Banking & You

Banking for Small and Medium-Sized Businesses

#Banking

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Banks in Canada provide essential financing to businesses of all sizes, serving as a key source of credit for companies across the country.

In 2024, banks authorized close to $1.85 trillion to growing businesses including close to $295 billion in credit to small- and medium‑sized enterprises (SMEs)¹
Banks represent 68.5 per cent² of all lending supplied to businesses through business loans, short-term promissory notes known as bankers’ acceptances, non-residential mortgages and other lending products
Considering the financing market more broadly, including the capital markets, banks represent roughly one-quarter of the total³ business financing marketplace.

Banks support for SMEs

The CBA defines a small- and medium-sized enterprise (SME) as having authorized borrowing under $5 million and defines small businesses as having authorized borrowing under $1 million.

Banks serve close to three million self-employed, small and medium-sized businesses across Canada. The majority of bank business customers fall into this category, and banks are committed to meeting their needs. This market is becoming increasingly competitive, diverse and technologically savvy, which is why all banks have dedicated departments to help their SME customers.

Banks provide a variety of short-term lending options, including overdraft protection, credit cards and lines of credit. SMEs can also arrange a variety of longer-term financing solutions through their banks such as term loans, mortgages, and leasing. Banks also participate in the federal government’s Canada Small Business Financing Program (CSBFP). The government shares risk with lenders through this program, which helps stimulate job and wealth creation. Small businesses or start-ups operating for profit in Canada with gross annual revenues of $10 million or less are eligible for CSBFP loans.

Throughout changing economic and business cycles, including the COVID-19 pandemic, banks have continued to lend to credit worthy businesses, providing flexibility and a range of credit products including loans and lines of credit.

SME lending by the numbers

In 2024, banks authorized close to $295 billion in credit to small- and medium-sized enterprises (SMEs). Of this credit, SMEs have drawn close to $185 billion. They have close to $112 billion in unused credit available⁴
Approval rates are high: 90.9 per cent of all SMEs that applied for debt financing from a financial institution were approved.⁵ Since 2010, over 81 per cent of small business financing requests have been approved annually in Canada⁶
Approval rates for rural SMEs are higher than for their urban counterparts⁷
Obtaining financing is one of the least problematic external obstacles to growth. SMEs are more concerned about the rise in operating costs, fluctuations in demand for products and services, increasing competition, recruiting and retaining skilled employees among other external obstacles.⁷
For those that did not seek debt financing, 1.4 per cent of SMEs said they did not need it. Just over two per cent said that it was because they thought they would be turned down and six per cent thought the cost of financing was too high⁹

More than just lending

SMEs can turn to banks for a variety of financial and advisory solutions, including – but not limited to – financing. These banking solutions include:

Providing advice and support throughout the pandemic and into the recovery to help small business clients’ manage their immediate cash management or new lending needs
Business chequing and savings accounts, in both Canadian and foreign dollar denominations
Tax payment services
Foreign exchange services
Succession and investment planning
Electronic funds transfers
Online and telephone banking
Payroll and filing services
Coaching podcasts, booklets and seminars

Supporting women entrepreneurs

Banks have taken initiatives to assist women entrepreneurs to build and grow their businesses - from financing and other banking products and services to capacity building and networking programs. According to Statistics Canada, for SME businesses majority‑owned by women, 86 per cent were approved for debt financing.¹⁰

Canadian banks are active supporters of SMEs across Canada and this support and commitment extends to women entrepreneurs. Beyond the business banking services offered to their clients, banks have programs and services internally to support women entrepreneurs as well as offering support to external organizations.

Strong ties to agriculture

Banks in Canada also have a longstanding business relationship with farmers and agricultural customers and these strong relationships have helped banks work with their customers through significant challenges. Farmers have had to confront the COVID‑19 pandemic, BSE, avian influenza, drought, floods, the H1N1 virus and country of origin labelling (COOL). Banks have been there for their clients, working with them on an individual, case-by-case basis to assess their unique needs and to develop solutions. More information about banking support for the agriculture sector can be found in the article Banking for Farmers.

Protecting your small business from cyber threats

The reality of today’s increasingly digital-first economy means that businesses, both large and small, use the Internet to manage their operations, serve their customers and grow their business. Cyber criminals target small businesses that they believe have not yet implemented proper cyber security safeguards; and this means that small businesses could be exposed to cyber security risks to a greater extent.

Banks in Canada are working around the clock on the prevention and detection of cyber security threats and work closely with each other and with bank regulators, law enforcement and all levels of government to protect the financial system and their customers from cyber crime. There are also simple steps small business owners and managers can take to recognize cyber threats and protect their businesses and employees from cyber crime.

The CBA’s Small Business Cyber Security Toolkit can help small business owners and managers protect against their businesses from the most common cyber threats.

¹ CBA Business Credit Statistics, December 2024, figures from eight banks
² Stats Canada, Survey on Financing and Growth of Small and Medium Enterprises, 2023, Released March 2025.
³ Stats Canada, Credit Liabilities of Private Non-Financial Corporations, 2024, Released May 2025.
⁴ CBA Business Credit Statistics, December 2024, figures from eight banks
⁵ Ibid.
⁶ Stats Canada,Survey on Financing and Growth of Small and Medium Enterprises, 2023, Released March 2025.
⁷ Innovation, Science and Economic Development Canada, Credit Conditions Survey, 2023, Released May 2025.
⁸ Stats Canada, Survey on Financing and Growth of Small and Medium Enterprises, 2023 (Data Tables), Released March 2025.
⁹ Ibid.
¹⁰ Ibid.

Questions?

If you have general questions about banking in Canada, call the Canadian Bankers Association’s Banking Information Line at 1‑800‑263‑0231 or send an email to inform@cba.ca.