CSBFP Awareness and Satisfaction Study

Final Report

PDF version

Prepared for: Industry Canada

Prepared by: R.A. Malatest & Associates Ltd.

Contact Information:
Derek Hughes, Research Manager
R.A. Malatest & Associates Ltd.
Phone: (613) 688-1847
Fax: (613) 288-1278
Email: d.hughes@malatest.com
Web: www.malatest.com

Executive Summary

The Canada Small Business Financing Program (CSBFP) is a federal government program, the objective of which is to help small businesses obtain access to financing that they may otherwise have difficulty in obtaining. Through this program, financial institutions make loans to businesses. The financial institutions then register these loans with the program and, should the loan default, the government covers a portion of the lender's losses. The government collects fees to help offset the costs of the program, namely the cost of loans that default. Annually, the CSBFP covers loans totalling approximately $1 billion. The program is administered by Industry Canada.

The Canada Small Business Financing Act and the Treasury Board Secretariat's Evaluation Policy require the CSBFP to be evaluated every five years. Previous program awareness and satisfaction studies were conducted in 2001 and 2007. In 2013, Industry Canada commissioned R.A. Malatest & Associates, Ltd., to conduct the third such study to date.

This study aims to collect this information from CSBFP borrowers and non-borrowers and to see how the awareness, knowledge and satisfaction of the CSBFP are changing over time. It also seeks to examine how these dimensions are influenced by industry sector, region, and firm size and age, among other dimensions. Finally, it looks to explain organizational behaviour towards the program by discovering the drivers and inhibitors to awareness and participation.

Overall this study finds increased awareness of the Canada Small Business Financing Program, both among its participants ("CSBFP borrowers") and the broader small business community ("non-borrowers"). Borrowers who received loans covered by the CSBFP in 2012 were more likely to recall that the federal government supported that loan than was previously observed. Borrowers primarily learn of the program through financial institution officials. In practice many lenders refer to the program by alternate names (such as the Small Business Loans Program or Business Improvement Loan). As a result program participants were as likely to know the program by an alternate name as by its proper name. In the small business community, the program is largely known by alternate names.

Program participants and the broader small-business community believe the program's terms and conditions are fair. A bare majority of CSBFP borrowers, however, believe the program's administration fee to be too high, and somewhat fewer than half believe the interest rate to be too high, as well. Non-borrowers were less critical in these regards. Nevertheless more than four-fifths of borrowers believe there to be a high or very high need for the program in the small business community, and more than two-thirds say they are likely or very likely to consider the CSBFP for their future financing needs. Finally, most borrowers who were aware of their participation in the program were largely satisfied with the program and reported that it had a positive impact on their ability to grow their business.

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