While most financial institutions and governments are quick to tout their commitment to small according to Equifax’s recent Small Business Month survey more than half of 300 business owners surveyed feel that they are not supported by their banks (52 per cent) and government (62 per cent).
As part of our Q2 2021 Small Business Trends and Insights webinar, we asked our panel of experts to weigh in on their thoughts on the removal of these supports and what government and financial institutions can do to help underrepresented small businesses. Participating in our panel were moderator Marcy Burchfield, VP, Economic Blueprint Institute Toronto Region Board of Trade, and panelists Tiffany Callender, CEO, Federation of African Canadian Economics (FACE), Mark Dokis, Senior Advisor, National Aboriginal Capital Corporations Association (NACCA), Angela Armstrong, Founder and President, Prime Capital and Board Chair, Women Building Futures.
Mark Dokis: I think most of the businesses in the service, retail, tourism sectors who’ve been harder hit by COVID are either looking for more forgiveness or even generally just grants. I think they really don’t have any resources left. If they do, boy, they must be down to their last few pennies. And their cash flow is insufficient enough right now, particularly since business life has not returned to normal that they can support more debt.
Tiffany Callender: Forgiveness is what most entrepreneurs are looking at. They are really doing everything that they can to try to ensure that their business survives. They've tried to be innovative, they've looked for support, but the type of, I guess you would say, understanding that is required due to the circumstances that they're in, this is where I think the rubber meets the road. Or the handbrake gets pulled, because financial institutions, what is their real ability to be more forgiving and more lenient and not threaten their objectives?
Angela Armstrong: As a business owner and looking at clients that are women, I see the same thing that we've all experienced a little in the last year; what's it like to run a business or to do your job when you've got young people at your feet who have their lives and their own needs, and you are torn 100 per cent of the time? You feel like you’re failing everywhere. Subsidies going away are going to change the financial metrics. They don’t change social infrastructure issues.
But as a lender, I'm concerned about the subsidies. I would love to see some kind of additional forgiveness with qualifications and criteria put in place so that the debt burden on these businesses coming out on top of all of the other burdens, don't become existential in nature because that's not good for our economy.
Tiffany Callender: Having conversations with financial institutions and governments around “what are the actual barriers?” How can we address and put in supports that are not just accessing capital, but also opening an opportunity to educate and to bring best practice to the community. You have to bring those who have the power to make change institutionally to the table with those who can be the voice of those who are outside of the framework.
I think it's important as well to capture these stories and to capture the data that’s particular and specific to these communities. Because again, when we look at the institutions and what they use as credit worthiness, or what they use as risk metrics, it leaves out the opportunity for other factors.
Mark Dokis: If they want to break down the barriers, they're going to have to build relationships in those communities and understand that relationship building leads to success.
Angela Armstrong: Make sure you've got a table of conversation where you’ve got the incumbents, because they've got successful track records and the resources to bring to bear, but also the new thinkers, the challengers, the new kinds of lenders as well. You need to have a collaborative table conversation to say, “how do we serve the entire spectrum of credit needs?”
For more valuable insights on how lenders can increase their reach with underrepresented small business owners, watch the full small business quarterly trends webinar and panel discussion.
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