely to view the registration fee as too high. Those who thought that the CSBFP was very useful were also the least apt to see this fee as too high, and the most to see it as just right.
  
  
• The maximum loan size of $250 000 was most likely to be viewed as about right in Quebec and the Atlantic region, among rural executives, and among Frenchspeaking executives. Executives in firms with revenues over $1 million, executives in urban firms, English-speaking executives, and those who felt the program was at least somewhat useful to them were more likely to view this as too low.
  
  
• The maximum financing amount of 90 percent was most likely to be viewed as about right by executives in firms with revenues over $100 000. By contrast, those in Ontario and English speakers were much more likely than others to see it as too high. Executives for whom the program was not useful were more apt to agree this maximum was about right. Those who thought the program was somewhat useful were considerably more likely than others to view this maximum as too low.
  
  
• The interest rate was viewed as too high by a majority of executives in all regions, except Quebec. Mirroring this, English-speaking executives were much more likely to feel this way than French-speaking executives. The more useful executives viewed the program to be, the more apt they were to feel that this is about right, and the less likely they were to see it as too high.

Regardless of region, firm age, revenue, location, language, or perceived usefulness of the program, the large majority of executives (at least seven in ten) regarded the following features of the CSBFP as at least moderately reasonable:

• The government shares losses with the lender.
• Only term loans are available.
• CSBFP loans have restricted financing uses.

Satisfaction with Aspects of CSBFP Financing

A number of differences were also apparent in terms of satisfaction with various aspects of their CSBFP loans. These included:

• Executives in Ontario were much less likely than others to express satisfaction with the financing granted, the annual administration fee, and along with those in Atlantic Canada, the securities and guarantees required. Those in Atlantic Canada were more apt than others to be satisfied with the financing granted, availability of program information, the administrative reporting requirements, registration fees, and annual administration fees. The latter four increased as executives were located further east (i.e. increased from west to east).
  
  
• Executives of firms four years of age or older were much more likely than others to be satisfied with the approval time, and other aspects of the application process.
  
  
• Firms with the highest revenues (i.e. $1 million or more) were the most likely to be satisfied with the registration fees and the approval time (the latter increased with revenue size). Meanwhile, satisfaction with the securities and guarantees needed increased the smaller the firm's revenues. Smaller firms were also much more satisfied with the availability of program information.
  
  
• Executives in rural firms were more likely than their urban counterparts to express satisfaction with all aspects of their CSBFP financing.
  
  
• Similarly, French-speaking executives were noticeably more apt to express satisfaction with each aspect of CSBFP financing compared to English speakers.
  
  
• As one might expect, executives that were satisfied with the CSBFP rules and procedures overall were considerably more likely than others to be satisfied with each individual aspect of their CSBFP loan. With the exception of approval times and the annual administration fee, the greater their overall satisfaction, the more likely executives were to be satisfied with each aspect (i.e. those dissatisfied overall were less likely than those neither dissatisfied nor satisfied to express satisfaction with specific aspects).

Overall Satisfaction with CSBFP Rules and Procedures:

Executives who were satisfied overall with the financing options available to them were also much more likely than those not satisfied to express satisfaction with CSBFP rules and procedures.

Perceived Usefulness of CSBFP

Perceptions of the usefulness of the CSBFP tended to vary little across all subgroups. The only differences worth noting were as follows. In terms of regional differences, stronger majorities of executives in the West and in Ontario perceived the CSBF program as useful should they encounter difficulties obtaining financing in the future. Borrowers that were satisfied with the CSBFP rules overall were also more likely to perceive the program to be useful. This was also the case with those satisfied overall with the financing options available to them.

Table 1: CSBFP Borrowers Subgroup Variations (Main)

Table 2: CSBFP Borrowers Subgroup Variations (Program Characteristics)

SME Representatives

Overview

Among the experiential, behavioural, and attitudinal differences evident across the various subgroups, attitudinal differences were the only ones subject to any pattern. Specifically, differences in satisfaction were evident by region, language, location, age of firm, and revenue. Satisfaction with most or all factors related to financing was most likely to be expressed by executives in Quebec, French-speaking executives, executives in rural firms, executives in older firms, and executives in firms with revenues over $1 million. Executives in Quebec, executives in older firms, and French-speaking executives were also much more likely to express satisfaction with the financing options available to them. As well, satisfaction with available financing options increased noticeably with revenue.

Differences in awareness were evident by age of firm, location, language, and, to a lesser extent, revenue. Executives in 'start-up' firms, urban firms, and English-speaking executives were more likely to be aware of federal government loan programs in general and the CSBFP in particular. Awareness of the CSBFP was also somewhat higher among executives in firms with revenues over $1 million, while awareness of government programs in general increased with firm size.

Financing Options Used

In terms of the financing options being used or that have been used, the following sub-group differences were evident:

• Quebec firms were noticeably less likely to use lines of credit, term loans, and credit from suppliers than those in other regions.
• Older firms were more likely to make use of lines of credit, while start-up firms were more likely to use credit cards and term loans.
• The likelihood of using lines of credit increased with revenue.
• Rural firms were more likely than urban ones to use term loans, while urban ones were more likely to use credit cards.
• English executives were more than twice as likely as French executives to report use of lines of credit, credit cards and credit from suppliers.

Applications for Term Loans in Past 12 Months

Executives in the Atlantic region, firms with revenues of $300 000 or more, and executives in rural firms were more likely to report that their firm applied for a term loan during the previous 12 months. Awareness of the CSBFP was not a factor in making these applications³.

Success Obtaining Loan(s)

In terms of success obtaining loan(s), executives from firms in Quebec and the West, from start-up firms, and French-speaking executives were much likely to indicate that their firm received the full amount requested. Executives in firms with revenues of less than $100 000 or $1 million or more were also more likely to indicate this.

Extent to Which Loans Met Needs

The following were much more likely to indicate that the financing received met all of their needs:

• Executives in Quebec and the West
• Executives in older firms
• Executives in firms with revenues of $300 000 or more
• Executives in rural firms
• French-speaking executives.

Overall Awareness of CSBFP and Federal Government Loans Programs

Overall awareness of the CSBFP program (i.e. unaided and aided) was similar in all regions, except Quebec, where it was noticeably lower. Awareness of the program was also higher among executives in start-up firms, and somewhat higher among executives in firms with revenues of $1 million or more, executives in urban firms, and English-speaking executives.

Overall awareness of federal government loan programs in general was highest in the Atlantic region and among executives in start-up firms, urban locations, and among English-speaking executives. Awareness also increased with revenue size.

Source of Information about CSBFP

The following were most likely to have first learned of the CSBFP through a brochure or pamphlet:

• Executives in Quebec
• Executives in older firms
• Executives in rural firms
• French-speaking executives.

The following were most likely to have first learned of the CSBFP through a friend or colleague:

• Executives in start-up firms
• Executives in firms with revenues of $100 000 or less
• Executives in urban firms
• English-speaking executives.

Importance of Financing Factors

While there were sub-group differences regarding the importance attributed to various factors regarding financing, there was no consistent pattern, nor were differences that wide in general. The following differences were evident:

• Executives in start-up firms were more likely to attribute importance to the possibility of negotiating terms and the amount of financing received vs. the amount requested.
  
  
• Executives in firms with revenues of $100 000 or less were least likely to attribute importance to all factors, except the interest rate and the securities/ guarantees needed.
  
  
• Executives in rural firms were somewhat more likely to assign importance to the financing granted vs. the amount requested, the application processing time, and the variety of options available.
  
  
• French-speaking executives were somewhat more likely to assign importance to the application processing time.

Satisfaction with Various Factors of Financing Options

Differences in satisfaction with these same factors did, however, reveal certain patterns. Difference included:

• French-speaking executives were most likely to express satisfaction with all these factors. Those in Quebec were the most apt to be satisfied with the application process time, interest rate, ability to negotiate, the variety of options, the securities/guarantees needed, the service fees, and along with those in Atlantic Canada, the quality of service from their lenders.
  
  
• Executives in older firms were more likely to be satisfied with the application process time, quality of service, and variety of options. Conversely, those with younger firms were more apt to be satisfied with the interest rate, securities required, and the service fees.
  
  
• Executives in firms with revenues of $1 million or more were most likely to be satisfied with the quality of lender service, the interest rate, the ability to negotiate, and the service fees. Moreover, satisfaction with the latter two increased with size of revenue. Those with revenues of less than $100 000 were much less likely than others to be satisfied with the financing granted to them and the processing time.
  
  
• Executives from rural firms were more likely to express satisfaction regarding all factors, except the interest rate. Executives in urban firms were more likely to express satisfaction with the latter.

Satisfaction with Availability of Financing Options

The following were much more likely to express satisfaction with the financing options available to them: executives in Quebec, executives in older firms, executives in rural areas, and French-speaking executives. As well, satisfaction with financing options available increased noticeably with revenue.

Perceptions of CSBFP Features

While there were differences regarding the various features of the CSBFP, there were no consistent patterns:

• The registration fee of 2 percent was regarded as too high by a majority of executives in Ontario and the West, while those in Quebec and the Atlantic region were most likely to regard it as about right. Executives in rural firms and English-speaking executives were also more likely to view the registration fee as too high, while those in urban firms and French-speaking executives were more likely to view it as about right. Finally, executives in firms with revenues over $1 million were most likely to view the registration fee as too high. Those who felt that the CSBFP would be useful were the most likely to see this as about right, while majorities of others felt it was too high.
  
  
• The maximum loan size of $250 000 was most likely to be viewed as about right among French-speaking executives, and least likely among those who did not expect the CSBFP to be useful to them. Executives in firms with revenues over $1 million were most likely to view this as too low.
  
  
• The maximum financing amount of 90 percent was most likely to be viewed as about right by French-speaking executives, and those who thought the program could be useful to their company.
  
  
• The interest rate was most likely to be viewed as too high by executives in Ontario and the West, executives in rural firms, and English-speaking executives. The perception that the interest rate is too high also increased with revenue size.

Regardless of region, firm age, revenue, location, language, or perceived usefulness of the program, the large majority of executives regarded the following features of the CSBFP as at least moderately reasonable: only term loans are available and CSBFP loans have restricted financing uses. The provision according to which the government shares losses with the lender was somewhat more likely to be viewed as at least moderately reasonable by executives in start-up firms. This was also much more likely among those who felt that the program would be useful. Moreover, while majorities in each region considered this to be at least moderately reasonable, a smaller majority in the Atlantic region felt this way.

Perceived Usefulness of CSBFP

The following were most likely to perceive the CSBFP as useful should they encounter difficulties obtaining financing in the future:

• Executives in Ontario
• Executives in firms with revenues over $100 000
• Executives in urban firms
• English-speaking executives.

In addition, the more satisfied executives were with the overall availability of financing options, the more apt they were to perceive the CSBFP to be useful should they need it.

Table 3: SME Subgroup Variations (Main)

Table 4: SME Subgroup Variations (Program Characteristics)

Table 5: CSBFP Borrowers and SME Subgroup Variations (Additional Perceptions of CSBFP)

---

² Not included in tables: 66 percent of those aware and 66 percent of those not aware of CSBFP applied for term loan.

³ Not included in tables: 15 percent of those aware and 16 percent of those not aware of CSBFP applied for term loan.

Tables of Subgroup Variations

Table 1: CSBFP Borrowers Subgroup Variations (Main)

		Region				Firm Age		Firm Revenue				Rural vs. Urban		Language		Satisfaction w/CSBFP rules
	All	West	On.	Que.	Atlc.	Under 4 yrs.	4 yrs. +	<$100K	$100-299K	$300-$999K	$1 million +	Rural	Urban	Eng.	Fr.	Dissat.	Neither	Sat.
	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%
Financing Options Used in Past 5 Years
Term loans	72	72	68	74	73	70	73	72	68	74	67	77	69	71	73	-	-	-
Lines of credit	40	41	39	39	47	38	44	33	41	39	56	46	39	41	37	-	-	-
Credit cards	27	31	30	12	33	25	29	20	27	29	30	26	27	31	12	-	-	-
Credit from suppliers	10	11	11	4	20	9	11	8	10	11	11	13	9	12	4	-	-	-
Applied for TERM LOAN in past 12 months	66	70	65	63	65	64	70	70	65	64	67	77	63	67	64	-	-	-
Success Obtaining Loan(s)
Received full amount requested	81	82	79	84	85	78	87	74	86	81	89	87	80	81	84	-	-	-
Received less than requested	10	12	10	9	6	13	6	18	7	9	2	5	12	10	9	-	-	-
Were turned down	5	3	8	4	6	6	4	6	2	6	6	3	6	5	4	-	-	-
Extent Loan(s) Met Needs
Loan met 100% of needs	43	44	35	51	48	40	47	34	41	52	39	55	39	40	53	-	-	-
Loan met 76-99%	20	22	16	24	16	20	20	19	24	17	20	17	21	19	23	-	-	-
Loan met 50-75%	28	25	36	21	32	30	27	34	28	25	27	22	31	31	19	-	-	-
Less than half of needs	8	9	13	3	3	9	7	11	6	6	14	5	10	10	3	-	-	-
Awareness of CSBFP
Not aware	75	69	69	92	78	68	85	73	72	77	79	79	74	70	93	-	-	-
Prompted awareness of CSBFP	21	25	25	8	22	26	13	22	23	21	16	16	22	25	7	-	-	-
Unprompted awareness of CSBFP	4	6	6			6	2	5	5	3	6	4	4	5		-	-	-
Overall Awareness of CSBFP
No	75	69	69	92	78	68	85	73	72	77	79	79	74	70	93	-	-	-
Yes	25	31	31	8	22	32	15	27	28	23	21	21	26	30	7	-	-	-
Overall Awareness of Federal Gov't. Loan Pgms.
Yes	71	71	75	65	67	70	72	70	79	66	70	67	72	72	64	-	-	-
No	29	29	25	35	33	30	28	30	21	34	30	33	28	28	36	-	-	-
First learned of CSBFP through…
Bank officer	41	47	40	11	45	39	50	27	47	45	47	48	40	43	14	-	-	-
Friend/colleague	22	21	28	11	9	22	21	27	19	21	20	9	25	24		-	-	-
Importance of Financing Factors
Interest rate (4-5)	90	89	87	89	98	91	87	90	91	88	90	92	89	89	89	91	84	89
Lender service quality (4-5)	89	93	85	89	84	86	93	86	87	91	91	93	87	88	89	73	80	92
Financing granted vs. requested (4-5)	88	87	88	87	94	87	90	89	86	87	93	94	87	88	88	91	96	89
Negotiating terms (4-5)	86	82	88	88	92	85	89	84	82	89	91	88	86	86	88	73	91	86
Application process time (4-5)	83	84	85	86	73	85	81	80	82	84	89	79	85	83	87	91	84	82
Variety of options (4-5)	78	75	78	80	86	76	81	77	76	78	84	76	79	78	80	73	76	77
Securities/guarantees needed (4-5)	78	76	81	77	82	81	74	84	74	81	71	74	80	79	77	73	80	79
Service fees (4-5)	75	73	73	77	84	75	75	76	78	73	73	77	75	75	77	18	87	65
Satisfaction with Financing Factors
Financing granted vs. requested (4-5)	75	77	68	84	74	72	79	69	80	77	71	82	73	73	84	-	-	-
Lender service quality (4-5)	73	83	65	76	61	69	80	64	80	75	73	84	69	72	78	-	-	-
Application process time (4-5)	55	54	59	61	32	52	60	48	48	63	62	66	51	54	61	-	-	-
Securities/guarantees needed (4-5)	48	51	46	46	48	51	44	56	48	48	36	54	46	48	47	-	-	-
Variety of options (4-5)	42	40	38	54	39	39	47	38	39	46	44	45	41	39	53	-	-	-
Interest rate (4-5)	42	47	38	43	39	42	43	43	37	47	40	48	40	43	42	-	-	-
Negotiating terms (4-5)	41	36	43	52	32	37	48	44	40	40	40	47	39	39	52	-	-	-
Service fees (4-5)	39	39	38	39	42	38	40	42	32	41	42	37	40	39	39	-	-	-
Satisfaction with available financing options overall (4-5)	54	57	52	60	45	51	60	51	57	54	60	60	53	54	59	-	-	-
Satisfaction with CSBFP Financing Aspects
Financing granted vs. requested (4-5)	75	77	70	78	85	74	77	80	73	74	78	86	72	75	77	45	53	87
Other aspects of application process (4-5)	65	65	58	75	69	61	70	64	63	66	67	75	61	62	74	9	47	76
Approval time (4-5)	62	65	58	69	46	56	70	55	61	62	74	75	57	60	69	36	40	73
Securities/guarantees needed (4-5)	58	61	53	61	54	58	57	66	59	55	48	61	56	57	60	18	36	70
Availability of program info (4-5)	55	45	50	72	85	57	53	61	61	47	52	61	53	51	71	18	42	64
Administrative reporting requirements (4-5)	55	50	52	64	69	56	53	57	55	53	56	59	53	53	63	18	29	69
Registration fees (4-5)	38	34	36	42	54	38	37	34	39	36	44	43	36	36	43	9	29	43
Annual administration fee (4-5)	31	34	25	33	38	32	29	34	33	25	33	41	27	30	34	27	16	37
CSBFP would be useful to firm if needed (4-5)	79	80	82	76	73	78	81	80	80	77	80	79	79	79	78	82	80	87

Back to reference 1

Table 2: CSBFP Borrowers Subgroup Variations (Program Characteristics)

		Region				Firm Age		Firm Revenue				Rural vs. Urban		Language		Perceived Usefulness of CSBFP
	All	West	On.	Que.	Atlc.	Under 4 yrs.	4 yrs. +	<$100K	$100-299K	$300-$999K	$1 million +	Rural	Urban	Eng.	Fr.	Not	Somewhat	Useful
	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%
Interest rate capped at prime plus 3%.
Too high	59	58	68	46	61	59	59	63	63	53	60	55	60	63	45	71	64	58
About right	40	42	31	49	37	40	39	36	35	44	39	42	38	37	49	26	34	41
Too low	0				2		1			1		1		0		0	0	0
Registration fee is 2% of total loan amount
Too high	56	57	64	48	45	56	56	53	58	54	64	54	57	59	46	61	66	55
About right	42	42	33	50	51	42	42	44	40	43	36	45	41	39	51	35	33	44
Too low	1	1	2		2	1	1	2		1		1	1	1		0	2	1
Maximum financing is 90% of eligible project/equipment cost.
Too high	5	5	10	1		5	5	7	5	4	3	4	5	6	1	3	8	5
About right	83	86	75	87	88	83	82	78	85	83	87	87	82	82	88	90	70	85
Too low	11	9	13	9	12	10	11	13	8	11	10	8	11	11	9	3	21	10
Maximum loan size is $250,000.
Too high	4	5	5	5		5	3	4	8	3		5	4	4	5	10	8	4
About right	67	64	64	72	71	65	68	71	73	62	56	73	64	65	71	68	59	68
Too low	28	30	30	23	29	28	28	24	18	33	44	21	31	30	23	23	33	28
If default on a loan, GoC responsible for 85% of eligible losses
Not at all reasonable	6	6	6	6	2	5	7	5	8	6	3	8	5	5	7	13	10	4
Not very reasonable	11	14	8	12	6	10	12	9	13	11	7	11	11	11	12	16	8	11
Somewhat reasonable	34	32	32	35	42	32	37	33	38	31	36	36	33	34	34	29	38	34
Very reasonable	48	46	51	43	50	51	42	52	40	49	52	43	49	49	44	42	39	50
Restricted to equipment, real property or immovables, leasehold improvements, and program registration fees
Not at all reasonable	3	2	4	5	4	4	2	3	4	3	4	2	4	3	4	10	5	3
Not very reasonable	12	8	12	16	10	12	12	17	12	10	7	13	11	11	15	29	15	10
Somewhat reasonable	41	39	41	41	48	39	44	38	45	39	42	37	42	41	40	26	41	43
Very reasonable	41	49	39	36	35	41	41	40	38	43	45	45	40	42	38	32	34	42
Only term loans are available.
Not at all reasonable	3	1	5	3	4	4	2	5	3	3		3	3	3	3	10	3	3
Not very reasonable	11	7	11	15	15	11	11	8	8	14	12	6	12	10	15	6	15	11
Somewhat reasonable	52	57	49	53	50	53	52	52	52	51	61	54	52	53	51	52	61	52
Very reasonable	30	32	31	26	31	29	32	34	32	27	28	34	29	31	28	29	18	32

Back to reference 2

Table 3: SME Subgroup Variations (Main)

		Region				Firm Age		Firm Revenue				Rural vs. Urban		Language
	All	West	On.	Que.	Atlc.	Under 4 yrs.	4 yrs. +	<$100K	$100-299K	$300-$999K	$1 million +	Rural	Urban	Eng.	Fr.
	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%
Financing Options Used in Past 5 Years
Lines of credit	43	45	47	32	40	33	45	30	43	47	49	37	39	44	35
Term loans	29	35	29	16	31	32	27	20	30	29	34	38	28	30	17
Credit cards	24	32	29	8	17	28	23	23	22	28	22	17	31	27	9
Applied for TERM LOAN in past 12 months	16	16	15	14	23	17	16	10	13	20	20	28	14	16	15
Success Obtaining Loan(s)
Received full amount	58	75	43	75	42	71	56	64	53	58	65	59	55	55	77
Received less than requested	4	4		6	8		5		11	3			5	3	8
Were turned down	28	13	50	13	25	18	30	18	32	33	18	24	41	31	8
Extent Loan(s) Met Needs
100% of your needs	45	55	25	62	33	31	51	43	23	57	54	62	31	42	64
76-99%	23	20	50	8	11	38	17	14	31	19	23	23	38	26	9
50-75%	19	10	17	15	44	15	20	14	23	19	15	15	15	19	18
Less than half of needs	11	10	8	15	11	15	10	14	23	5	8		15	12	9
Awareness of CSBFP
Not aware	81	79	78	88	81	77	82	85	81	82	73	90	73	79	90
Prompted awareness	19	21	22	11	19	23	18	15	18	18	27	10	26	21	10
Unprompted awareness	0			1			0		1				1	0
Overall Awareness of CSBFP
No	81	79	78	88	81	77	82	85	81	82	73	90	73	79	90
Yes	19	21	22	12	19	23	18	15	19	18	27	10	27	21	10
Overall Awareness of Federal Gov't. Loan Pgms.
No	71	75	70	77	60	68	73	75	73	71	69	80	68	71	79
Yes	29	25	30	23	40	32	27	25	27	29	31	20	32	29	21
First learned of CSBFP through…
Brochure/pamphlet	26	25	24	31	20	17	27	25	46	14	13	33	12	24	33
Friend/colleague	24	28	32	15	10	30	25	38	18	28	26	17	38	28	11
Importance of Financing Factors
Interest rate (4-5)	85	86	84	86	79	84	85	83	87	85	81	87	84	84	87
Negotiating terms (4-5)	80	80	81	80	77	84	79	74	84	80	81	80	79	81	78
Lender service quality (4-5)	78	79	79	77	73	78	78	70	84	79	76	82	80	79	75
Financing granted vs. requested (4-5)	78	78	76	79	75	81	76	72	77	79	81	85	76	78	75
Service fees (4-5)	75	78	74	75	67	77	74	70	79	73	76	75	77	75	72
Application process time (4-5)	71	72	66	80	67	68	71	67	72	72	71	77	69	69	79
Securities/guarantees needed (4-5)	70	70	68	71	62	72	68	68	66	67	77	72	74	68	70
Variety of options (4-5)	67	68	67	69	52	65	67	59	74	64	65	78	67	66	65
Satisfaction with Financing Factors
Financing granted vs. requested (4-5)	57	58	56	56	55	58	57	47	60	57	59	69	48	56	62
Application process time (4-5)	53	50	49	69	45	48	54	44	56	52	56	62	52	49	74
Lender service quality (4-5)	52	46	53	59	60	43	54	50	50	51	63	59	52	50	65
Interest rate (4-5)	39	38	40	44	35	45	38	35	40	36	50	34	44	37	50
Negotiating terms (4-5)	36	28	37	46	40	35	36	26	37	37	41	38	34	34	47
Variety of options (4-5)	31	29	26	44	35	28	32	29	29	33	31	34	28	27	50
Securities/guarantees needed (4-5)	31	25	29	46	25	38	29	29	34	32	22	41	30	28	44
Service fees (4-5)	29	29	27	36	20	35	27	21	26	29	41	28	25	26	41
Satisfaction with available financing options overall (4-5)	44	40	44	56	40	40	46	41	43	43	56	66	36	42	59
CSBFP would be useful to firm if needed (4-5)	62	58	68	58	60	65	61	50	66	64	64	58	64	63	57

Back to reference 3

Table 4: SME Subgroup Variations (Program Characteristics)

		Region				Firm Age		Firm Revenue				Rural vs. Urban		Language		Perceived Usefulness of CSBFP
	All	West	On.	Que.	Atlc.	Under 4 yrs.	4 yrs. +	<$100K	$100-299K	$300-$999K	$1 million +	Rural	Urban	Eng.	Fr.	Not	Somewhat	Useful
	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%	%
Interest rate capped at prime plus 3%.
Too high	62	70	67	50	50	62	62	55	60	63	72	72	62	66	46	61	68	61
About right	35	28	30	43	48	35	34	43	36	32	27	25	36	31	48	37	29	36
Too low	1		1	3		1	1		1	1				0	2	0	2	1
Registration fee is 2% of total loan amount
Too high	53	58	58	38	48	51	53	50	44	53	70	67	54	56	38	61	58	49
About right	42	34	39	56	48	44	42	43	52	42	26	30	43	40	54	35	38	46
Too low	2	3	2	3	4	1	3	2	2	3	2	2	1	2	3	2	2	3
Maximum financing is 90% of eligible project/equipment cost.
Too high	11	11	12	6	15	12	11	11	11	12	8	7	11	12	6	13	11	10
About right	80	80	78	80	79	81	79	79	81	75	83	83	81	78	83	76	77	83
Too low	6	5	6	9	4	6	6	6	5	7	7	8	7	6	6	9	7	5
Maximum loan size is $250,000.
Too high	8	6	7	13	12	8	8	14	9	6	3	12	6	7	13	13	8	7
About right	69	67	65	74	71	66	68	73	74	68	51	65	68	67	74	61	67	71
Too low	19	23	23	11	15	23	19	8	13	21	43	23	22	22	9	22	21	19
If default on a loan, GoC responsible for 85% of eligible losses
Not at all reasonable	12	13	8	13	21	7	13	17	10	12	8	20	9	12	12	15	17	9
Not very reasonable	20	19	21	21	15	9	22	22	17	21	20	12	19	20	19	23	23	19
Somewhat reasonable	27	30	27	25	23	33	26	20	30	27	30	25	33	27	25	19	25	29
Very reasonable	39	36	41	39	35	49	36	37	40	37	41	42	36	38	42	43	32	42
Only term loans are available.
Not at all reasonable	5	4	5	4	8	4	5	7	4	4	5	7	5	5	4	9	5	4
Not very reasonable	11	10	11	14	8	13	11	14	9	13	9	13	12	11	15	15	16	10
Somewhat reasonable	49	52	45	51	56	42	51	49	51	49	48	45	50	49	54	40	60	47
Very reasonable	32	33	35	27	25	38	30	28	33	30	36	33	31	33	24	34	17	37
Restricted to equipment, real property or immovables, leasehold improvements, and program registration fees
Not at all reasonable	4	3	4	5	10	7	4	7	3	4	5	5	5	4	4	13	5	3
Not very reasonable	11	9	12	13	8	13	10	12	11	9	12	7	10	10	12	19	17	7
Somewhat reasonable	42	39	46	41	44	37	44	40	49	43	33	43	42	43	40	34	48	44
Very reasonable	40	48	35	37	35	41	39	37	33	41	50	45	41	40	38	30	29	46

Back to reference 4

Table 5: CSBFP Borrowers and SME Subgroup Variations (Additional Perceptions of CSBFP)

		Overall Satisfaction with Available Financing Options (Borrowers)				Overall Satisfaction with Available Financing Options (SMEs)
	All (Borrowers)	Dissatisfied	Neither	Satisfied	All (SMEs)	Dissatisfied	Neither	Satisfied
	%	%	%	%	%	%	%	%
Perceived Usefulness of CSBFP
Not useful	6	13	6	3	11	8	9	10
Somewhat useful	12	13	17	6	23	29	27	15
Useful	79	70	76	88	62	59	64	71
Satisfaction with CSBFP Rules & Procedures
Dissatisfied	6	23	4	3	-	-	-	-
Neither	25	31	39	18	-	-	-	-
Satisfied	67	46	57	77	-	-	-	-

Back to reference 5

Regression Analysis

Predicting the Drivers of Satisfaction with Financing Options Available

In order to add texture to the survey results, multivariate analysis was undertaken with selected findings from the survey. The main purpose of the regression analysis is to help determine the drivers of overall satisfaction with the financing options available to SMEs. Consequently, the dependent variable chosen for this analysis was question 42 (Overall, how satisfied were you with the financing options available?). Separate analyses were undertaken for each survey population: CSBFP borrower firms and SME participants.

A set of independent variables was tested for this dependent variable using a stepwise technique that allows statistically significant predictors to enter the model based on their predictive power. Regression models included questions 34 to 41 (satisfaction with the range of financing options available). The questions used in the model are included at the end of this section. The results of regression analysis are described below.

MODEL 1: Results of Regression Analysis for SMEs

The set of independent variables explained 68 percent of the variance observed in the dependant variable. This is a highly acceptable regression “fit”.

The regression analysis suggests that, while controlling for the effect of all independent variables entered into model, the following items are statistically significant predictors of overall satisfaction with financing options available:

• The quality of service received from lender(s).
• The possibility of negotiating the terms of financing, such as service fees and repayment conditions.
• Access to a variety of financing options.
• The amount of financing granted compared to the amount requested.
• The securities and guarantees required by financial institutions, whether personal or corporate.

This regression model suggests that, among five statistically significant predictors, the first two predictors account for 60 percent of the variance in the dependent variable. For SMEs, the quality of service received from the lender(s) is, by far, the strongest driver of overall satisfaction. The possibility of negotiating the terms of financing is the second most powerful predictor of overall satisfaction with the financing options available. Still statistically significant, although to a lesser degree, are the other independent measures.

MODEL 2: Results of Regression Analysis for CSBFP Borrowers

The results of the regression analysis for this audience suggest a smaller, although still acceptable, “fitness” of the model at 60 percent variance in the dependent variable explained by independent variables. While controlling for the effect of all independent variables entered in the model, five measures were found to be significant predictors of overall satisfaction with financing options available. These include:

• Access to a variety of financing options.
• The service fees.
• The quality of service received from lender(s).
• The amount of financing granted compared to the amount requested.
• The possibility of negotiating the terms of financing, such as service fees and repayment conditions.

This regression model suggests that, among the five statistically significant predictors listed, the first three predictors account for 57 percent of the variance in overall satisfaction. For CSBFP borrowers, access to a variety of financing options is, by far, the strongest driver of overall satisfaction. The service fees and the quality of service received from the lender(s) are other two most powerful predictors of overall satisfaction with the financing options available. The other independent measures also predict the satisfaction with financing options available, although to a lesser degree.

Summary

Regression models for both SME and CSBFP borrower firms show that independent measures are reliable and stable predictors of overall satisfaction with the financing options available. The regression model for the SMEs explains over two-thirds of the variance in overall satisfaction, while the model for CSBFP borrowers explains 60 percent of the variance in overall satisfaction with the financing options available. The quality of service received from lenders and access to a variety of financing options were among the three most powerful predictors for both audiences.

Questions Included in Regression Analyses

The following questions were included in the regression analysis of overall satisfaction with financing options available.

Dependent variable:

Q42: Overall, how satisfied were you with the financing options available?

Independent variables:

Q34: The interest rate.

Q35: The service fees.

Q36: The time required to process applications.

Q37: Access to a variety of financing options.

Q38: The possibility of negotiating the terms of financing, such as service fees and repayment conditions.

Q39: The amount of financing granted compared to the amount requested.

Q40: The securities and guarantees required by financial institutions, whether personal or corporate.

Q41: The quality of service you receive from your lender(s).

Appendices

Canada Small Business Financing Program (CSBFP)
Awareness and Satisfaction Survey

Introduction

Hello, my name is . I'm calling on behalf of Phoenix, a public opinion research company. We've been commissioned by Industry Canada, a department of the Government of Canada, to conduct a survey among business owners and managers. The purpose is to explore financing issues facing small and medium-sized businesses in Canada. The findings will help Industry Canada design programs that address the financing needs of small and medium-sized businesses like yours.

Your participation in this survey is voluntary, but would be extremely helpful. All responses will be kept entirely confidential. No individuals or businesses will be identified in any way to Industry Canada. The survey takes only 15 minutes to complete, and is registered with the national survey registration system.

IF RESPONDENT SAYS THE FIRM DOES NOT USE FINANCING, SAY: We are interested in the views of businesses whether or not they have recently tried to obtain financing.

Would you be willing to take part in this survey? We can do it now or at a time more convenient for you.

 Yes, now. (CONTINUE)
     – ASK SCREENER 'A' IF NON-CSBFP SAMPLE
     – SKIP TO Q1 IF CSBFP SAMPLE
 Yes, call later. (SPECIFY DATE/TIME)
 Refused. (THANK & DISCONTINUE)

ASK NON-CSBFP SAMPLE ONLY:

A. Before we start, we are conducting this survey with businesses with annual revenues of $5 million or less. In 2006, did your business have annual revenues of $5 million or less, before taxes and deductions?

Yes
No (THANK & DISCONTINUE)

INTERVIEWER NOTES:

PARTICIPANTS MUST BE THE OWNER, CEO, PRESIDENT OR SENIOR MANAGER/EXECUTIVE IN THE FINANCIAL AREA. ASK FOR APPROPRIATE REFERRAL IF RESPONDENT DOES NOT FIT CRITERIA OR DISCONTINUE INTERVIEW.

IF RESPONDENT SAYS THERE IS SOMEONE MORE APPROPRIATE TO RESPOND TO THE SURVEY ON BEHALF OF HIS/HER COMPANY AT ANY POINT DURING THE INTERVIEW, ASK TO BE REFERRED TO THIS NEW PERSON (AND OBTAIN PHONE NUMBER). RE-START SURVEY.

IF RESPONDENT QUESTIONS THE VALIDITY OF THE RESEARCH, INVITE HIM/HER TO:

• CALL THE NATIONAL SURVEY REGISTRATION SYSTEM, OR
• LAURA MORIN OF INDUSTRY CANADA 1-613-954-5486 OR HAVE CAROLINE CALL THE RESPONDENT.

IF RESPONDENT ASKS ABOUT NATIONAL SURVEY REGISTRATION SYSTEM, SAY:

The registration system has been created by the survey research industry to allow the public to verify that a survey is legitimate, get information about the survey industry or register a complaint. The registration system's toll-free phone number is 1-800-554-9996.

PARTICIPANTS' COMMENTS WILL BE PROTECTED IN ACCORDANCE WITH THE PROVISIONS OF THE PRIVACY ACT. INDICATE THIS IF RELEVANT. ALSO SAY IF RELEVANT: "YOUR REPONSES TO THIS SURVEY WILL HAVE NO IMPACT ON YOUR DEALINGS WITH INDUSTRY CANADA OR THE FEDERAL GOVERNMENT"

THE TERM 'BUSINESS' IS USED INSTEAD OF 'COMPANY' IN MOST OF THE SURVEY SINCE THIS TERM APPLIES BETTER FOR VERY SMALL BUSINESSES. HOWEVER, THE INTENT IS THE SAME – BY 'BUSINESS' WE MEAN 'COMPANY'.

HEADINGS IN BLUE SHOULD NOT BE READ TO RESPONDENTS.

SCALE INSTRUCTIONS: RESPONSE CATEGORIES/INSTRUCTIONS FOR SOME OF THE SCALE QUESTIONS ARE REPETITIVE. ADJUST THE FREQUENCY OF REPEATING THE INSTRUCTIONS TO ENSURE CLARITY BUT AVOID TEDIUM.

ALL QUESTIONS IN THE SURVEY WILL ALLOW FOR 'DON'T KNOW/NO RESPONSE' OPTION.

IF RESPONDENT WANTS TO KNOW MORE ABOUT THE PROGRAM, OFFER LAURA MORIN'S PHONE NUMBER (1-613-954-5486) AT THE END OF THE INTERVIEW AND INVITE HIM/HER TO CALL LAURA.

Section 1: Corporate Characteristics

I'd like to start with a few questions about your business.

2. How many employees work for your business, including yourself? By this, we mean both full-time and part-time staff. Please include part-time staff as the number of full-time equivalents. (READ LIST IF HELPFUL) (NOTE: DOES NOT INCLUDE CONTRACT STAFF OR OUTSOURCED WORK) (INCLUDES ALL LOCATIONS IN CANADA)

 One
 2-4
 5-20
 21-50
 51-100
 101-150
 151-200
 More than 200

3. Approximately how many years has your company or business been in operation? (READ LIST) (WATCH SAMPLE QUOTAS)

 Less than one year    CODE AS 'START-UP BUSINESS'
 1-3 years                  CODE AS 'START-UP BUSINESS'
 4-5 years
 6-10 years
 11-20 years
 21-50 years
 Over 50 years

4. For 2006, what were your business' total revenues? Please include business revenue from all sources, before taxes and deductions. Were your revenues...? (READ LIST; WANT ESTIMATE, NOT EXACT AMOUNT. REMIND RESPONDENT OF CONFIDENTIALITY OF RESPONSE IF NECESSARY)

 Under $100 000
 $100 000 - $300 000
 $300 001 - $500 000
 $500 001 - $1 million
 $1 000 001 - $5 million

5. In which industry or sector does your business operate? If you are active in more than one sector, please identify the main sector. (DO NOT READ LIST; ACCEPT ONE RESPONSE)

 Accommodation Services
 Administrative and Support, Waste Management, Remediation Services
 Agriculture/Fishing/Hunting/Forestry
 Art, Entertainment, Recreation
 Construction
 Educational Services
 Finance & Insurance
 Food Services & Drinking Places
 Health Care & Social Assistance
 Information and Cultural Industries
 Manufacturing
 Mining/Oil/Gas
 Other Services
 Professional, Scientific and Technical Services
 Real Estate and Rental/Leasing
 Retail Trade
 Transportation and Warehousing
 Utilities
 Wholesale Trade
 Other (specify)

Section 2: Financial Dealings

The following questions ask about your business' financial dealings, such as what banks you use, what types of financing options, whether you have tried to obtain a loan, and other relevant issues. We are only looking for information on a general level, and will not ask for any detailed information about your business' financial affairs. (IF HELPFUL, REMIND RESPONDENT ABOUT CONFIDENTIALITY OF RESPONSES)

6. Does your business use more than one financial institution for your banking and other financial arrangements?

 Yes
 No

7. Which financial institution does your business use most often for your banking? If more than one financial institution, ask: What other financial institutions does your business use? (DO NOT READ LIST; RECORD FIRST MENTION, ACCEPT MULTIPLE RESPONSES) (IF HELPFUL, REMIND RESPONDENT ABOUT CONFIDENTIALITY OF RESPONSES; DO NOT PUSH. ACCEPT DON'T KNOW/REFUSE IF RESPONDENT DOES NOT WANT TO PROVIDE THIS INFORMATION)

 Royal Bank of Canada/RBC
 Toronto Dominion-Canada Trust/TD-Canada Trust
 Bank of Nova Scotia/BNS/Scotiabank
 Bank of Montreal
 Canadian Imperial Bank of Commerce/CIBC
 National Bank
 Caisses populaires
 Credit unions
 Other (specify)
 Don't know/refuse

8. During the past five years*, what financing options have been or are being used by your business? How about... [DO NOT READ LIST. ACCEPT ALL RESPONSES] (*CHANGE TO LESS THAN 5 YEARS IF FIRM IS YOUNGER THAN THIS)

 Term loans
 Credit cards for larger purchases, such as equipment
 Capital leasing for equipment [DEFINE IF NEEDED – SEE BELOW]
 Operational leases [DEFINE IF NEEDED – SEE BELOW]
 Lines of credit
 Venture capital
 Government grants (includes all levels of government)
 Credit from suppliers
 Equity financing
 Other (specify)
 None, business has not attempted to obtain external financing*

*GO TO SECTION 3.

INTERVIEWER NOTE:

Capital leasing for equipment is the financing of equipment and vehicles by way of a lease. The equipment and vehicles secure the borrower's obligation to make payments over the term of the agreement. The lease provides for the transfer of ownership to the lessee at the end of the lease term.

Operational leases refer to a lease in which the lessor transfers only the right to use the property to the lessee. Since the lessee does not assume the risk of ownership, the lease expense is treated as an operating expense.

9. In the past 12 months, did your business apply for a term loan from a financial institution? Please include all loan applications, whether or not you received the loan.

 Yes
 No                 [GO TO SECTION 3]
 Don't know     [GO TO SECTION 3]

INTERVIEWER NOTE:

'TERM LOAN' DOES NOT INCLUDE LINES OF CREDIT OR WORKING CAPITAL, BUT DOES INCLUDE LOANS USED TO PURCHASE THINGS LIKE LAND, BUILDINGS, EQUIPMENT OR FURNITURE. THIS INCLUDES BUSINESSES THAT RECEIVED OR WERE TURNED DOWN FOR A LOAN.

'TERM LOAN' DOES INCLUDE MORTGAGES RELATED TO A RESPONDENT'S BUSINESS.

10. How often did your business apply for a loan during the past 12 months? (READ LIST IF HELPFUL)

 Once
 Twice
 3 times
 4 times
 Over 4 times

11. Did your business succeed in obtaining the loan(s), either in full or in part, or were you turned down? Did you... [READ FULL LIST; ACCEPT ALL THAT APPLY]

 Receive the loan(s) for the full amount requested
 Receive the loan(s), but for less than the amount requested, or
 Were you turned down for the loan(s)?  [GO TO Q15]

 Volunteered: Received some loans, but turned down for others
 Volunteered: Not sure/Can't recall        [GO TO SECTION 3]

12. To what extent did the loan(s) meet your financing needs? In percentage terms, would you say it met... (READ LIST; ACCEPT ONE RESPONSE)

 Less than half of your needs
 50-75 percent
 76-99 percent
 100 percent of your needs

13. Was your loan(s) covered by a program offered by the federal government that provides a guarantee on loans to small business?

 Yes
 No                              [SKIP NEXT QUESTION]
 Not sure /Can't recall    [SKIP NEXT QUESTION]

*GO TO SECTION 3 UNLESS RESPONDENT VOLUNTEERED AT Q11 THAT THEY RECEIVED SOME LOANS, BUT NOT OTHERS. IF THE LATTER, GO TO Q15.

IF YES, ASK:

14. Do you remember the name of the program? If so, what is it? (DO NOT READ LIST)

 No/ Can't recall
 Small Business Loans Act (SBLA)
 Canada Small Business Financing Program (CSBFP)
 Business Improvement Loan (BIL)
 Farm Improvement and Marketing Co-operatives Loans Act (FIMCLA)
 Other (specify)

INTERVIEWER NOTE:

NOVA SCOTIA HAS A PROGRAM CALLED 'THE SMALL BUSINESS FINANCING PROGRAM'. THIS IS NOT THE SAME AS THE CANADA SMALL BUSINESS FINANCING PROGRAM (CSBFP). WHEN CONDUCTING INTERVIEWS IN NOVA SCOTIA (OR EVEN ELSEWHERE IN ATLANTIC CANADA), PLEASE BE AWARE OF THIS AND DO NOT CODE 'THE SMALL BUSINESS FINANCING PROGRAM' AS THE CANADA SMALL BUSINESS FINANCING PROGRAM. PROBE AS NECESSARY TO CONFIRM WHETHER THE RESPONDENT IS INCORRECTLY IDENTIFYING A PROVINCIAL PROGRAM. IF SO, BACK UP ONE SCREEN AND RE-INPUT ANSWER SAYING 'NO' TO AWARENESS OF FEDERAL GOVERNMENT LOAN PROGRAM.

ASK IF BUSINESS TURNED DOWN FOR LOAN:

15. Did the financial institution that turned down your application for a loan bring to your attention any programs offered by the federal government that provide a guarantee on loans to small business?

 Yes
 No                             [GO TO SECTION 3]
 Not sure/Can't recall    [GO TO SECTION 3]

IF YES, ASK:

16. Do you remember the name of the program? If so, what is it? (DO NOT READ LIST)

 No/ Can't recall
 Small Business Loans Act (SBLA)
 Canada Small Business Financing Program (CSBFP)
 Business Improvement Loan (BIL)
 Farm Improvement and Marketing Co-operatives Loans Act (FIMCLA)
 Other (specify)

INTERVIEWER NOTE: SEE NOVA SCOTIA FOR Q14.

Section 3: Awareness & Use of the CSBFP

SKIP NEXT QUESTION IF RESPONDENT AWARE OF FEDERAL PROGRAM AT Q14 & 16.

17. Are you aware of any programs of the federal government that guarantee the loans of small businesses and share the risk with the financial institution?

 Yes
 No        [SKIP NEXT QUESTION]

IF YES, ASK:

18. Do you remember the name of any such programs? If so, what is it? (DO NOT READ LIST)

 No/Can't recall
 Small Business Loans Act (SBLA)
 Canada Small Business Financing Program (CSBFP)*
 Business Improvement Loan (BIL)
 Farm Improvement and Marketing Co-operatives Loans Act (FIMCLA)
 Other (specify)

INTERVIEWER NOTE: SEE NOVA SCOTIA FOR Q14.

ASK IF 'NO' AT Q17 OR RESPONDENT ANSWERED 'YES' AT Q13, 15, OR 17 BUT DID NOT IDENTIFY 'CSBFP' AT FOLLOW-UP QUESTION:

19. Have you ever heard about the Canada Small Business Financing Program, also known as CSBFP (C-S-B-F-P)?

 Yes                            [CONTINUE]
 No                              [SKIP TO Q23]
 Not sure/Can't recall    [SKIP TO Q23]

IF YES, ASK:

20. What do you know about the Canada Small Business Financing Program? (DO NOT READ LIST; RECORD FIRST MENTION; ACCEPT TWO RESPONSES)

 Government program to help small business get financing
 Losses shared by government
 Maximum financing amount
 There are program registration fees
 Loans are restricted to financing for certain kinds of assets
 Too expensive
 Bank discourages use
 Nothing
 Other (specify)

21. How did you first learn about the Canada Small Business Financing Program? (DO NOT READ LIST; ACCEPT ONE RESPONSE)

 Friend/colleague
 Bank officer
 Business service provider (e.g. accountant, financial advisor)
 Brochure/pamphlet
 Bank/other private sector website
 Federal government website
 CSBFP website
 Previously obtained CSBFP Loan
 Canada Business Network/CBN*
 Other (specify)
 Not sure/Can't recall

INTERVIEWER NOTE: CANADA BUSINESS NETWORK IS ALSO KNOWN BY FOLLOWING NAMES:

Canada Ontario Business service centre
Manitoba Business service centre
Saskatchewan Business service centre
Alberta – The Business Link or The Business Link Business service centre
British Columbia service centre or Small Business BC
Newfoundland and Labrador Business service centre
Nova Scotia Business service centre
New Brunswick Business service centre
Prince Edward Island Business service centre
Québec service centre or Info entrepreneurs / Ressources Entreprises (ville de Québec)
Yukon Business service centre
Nunavut Business service centre
Northwest Territories Business service centre

22. When seeking financing, did you ask about the Canada Small Business Financing Program or did the lender identify the program to you for your consideration? DO NOT READ LIST; ACCEPT ONE RESPONSE

 Asked about the CSBFP
 Lender identified the CSBFP
 Neither
 Not sure/Can't recall

ASK EVERYONE EXCEPT THOSE WHO HAVE NOT OBTAINED FINANCING:

23. Has your business ever obtained a loan covered by a government program, either federal or provincial, that guarantees the loans of small businesses and shares the risk with the financial institution? IF YES, ASK: Was the program offered by the federal or provincial government? INTERVIEWER NOTE: THIS INCLUDES ANY TIME IN THE HISTORY OF THE BUSINESS.

 No
 Yes, federal
 Yes, provincial
 Yes, but unsure about program sponsor
 Yes, both
 Not sure/Can't recall

24. Has your business ever decided NOT to use a government-guaranteed loan program? This could be under a program operated by either the federal or provincial level of government. IF YES, ASK: Do you recall which level of government?

 No
 Yes, federal
 Yes, provincial
 Yes, but unsure about program sponsor
 Yes, both
 Not sure/Can't recall

IF YES, ASK:

25. Why is that? (DO NOT READ LIST; ACCEPT ONE RESPONSE)

 Too expensive
 Too much administration, paper burden
 From the advice of a banker or lender
 Lender offered "umbrella credit"*
 Not necessary/financial
 Other (specify)
 Not sure/can't recall

INTERVIEWER NOTE: THIS MEANS THAT BUSINESSES CAN ACCESS SEVERAL DIFFERENT FINANCING VEHICLES AT THE SAME TIME.

Section 4: Satisfaction with Financing

ASK EVERYONE:

How important are each of the following factors to your business when it comes to obtaining financing or considering financing options? Please rate each of the following using a 5-point scale, where '1' means not important at all, and '5' means very important. [READ/ROTATE LIST] (RECORD 'DOES NOT APPLY' AND 'DON'T KNOW' SEPARATELY)

26. The interest rate.
27. The service fees.
28. The time required to process applications.
29. Access to a variety of financing options.
30. The possibility of negotiating the terms of financing, such as service fees and repayment conditions.
31. The amount of financing granted compared to the amount requested.
32. The securities and guarantees required by financial institutions, whether personal or corporate.
33. The quality of service you receive from your lender(s).

IF RESPONDENT HAS NEVER OBTAINED FINANCING, SKIP QUESTIONS 34-42.

Thinking about the past five years* and any times that your business may have applied for or obtained financing, please tell me the extent to which you were satisfied with each of these same factors in terms of the financing options available. To do this, please use a 5-point scale, where '1' means very dissatisfied, and '5' means very satisfied. If you have applied for or received financing on multiple occasions, please think about your experience overall during the past five years. As well, if something does not apply to your situation, please just say so. [READ/ROTATE LIST] (RECORD 'DOES NOT APPLY' AND 'DON'T KNOW' SEPARATELY)

34. The interest rate.
35. The service fees.
36. The time required to process applications.
37. Access to a variety of financing options.
38. The possibility of negotiating the terms of financing, such as service fees and repayment conditions.
39. The amount of financing granted compared to the amount requested.
40. The securities and guarantees required by financial institutions, whether personal or corporate.
41. The quality of service you receive from your lender(s).
*CHANGE TO LESS THAN 5 YEARS IF FIRM IS YOUNGER THAN THIS.

42. Overall, how satisfied were you with the financing options available? Please use a 5-point scale, where '1' means very dissatisfied and '5' means very satisfied.

ASK THOSE WHO ACKNOWLEDGED RECEIVING CSBFP LOAN:

Thinking specifically about the CSBFP loan(s) your business received in the past 12 months, I'd like you to tell me how satisfied you were with each of the following aspects of the loan. Please use a 5-point scale, where '1' means very dissatisfied, and '5' means 'very satisfied'. If something does not apply to your situation, please just say so. [READ/ROTATE LIST; QS 46/47 MUST BE ROTATED TOGETHER, WITH Q46 ALWAYS PRECEDING Q47] (RECORD 'DOES NOT APPLY' AND 'DON'T KNOW' SEPARATELY)

43. The availability of information on the CSBF Program.
44. Your administrative reporting requirements related to the 'life' of the loan.
45. The time needed to obtain approval.
46. Other aspects of the application process.
47. The program registration fees.
48. The annual administration fee.
49. The securities and guarantees that are required.
50. The amount of financing granted compared to the amount requested.

ASK EVERYONE WHO RECEIVED LOAN IN PAST 12 MONTHS:

51. You mentioned that you received a term loan during the past 12 months. How likely is it that your business will use the same lender for other sources of financing in the future? Would you say it is...?

 Very likely
 Moderately likely
 Not very likely
 Not at all likely

IF 'NOT VERY' OR 'NOT AT ALL LIKLEY', ASK:

52. Why is that? (DO NOT READ LIST; ACCEPT MULTIPLE RESPONSES)

 Services offered by financial provider no longer meet needs
 Trying to diversify financing sources
 Documentation requested is too complex
 Service fees are too high
 Branch is closed
 Other (specify)

ASK THOSE WHO WERE TURNED DOWN FOR A LOAN:

53. Earlier you mentioned that your business was refused financing for a loan(s) in the past 12 months. How satisfied were you with the reason(s) provided by the financial institution to explain why the loan was refused? Please use a 5-point scale, where '1' means very dissatisfied and '5' means very satisfied.

Section 5: Satisfaction with CSBF Program Parameters

ASK EVERYONE:

I'd now like to ask you some questions about the Canada Small Business Financing Program. This is a federal government program, where any losses on loans made to businesses under the program are shared by the government with financial institutions. For each of the following features of the program, please tell whether you think the amount is too high, about right, or too low. How about...? (READ/ROTATE LIST)

54. The maximum loan size is $250 000.
55. There is a registration fee of 2 percent of the total amount of the loan.
56. The maximum amount of financing available is 90 percent of the eligible cost of the project or equipment.
57. The interest rate is capped at prime plus 3 percent.

I'm now going to identify a few more features of the program. As both a business representative and a taxpayer, please tell me how reasonable you think each of the following is, whether or not you have used or might need to use the program in future. How about...? Is this very reasonable, somewhat reasonable, not very reasonable or not at all reasonable? (READ/ROTATE LIST; ACCEPT DON”T KNOW/NO RESPONSE)

58. Only term loans are available under the program.
59. CSBF loans are restricted to financing for equipment, real property or immovables, leasehold improvements, and program registration fees.
60. If a borrower defaults on a loan, the federal government is responsible for 85 percent of eligible losses under the program, and the lender is responsible for 15 percent of the loss.

ASK THOSE AWARE THEY RECEIVED A CSBFP LOAN:

As a business that received a CSBFP loan,

61. Overall, how satisfied are you with the program's rules and procedures in terms of providing financing for small businesses? Please use a 5-point scale, where '1' means very dissatisfied and '5' means very satisfied.

ASK EVERYONE:

62. If you were having difficulty obtaining financing for your business, how useful do you think the CSBF Program would be to you? Please use a 5-point scale, where '1' means not useful at all and '5' means very useful.

That completes the survey. Thank you for your participation. It is sincerely appreciated.

Record by observation or from database:

Gender
Province
Urban vs. Rural
Language

• Figure 1 — Position
• Figure 2 — Number of Employees
• Figure 3 — Number of Years in Operation
• Figure 4 — 2006 Total Revenues
• Figure 5 — Region
• Figure 6 — Urban vs. Rural
• Figure 7 — Language
• Figure 8 — Gender
• Figure 9 — Use More Than One Financial Institution
• Figure 10 — Use More Than One Financial Institution (over time)
• Figure 11 — Financial Institutions Used: CSBFP Borrowers
• Figure 12 — Financial Institutions Used: SMEs
• Figure 13 — Financial Options Used During past 5 Years: CSBFP Borrowers
• Figure 14 — Financial Options Used During past 5 Years: SMEs
• Figure 15 — Apply for Term Loan in Past Year
• Figure 16 — Proportion Who Applied for Term Loan (over time)
• Figure 17 — Frequency of Applying for Loan in Past Year: CSBFP Borrowers
• Figure 18 — Frequency of Applying for Loan (over time): CSBFP Borrowers
• Figure 19 — Frequency of Applying for Loan in Past Year: SMEs
• Figure 20 — Frequency of Applying for Loan (over time): SMEs
• Figure 21 — Success Obtaining Loan(s): CSBFP Borrowers
• Figure 22 — Success Obtaining Loan(s) (over time): CSBFP Borrowers
• Figure 23 — Success Obtaining Loan(s): SMEs
• Figure 24 — Success Obtaining Loan(s) (over time): SMEs
• Figure 25 — Success Obtaining Loan(s): CSBFP Borrowers vs. SME Businesses
• Figure 26 — Proportion of Financing Needs Met by Loan(s): CSBFP Borrowers
• Figure 27 — Proportion of Financing Needs Met by Loan(s): SMEs

---

Figure 1 — Position

This table provides the answer to the question:
Q1:Could you please confirm for me your position within your company or business?

Position

Position	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503)
Owner	75	72
President/CEO	16	10
CFO/ Chief Financial Officer	2	2
Senior Manager/Executive	6	12
Other	3	4

Back to Figure 1

Figure 2 — Number of Employees

This table provides the answer to the question:
Q2:How many employees work for your business, including yourself?

By this, we mean both full-time and part-time staff. Please include part-time staff as the number of full-time equivalents.

Number of Employees

Number of Employees	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503)
One	14	13
2 to 4	36	35
5 to 20	42	45
More than 20	7	6

Back to Figure 2

Figure 3 — Number of Years in Operation

This table provides the answer to the question:
Q3: Approximately how many years has your company or business been in operation?

Number of Years in Operation

Years	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503)
Over 50 years	0	5
21-50 years	6	28
11-20 years	9	23
6-10 years	14	19
4-5 years	9	5
1-3 years	25	16
Less than one year	37	4

Back to Figure 3

Figure 4 — 2006 Total Revenues

This table provides the answer to the question:
Q4: For 2006, what were your business' total revenues?

Please include business revenue from all sources, before taxes and deductions.

2006 Total Revenues

Revenues	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503)
$1 million-$5 million	14	17
$500,001-$1 million	18	17
$300,001-$500,000	18	15
$100,001-$300,000	26	30
Under $100,000	24	21

Back to Figure 4

Figure 5 — Region

Region

Region	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503)
Atlantic	10	10
Quebec	22	22
Ontario	34	38
West	34	30

Back to Figure 5

Figure 6 — Urban vs. Rural

Urban vs. Rural

Area	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=215)
Urban	78	72
Rural	22	28

Back to Figure 6

Figure 7 — Language

Language

Language	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers SMEs
English	79	82
French	21	18

Back to Figure 7

Figure 8 — Gender

Gender

Gender	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503)
Male	73	66
Female	27	34

Back to Figure 8

Figure 9 — Use More Than One Financial Institution

This table provides the answer to the question:
Q6: Does your business use more than one financial institution for your banking and other financial arrangements?

Use More Than One Financial Institution?

More than one financial institution	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503) DK/NR=1% or less
Yes	28	28
No	72	71

Back to Figure 9

Figure 10 — Use More Than One Financial Institution (over time)

Use More Than One Financial Institution (over time)

Year	Percentage that said "yes"
	CSBFP borrowers	SMEs
2007	28	28
2001	28	28

Back to Figure 10

Figure 11 — Financial Institutions Used: CSBFP Borrowers

This table provides the answer to the question:
Q7: Which financial institution does your business use most often for your banking?

Financial Institutions Used: CSBFP Borrowers

Institution	Percentage
	CSBFP borrowers
Base=502 DK/NR=4% Multiple responses accepted
RBC	24
BNS/Scotiabank	20
TD-Canada Trust	20
Caisses populaires	15
Credit Unions	15
Bank of Montreal	7
CIBC	5
BDC	5
National Bank	3
Other	9

Back to Figure 11

Figure 12 — Financial Institutions Used: SMEs

This table provides the answer to the question:
Q7: Which financial institution does your business use most often for your banking?

Financial Institutions Used: SMEs

Institution	Percentage
	SMEs
Base=503 DK/NR=8% Multiple responses accepted
RBC	19
TD-Canada Trust	17
Credit unions	15
BNS/Scotiabank	14
CIBC	14
Caisses Populaires	12
Bank of Montreal	11
National Bank	4
Alberta Treasury Branch	3
Other	10

Back to Figure 12

Figure 13 — Financial Options Used During past 5 Years: CSBFP Borrowers

This table provides the answer to the question:
Q8: During the past five years, which of the following financing options have been or are being used by your business? How about…?

Financial Options Used During past 5 Years: CSBFP Borrowers

Financial options	Percentage
	CSBFP borrowers
Base=502 DK/NR=2% Multiple responses accepted
Term loans	71
Lines of credit	40
Credit cards	27
Credit from suppliers	10
Capital leasing for equipment	8
Government grants	8
Equity financing	6
Operational leases	3
Venture capital	2
Other	3
None/no external financing	7

Back to Figure 13

Figure 14 — Financial Options Used During past 5 Years: SMEs

This table provides the answer to the question:
Q8: During the past five years, which of the following financing options have been or are being used by your business? How about…?

Financial Options Used During past 5 Years: SMEs

Financial options	Percentage
	SMEs
Base=503 DK/NR=6% Multiple responses accepted
Lines of credit	42
Term loans	28
Credit cards	24
Credit from suppliers	8
Capital leasing for equipment	6
Government grants	3
Equity financing	3
Operational leases	2
Venture capital	2
Other	2
None/no external financing	26

Back to Figure 14

Figure 15 — Apply for Term Loan in Past Year

This table provides the answer for the question:
Q9: In the past 12 months, did your business apply for a term loan from a financial institution? Please include all loan applications, whether or not you received the loan.

Apply for Term Loan in Past Year

Applied	Percentage
	CSBFP borrowers	SMEs
CSBFP Borrowers (n=502) SMEs (n=503) Base=those who used financing DK/NR=1% or less
Yes	66	16
No	33	83

Back to Figure 15

Figure 16 — Proportion Who Applied for Term Loan (over time)

Proportion Who Applied for Term Loan (over time)

Year	Percentage
	CSBFP borrowers	SMEs
* Asked if their business had ever applied for a loan (back to footnote reference *)
2007	66	16
2001Footnote *	82	41

Back to Figure 16

Figure 17 — Frequency of Applying for Loan in Past Year: CSBFP Borrowers

This table provides the answer for the question:
Q10: How often did your business apply for a loan during the past 12 months?

Frequency of Applying for Loan in Past Year: CSBFP Borrowers

Frequency	Percentage
	CSBFP borrowers
Base=333, those who applied for term loan DK/NR=1%
Once	73
Twice	17
3 times	6
4 times	1
5 or more times	1

Back to Figure 17

Figure 18 — Frequency of Applying for Loan (over time): CSBFP Borrowers

Frequency of Applying for Loan (over time): CSBFP Borrowers

Frequency	Percentage
	2007	2001Footnote *
* Asked about last 24 months in 2001 (back to footnote reference *)
Once	73	44
Twice	17	18
3 times	6	17
4 times or more	2	15

Back to Figure 18

Figure 19 — Frequency of Applying for Loan in Past Year: SMEs

This table provides the answer for the question:
Q10: How often did your business apply for a loan during the past 12 months?

Frequency of Applying for Loan in Past Year: SMEs

Frequency	Percentage
	SMEs
Base=80, those who applied for term loan DK/NR=1%
Once	70
Twice	23
3 times	1
4 times	3
5 or more time	3

Back to Figure 19

Figure 20 — Frequency of Applying for Loan (over time): SMEs

Frequency of Applying for Loan (over time): SMEs

Frequency	Percentage
	2007	2001Footnote *
* Asked about last 24 months in 2001 (back to footnote reference *)
Once	70	63
Twice	23	14
3 times	1	10
4 times or more	6	9

Back to Figure 20

Figure 21 — Success Obtaining Loan(s): CSBFP Borrowers

This table provides the answer for the question:
Q11: Did your business succeed in obtaining the loan(s), either in full or in part, or were you turned down? Did you…?

Success Obtaining Loan(s): CSBFP Borrowers

Loan amount	Percentage
	CSBFP borrowers
Base=333, those who applied for term loan Multiple responses accepted
Receive full loan amount	82
Receive partial loan amount	10
Turned down	5
Received some loans, not others	4

Back to Figure 21

Figure 22 — Success Obtaining Loan(s) (over time): CSBFP Borrowers

Success Obtaining Loan(s) (over time): CSBFP Borrowers

Loan amount	Percentage
	2007	2001Footnote *
* Asked to businesses who had ever applied for loan (back to footnote reference *)
Receive full loan amount	82	81
Receive partial loan amount	10	16
Turned down	5	5

Back to Figure 22

Figure 23 — Success Obtaining Loan(s): SMEs

This table provides the answer for the question:
Q11: Did your business succeed in obtaining the loan(s), either in full or in part, or were you turned down? Did you…?

Success Obtaining Loan(s): SMEs

Loan amount	Percentage
	SMEs
Base=80, those who applied for term loan DK/NR=5% Multiple responses accepted
Receive full loan amount	59
Receive partial loan amount	4
Turned down	28
Received some loans, not others	5

Back to Figure 23

Figure 24 — Success Obtaining Loan(s) (over time): SMEs

Success Obtaining Loan(s) (over time): SMEs

Loan amount	Percentage
	2007	2001
Receive full loan amount	59	79
Receive partial loan amount	4	8
Turned down	28	15

Back to Figure 24

Figure 25 — Success Obtaining Loan(s): CSBFP Borrowers vs. SMEs Businesses

Success Obtaining Loan(s): CSBFP Borrowers vs. SMEs Businesses

Loan amount	Percentage
	CSBFP borrowers	SMEs
CSBFP borrowers (n=333) SMEs (n=80)
Receive full loan amount	82	59
Receive partial loan amount	10	4
Turned down	5	28
Received some loans, not others	4	5

Back to Figure 25

Figure 26 — Proportion of Financing Needs Met by Loan(s): CSBFP Borrowers

This table provides the answer for the question:
Q12: To what extent did the loan(s) meet your financing needs? In percentage terms, would you say it met….

Proportion of Financing Needs Met by Loan(s): CSBFP Borrowers

Financing needs	Percentage
	CSBFP borrowers
Base=314, those who received for loan(s) DK/NR=1%
100%	43
76-99%	20
50-75%	28
Less than half	8

Back to Figure 26

Figure 27 — Proportion of Financing Needs Met by Loan(s): SMEs

This table provides the answer for the question:
Q12: To what extent did the loan(s) meet your financing needs? In percentage terms, would you say it met…

Proportion of Financing Needs Met by Loan(s): SMEs

Financing needs	Percentage
	SMEs
Base=54, those who received for loan(s) DK/NR=2%
100%	46
76-99%	22
50-75%	19
Less than half	11

Back to Figure 27

• Figure 28 — Loan(s) Covered by Federal Government Program
• Figure 29 — Loan(s) Covered by Federal Government Program (over time)
• Figure 30 — Recall Name of Federal Government Program: CSBFP
• Figure 31 — Informed of Federal Loan Program
• Figure 32 — Unaided Recall of Federal Loan Programs
• Figure 33 — Total Awareness of Federal Government Guaranteed Loans Programs (unaided awareness):CSBFP
• Figure 34 — Total Awareness of Federal Government Guaranteed Loans Programs (unaided awareness): SMEs
• Figure 35 — Awareness of CSBFP Program by Name (CSBFP Borrowers vs. SMEs)
• Figure 36 — Overview of Awareness: CSBFP Borrowers
• Figure 37 — Overview of Awareness: SMEs
• Figure 38 — Knowledge of CSBFP borrowers
• Figure 39 — Knowledge of CSBFP: SMEs
• Figure 40 — Source of Info about CSBFP Borrowers
• Figure 41 — Source of Info about CSBFP: SMEs
• Figure 42 — Asked or Told about CSBFP by Lender: CSBFP Borrowers
• Figure 43 — Asked or Told about CSBFP by Lender: SMEs
• Figure 44 — Ever Obtained Loan Covered by Government Program: CSBFP Borrowers
• Figure 45 — Ever Obtained Loan Covered by Government Program (over time): CSBFP Borrowers
• Figure 46 — Ever Obtained Loan Covered by Government Program: SMEs
• Figure 47 — Ever Obtained Loan Covered by Government Program (over time): SMEs
• Figure 48 — Ever Decided Not to Use Government Loan Program: CSBFP Borrowers
• Figure 49 — Reasons for Refusing Government Guaranteed Loan: CSBFP Borrowers
• Figure 50 — Ever Decided Not to Use Government Loan Program: SMEs
• Figure 51 — Reasons for Refusing Government Guaranteed Loan: SMEs
• Figure 52 — Importance of Various Factors Re: Financing Options: CSBFP Borrowers
• Figure 53 — Importance of Various Factors Re: Financing Options: SMEs
• Figure 54 — Satisfaction with Various Factors Re: Financing Options: CSBFP Borrowers
• Figure 55 — Satisfaction with Various Factors Re: Financing Options: SMEs
• Figure 56 — Importance vs. Satisfaction: CSBFP Borrowers
• Figure 57 — Importance vs. Satisfaction: SMEs
• Figure 58 — Satisfaction with Availability of Financing Options
• Figure 59 — Satisfaction with Aspects of CSBFP Loan: CSBFP Borrowers
• Figure 60 — Likelihood of Using Same Lender Again
• Figure 61 — Perceptions of CSBFP Features: CSBFP Borrowers
• Figure 62 — Perceptions of CSBFP Features: SMEs
• Figure 63 — Perceptions of CSBFP Other Features: CSBFP Borrowers
• Figure 64 — Perceptions of CSBFP Other Features: SMEs
• Figure 65 — Overall Satisfaction with CSBFP Rules/Procedures: CSBFP Borrowers
• Figure 66 — Perceived Usefulness of CSBFP to Business

---

Figure 28 — Loan(s) Covered by Federal Government Program

This table provides the answer to the question:
Q13: Was your loan(s) covered by a program offered by the federal government that provides a guarantee on loans to small business?

Loan(s) Covered by Federal Government Program

Loan covered	Percentage
	CSBFP borrowers	SMEs
Base= those who received loan(s) DK/NR=1-4%
Yes	72	9
No	23	87

Back to Figure 28

Figure 29 — Loan(s) Covered by Federal Government Program (over time)

Loan(s) Covered by Federal Government Program (over time)

Year	Percentage that said 'yes'
	CSBFP borrowers	SMEs
2007	72	9
2001	71	24

Back to Figure 29

Figure 30 — Recall Name of Federal Government Program: CSBFP Borrowers

This table provides the answer to the question:
Q14: Do you remember the name of the program? If so, what is it?

Recall Name of Federal Government Program: CSBFP Borrowers

Program	Percentage
	CSBFP borrowers
Base=225; those whose loans were covered by federal program
Small business loan program	28
CSBFP	7
BIL	2
Guaranteed loans for SB	3
Other	2
No/Can't Recall	58

Back to Figure 30

Figure 31 — Informed of Federal Loan Program

This table provides the answer to the question:
Q15: Did the financial institution that turned down your application for a loan bring to your attention any programs offered by the federal government that provide a guarantee on loans to small business?

Informed of Federal Loan Program

Informed	Percentage
	CSBFP borrowers	SMEs
Base= those turned down for loan CSBFP borrowers (n=21) SMEs (n=25)
Yes	10	4
No	76	96
Not sure/Can't recall	14	0

Back to Figure 31

Figure 32 — Unaided Recall of Federal Loan Programs

This table provides the answer to the question:
Q17: Are you aware of any programs of the federal government that guarantee the loans of small businesses and share the risk with the financial institution?

Unaided Recall of Federal Loan Programs

Awareness	Percentage
	CSBFP borrowers	SMEs
Base=those not aware via previous loan/loan denial DK/NR=1% CSBFP borrowers (n=486) SMEs (n=503)
Yes	53	28
No	46	72

Back to Figure 32

Figure 33 — Total Awareness of Federal Government Guaranteed Loans Programs (unaided awareness): CSBFP Borrowers

Total Awareness of Federal Government Guaranteed Loans Programs (unaided awareness): CSBFP Borrowers

Awareness	Percentage
	CSBFP borrowers
Yes	71%
No	29%

Back to Figure 33

Figure 34 — Total Awareness of Federal Government Guaranteed Loans Programs (unaided awareness): SMEs

Total Awareness of Federal Government Guaranteed Loans Programs (unaided awareness): SMEs

Awareness	Percentage
	SMEs
Yes	28%
No	72%

Back to Figure 34

Figure 35 — Awareness of CSBF Program by Name (CSBFP Borrowers vs. SMEs)

This table provides the answer to the question:
Q19. Have you heard about the Canada Small Business Financing Program also known as CSBFP?

Awareness of CSBF Program by Name (CSBFP Borrowers vs. SMEs)

Awareness	Percentage
	CSBFP borrowers	SMEs
CSBFP borrowers (base=481) SMEs (base=502) Base= those not aware of the program via previous loan/refusal
Yes	22	19
No	72	74

Back to Figure 35

Figure 36 — Overview of Awareness: CSBFP Borrowers

Overview of Awareness: CSBFP Borrowers

Awareness	Percentage
Unprompted awareness of CSBFP	4
Prompted awareness of CSBFP	21
Aware of program, no name	51
Not aware of any federal loan program	24

Back to Figure 36

Figure 37 — Overview of Awareness: SMEs

Overview of Awareness: SMEs

Awareness	Percentage
Unprompted awareness of CSBFP	0
Prompted awareness of CSBFP	19
Aware of program, no name	20
Not aware of any federal loan program	61

Back to Figure 37

Figure 38 — Knowledge of CSBFP: CSBFP borrowers

This table provides the answer to the question:
Q20. What do you know about the Canada Small Business Financing Program?

Knowledge of CSBFP: CSBFP borrowers

Knowledge	Percentage
	CSBFP borrowers
Base=126; those aware of CSBFP DK/NR=3% Two responses accepted
Government program to help small businesses	27
Losses shared by government	17
Fewer guarantees required	14
Maximum financing amount	6
Restricted loans	6
Bank administered program	5
Too expensive	4
Program registration fees	4
Nothing	37
Other	4

Back to Figure 38

Figure 39 — Knowledge of CSBFP: SMEs

This table provides the answer to the question:
Q20: What do you know about the Canada Small Business Financing Program?

Knowledge of CSBFP: SMEs

Knowledge	Percentage
	SMEs
Base=96; those aware of CSBFP DK/NR=1% Two responses accepted
Government Program to help small businesses	22
Fewer guarantees required	6
Many rigid criteria	6
Maximum financing amount	3
Restricted loans	3
Losses shared by government	2
Too expensive	2
Program registration fees	1
Nothing	57
Other	6

Back to Figure 39

Figure 40 — Source of Info about CSBFP: CSBFP Borrowers

This table provides the answer to the question:
Q21 How did you first learn about the Canada Small Business Financing Program?

Source of Info about CSBFP: CSBFP Borrowers

Source of info	Percentage
	CSBFP borrowers
Base=126; those aware of CSBFP DK/NR=4%
Bank Officer	41
Friend/colleague	22
Business service provider	8
Federal government website	4
Brochure/pamphlet	2
Bank/private website	2
CSBFP website	2
Previous CSBFP loan	2
Involved in programs	2
Media sources	2
Not sure/Can't recall	6
Other	4

Back to Figure 40

Figure 41 — Source of Info about CSBFP: SMEs

This table provides the answer to the question:
Q21 How did you first learn about the Canada Small Business Financing Program?

Source of Info about CSBFP: SMEs

Source of info	Percentage
	SMEs
Base=96; those aware of CSBFP Not sure/Can't recall=8%
Friend/colleague	26
Brochure/pamphlet	25
Bank officer	9
Government Contract	7
Business associations	6
Media sources	5
Internet (general)	4
Involvement in programs	2
Business service provider	2
Other	4

Back to Figure 41

Figure 42 — Asked or Told about CSBFP by Lender: CSBFP Borrowers

This table provides the answer to the question:
Q22. When seeking financing, did you ask about the Canada Small Business Financing Program or did the lender identify the program for your consideration?

Asked or Told about CSBFP by Lender: CSBFP Borrowers

Source of info	Percentage
	CSBFP borrowers
Base=126; those aware of CSBFP DK/NR=1%
Lender identified CSBFP	52
Asked about CSBFP	22
Neither	17
Not sure/Can't recall	8

Back to Figure 42

Figure 43 — Asked or Told about CSBFP by Lender: SMEs

This table provides the answer to the question:
Q22: When seeking financing, did you ask about the Canada Small Business Financing Program or did the lender identify the program to you for your consideration?

Asked or Told about CSBFP by Lender: SMEs

Source of info	Percentage
	SMEs
Base=96; those aware of CSBFP DK/NR=2%
Lender identified CSBFP	15
Asked about CSBFP	4
Neither	74
Not sure/Can't recall	5

Back to Figure 43

Figure 44 — Ever Obtained Loan Covered by Government Program: CSBFP Borrowers

This table provides the answer to the question:
Q23: Has your business ever obtained a loan covered by a government program, either federal or provincial, that guarantees the loans of small businesses and shares the risk with the financial institutions?

Ever Obtained Loan Covered by Government Program: CSBFP Borrowers

Obtained a loan	Percentage
	CSBFP borrowers
Base=315; those who obtained financing DK/NR=1%
Yes, federal	32
Yes, unsure of sponsor	18
Yes, provincial	10
No	32
Not sure/Can't recall	7

Back to Figure 44

Figure 45 — Ever Obtained Loan Covered by Government Program (over time): CSBFP Borrowers

Ever Obtained Loan Covered by Government Program (over time): CSBFP Borrowers

Obtained a loan	Percentage
	2007	2001
No	32	38
Yes, federal	32	27
Yes, unsure of sponsor	18	17
Yes, provincial	10	7
Yes, both	0	2
Not sure/Can't recall	7	9

Back to Figure 45

Figure 46 — Ever Obtained Loan Covered by Government Program: SMEs

This table provides the answer to the question:
Q23. Has your business ever obtained a loan covered by a government program, either federal or provincial, that guarantees the loans of small businesses and shares the risk with the financial institution?

Ever Obtained Loan Covered by Government Program: SMEs

Obtained a loan	Percentage
	SMEs
Base=58; those who obtained financing
No	74
Yes, federal	17
Yes, provincial	3
Yes, unsure of sponsor	3
Not sure/Can't recall	2

Back to Figure 46

Figure 47 — Ever Obtained Loan Covered by Government Program (over time): SMEs

Ever Obtained Loan Covered by Government Program (over time): SMEs

Obtained a loan	Percentage
	2007	2001
No	74	79
Yes, federal	17	9
Yes, provincial	3	5
Yes, unsure of sponsor	3	3

Back to Figure 47

Figure 48 — Ever Decided Not to Use Government Loan Program: CSBFP Borrowers

This table provides the answer to the question:
Q24. Has your business ever decided NOT to use a government-guaranteed loan program?
This could be under a program operated by either the federal or provincial level of government

Ever Decided Not to Use Government Loan Program: CSBFP Borrowers

Not Use Government Loan Program	Percentage
	CSBFP borrowers
No	88
Yes, federal	4
Yes, unsure of sponsor	3
Yes, provincial	2
Not sure/Can't recall	2

Back to Figure 48

Figure 49 — Reasons for Refusing Government Guaranteed Loan: CSBFP Borrowers

This table provides the answer to the question:
Q25. Why is that [that your business decided not to use a government-guaranteed loan program?

Reasons for Refusing Government Guaranteed Loan: CSBFP Borrowers

Reasons for refusing government-guaranteed loan program	Percentage
	CSBFP borrowers
Base= 42; those who decided not to use government loan program DK/NR=2%
Too expensive	31
Too restrictive	21
Not necessary	21
Admin. Burden	12
Bank/lender's advice	2
Other financing	5
Other	5

Back to Figure 49

Figure 50 — Ever Decided Not to Use Government Loan Program: SMEs

This table provides the answer to the question:
Q24. Has your business ever decided NOT to use a government-guaranteed loan program?
This could be under a program operated by either the federal or provincial level of government.

Ever Decided Not to Use Government Loan Program: SMEs

Not use government-guaranteed loan program	Percentage
	SMEs
Base=503; those who obtained financing DK/NR=1%
No	84
Yes, federal	4
Yes, provincial	2
Yes, unsure of sponsor	1
Yes, both	2
Not sure/Can't recall	6

Back to Figure 50

Figure 51 — Reasons for Refusing Government Guaranteed Loan: SMEs

This table provides the answer to the question:
Q25.Why is that [that your business decided NOT to use a government-guaranteed loan program?

Reasons for Refusing Government Guaranteed Loan: SMEs

Not use government guaranteed loan program	Percentage
	SMEs
Base = 43; those who decided not to use govt. loan program DK/NR=2%
Too expensive	26
Too much	16
Not necessary	26
Too restrictive	21
Other financing	2
Other	2
Not sure/Can't recall	5

Back to Figure 51

Figure 52 — Importance of Various Factors Re: Financing Options: CSBFP Borrowers

This table provides the answer to the question:
Q26-33 How important are each of the following factors to your business when it comes to obtaining financing or considering financing options?

Importance of Various Factors Re: Financing Options: CSBFP Borrowers

Importance of factors for financing	Percentage
	5 Very important	4	3	2	1 Not important at all
Base=502 DK/NR=2% or less
Interest rate	72	17	8	1	1
Lender service quality	67	22	8	2	1
Financing granted vs.requested	63	25	8	1	0
Negotiating terms	58	28	9	2	1
Application process time	57	26	11	3	1
Securities/guarantees needed	49	30	16	2	2
Variety of options	50	28	15	3	1
Service fees	53	22	17	6	2

Back to Figure 52

Figure 53 — Importance of Various Factors Re: Financing Options: SMEs

This table provides the answer to the question:
Q26-33 How important are each of the following factors to your business when it comes to obtaining financing or considering other financing options?

Importance of Various Factors Re: Financing Options: SMEs

Importance of factors for financing	Percentage
	5 Very important	4	3	2	1 Not important at all
Base=503 NA=2-3% or less DK/NR=3% or less
Interest rate	69	16	6	2	4
Negotiating terms	58	22	11	1	5
Lender service quality	56	22	12	2	4
Financing granted vs. requested	51	26	11	2	4
Service fees	51	23	13	3	6
Application process time	46	25	16	4	5
Securitie/guarantees needed	44	25	17	4	6
Variety of options	43	24	20	3	7

Back to Figure 53

Figure 54 — Satisfaction with Various Factors Re: Financing Options: CSBFP Borrowers

This table provides the answer to the question:
Q34-41. Thinking about the past five years and any times that your business may have applied for for or obtained financing, please tell me the extent to which you were satisfied with each of these same factors in terms of the financing options available.

Satisfaction with Various Factors Re: Financing Options: CSBFP Borrowers

Satisfaction with financing factors	Percentage
	5 Very satisfied	4	3	2	1 Very dissatisfied
Base=318 NA=3% or less DK/NR=1% or less
Service fees	13	26	29	19	12
Interest rate	11	31	34	14	8
Variety of options	15	27	26	16	12
Negotiating terms	17	25	27	16	13
Securities/guarantees needed	19	29	31	11	8
Application process time	28	27	23	11	10
Lender service quality	43	30	18	4	4
Financing granted vs. requested	49	26	13	9	3

Back to Figure 54

Figure 55 — Satisfaction with Various Factors Re: Financing Options: SMEs

This table provides the answer to the question:
Q34-41. Thinking about the past five years and any times that your business may have applied for or obtained financing please tell me the extent to which you were satisfied with each of these same factors in terms of the financing options available.

Satisfaction with Various Factors Re: Financing Options: SMEs

Satisfaction with financing factors	Percentage
	5 Very satisfied	4	3	2	1 Very dissatisfied
Base=209 NA=5-10% DK/NR=3% or less
Financing granted vs. requested	29	28	18	8	9
Application process time	20	33	20	7	11
Lender service quality	23	29	25	9	8
Interest rate	12	27	28	16	10
Negotiating terms	13	22	27	15	12
Variety of options	10	21	29	17	12
Securitie/guarantees needed	12	18	29	15	17
Service fees	10	19	26	20	18

Back to Figure 55

Figure 56 — Importance vs. Satisfaction: CSBFP Borrowers

This graph positions various loan factors into four quadrants based on their perceived importance and level of satisfaction to borrowers. The quadrants are separated by two axes. The vertical axis illustrates the level of importance with less important at the bottom and very important at the top while the horizontal axis illustrates the level of satisfaction with very satisfied on the far right and less satisfied on the far left. The factors "interest rate" and "negotiating terms" can be considered relative challenges as they are situated in the upper left quadrant which means that they have a low level of satisfaction but a high level of importance. The factors "service fees", "access to options" and "required securities" are situated on the border of the lower left quadrant and the upper left quadrant which means that they have a low level of satisfaction and a medium level of importance. They are classified as "other challenges". The factor "processing time" is situated at the intersection of the vertical and horizontal axis which means it has a medium level of satisfaction and of importance. The factors "service quality" and "financing granted" are situated in the upper right quadrant which means that they have a high level of satisfaction and importance, indicating they are relative strengths. There are no factors in the bottom right quadrant that stands for high level of importance and low level of satisfaction. This quadrant is classified as "other strengths".

Back to Figure 56

Figure 57 — Importance vs. Satisfaction: SMEs

This graph positions various loan factors into four quadrants based on their perceived level of importance and satisfaction to SMEs. The quadrants are seperated by two axes. The vertical axis illustrates the level of importance with less important at the bottom and very important at the top while the horizontal axis illustrates the level of satisfaction with very satisfied on the far right and less satisfied on the far left. The factors "negotiating terms" and "interest rate" are situated in the upper left quadrant which means that they have a low level of satisfaction and a high level of importance. They are classified as other challenges. The factors "service quality" and "financing granted" are situated on the border of the upper right quadrant and the lower right quadrant which means that they have a high level of satisfaction and a medium level of importance. They are classified between "relative strengths" and "other strengths". The factor "processing time" is situated in the lower right quadrant which means that it has a high level of satisfaction and a low level of importance. It is classified as a "other strength". The factors "required securities", "access to options" and "service fees" are situated in the lower left quadrant which means they have both a low level of satisfaction and importance. They are classified as "other challenges".

Back to Figure 57

Figure 58 — Satisfaction with Availability of Financing Options

This table provides the answer to the question:
Q42: Overall, how satisfied were you with the financing options available?

Satisfaction with Availability of Financing Options

	Percentage
	5 Very Satisfied	4	3	2	1 Very dissatisfied
CSBFP Borrowers (n=318) SMEs (n=209) DK/NR=3% or less
CSBFP Borrowers	18	37	28	11	5
SMEs	13	32	26	14	10

Back to Figure 58

Figure 59 — Satisfaction with Aspects of CSBFP Loan: CSBFP Borrowers

This table provides the answer to the question:
Q43-50. Thinking specifically about the CSBFP loan(s) your business received in the past 12 months, I'd like you to tell me how satisfied you were with each of the following aspects of the loan.

Satisfaction with Aspects of CSBFP Loan: CSBFP Borrowers

	Percentage
	5 Very satisfied	4	3	2	1 Very dissatisfied
Base=175; those who acknowledged use of CSBFP NA=12% or less DK/NR=5% or less
Annual admin. fee	8	23	26	19	8
Registration fees	10	27	26	18	13
Admin. reporting requirements	15	40	23	4	3
Availability of program info	20	35	21	13	7
Securities/ guarantees needed	17	41	24	10	5
Approval time	26	35	23	6	7
Other aspects of application process	19	45	23	6	4
Financing granted vs. requested	42	33	12	10	3

Back to Figure 59

Figure 60 — Likelihood of Using Same Lender Again

This table provides the answer to the question:
Q51. You mentioned that you received a term loan during the past 12 months. How likely is it that your business will use the same lender for other sources of financing in the future? Would you say it is…?

Likelihood of Using Same Lender Again

	Percentage
	Not at all likely	Not very	Moderately	Very likely
SMEs (n=54) CSBFP Borrowers (n=315) Base=those who received loan in past year DK/NR=1% or less
SMEs	6	11	19	65
CSBFP Borrowers	4	5	23	67

Back to Figure 60

Figure 61 — Perceptions of CSBFP Features: CSBFP Borrowers

This table provides the answer to the question:
Q54-57. I'd now like to ask you some questions about the Canada Small Business Financing Program. This is a federal government program, where any losses on loans made to businesses under the program are shared by the government with financial institutions. For each of the following features of the program, please tell whether you think the amount is too high, about right or too low. How about…?

Perceptions of CSBFP Features: CSBFP Borrowers

	Percentage
	Too high	About right	Too low
Base=502 DK/NR=1%
Max. loan = $250,000	4	66	28
Max. financing = 90%	5	83	11
2% registration fee	56	42	1
Prime + 3% interest cap	59	39	0

Back to Figure 61

Figure 62 — Perceptions of CSBFP Features: SMEs

This table provides the answer to the question:
Q54-57.I'd now like to ask you some questions about the Canada Small Business Financing Program. This is a federal government program, where any losses on loans made to businesses under the program are shared by the government with financial institutions. For each of the following features of the program, please tell whether you think the amount is too high, about right or too low. How about…?

Perceptions of CSBFP Features: SMEs

	Percentage
	Too high	About right	Too low
Base=503 DK/NR=3-4%
Max. loan = $250,000	8	68	20
Max. financing = 90%	11	79	6
2% registration fee	52	42	2
Prime + 3% interest cap	62	34	1

Back to Figure 62

Figure 63 — Perceptions of CSBFP Other Features: CSBFP Borrowers

This table provides the answer to the question:
Q58-60. I'm now going to identify a few more features of the program. As both a business representative and a taxpayer, please tell me how satisfied you are with each of the following whether or not you have used or might need to use the program in the future.

Perceptions of CSBFP Other Features: CSBFP Borrowers

	Percentage
	Very reasonable	Somewhat	Not very	Not at all reasonable
Base=492 DK/NR=2-3%
Loan restrictions	41	41	12	3
Only term loans available	30	53	11	3
Government shares losses with lender	48	34	11	6

Back to Figure 63

Figure 64 — Perceptions of CSBFP Other Features: SMEs

This table provides the answer to the question:
Q58-60. I'm going to identify a few more features of the program. As both a business representative and a taxpayer, please tell me how satisfied you are with each of the following, whether or not you have used or might need to use the program in the future.

Perceptions of CSBFP Other Features: SMEs

	Percentage
	Very reasonable	Somewhat	Not very	Not at all reasonable
Base=493 DK/NR=3%
Government shares losses with lender	39	27	20	12
Only term loans available	31	49	11	5
Loan restrictions	39	42	11	4

Back to Figure 64

Figure 65 — Overall Satisfaction with CSBFP Rules/Procedures: CSBFP Borrowers

This table provides the answer to the question:
Q61: Overall, how satisfied are you with the program's rules and procedures in terms of providing financing for small businesses?

Overall Satisfaction with CSBFP Rules/Procedures: CSBFP Borrowers

	Percentage
	Very satisfied 5	4	3	2	Very dissatisfied 1
Base=177, those aware they received the CSBFP loan
CSBFP Borrowers	25	42	25	3	3

Back to Figure 65

Figure 66 — Perceived Usefulness of CSBFP to Business

This table provides the answer to the question:
Q62: If you were having difficulty obtaining financing for your business, how useful do you think the CSBF Program would be to you?

Perceived Usefulness of CSBFP to Business

	Percentage
	Very useful 5	4	3	2	Not useful at all 1
CSBFP Borrowers (n=502) SMEs (n=503) DK/NR=3-5%
CSBFP Borrowers	57	23	12	2	4
SMEs	43	19	23	3	8

Back to Figure 66