Entrepreneurs upbeat about business growth prospects
By Talia Jackson-King | June 29, 2009
Entrepreneurs are optimistic about their business prospects, a new BDC survey has found.
Even in the current economic downturn 86 per cent of Canadian entrepreneurs were very to somewhat optimistic about their company's growth potential.
Optimism dropped to 75 per cent concerning their industry's growth and 60 per cent for the economy as a whole.
The entrepreneurs cited a strong stable economy (59 per cent), the value of the Canadian dollar (41 per cent) and a strong labour market (41 per cent) as factors that are positive for business growth in the near future.
"Entrepreneurs see opportunities where others may see only difficulties," said Edmée Métivier, Executive Vice President, Financing and Consulting at BDC.
Canadian entrepreneurs' greatest concern was tightening credit.
Forty per cent of the entrepreneurs surveyed had applied for credit recently, with 70 per cent seeking an operating line of credit, followed by term loans at 28 per cent, business credit cards at 22 per cent and commercial mortgages at 18 per cent.
Only 34 per cent of applications were successful, representing 14.4 per cent of all entrepreneurs.
Of the remaining 76 per cent, 40 per cent had their financing rejected and 25 per cent were still waiting for a response to their application.
"The SME sector has always contributed the lion's share of economic growth and, as a result, it will be pivotal to an economic recovery," said Métivier. "More than ever, lenders to the SME market need to bring a flexible approach to their financing and investment decisions."
Other concerns cited by those surveyed were:
- The recession (65 per cent)
- Increased cost of fuel (45 per cent)
- Materials (40 per cent)
So while 86 per cent of entrepreneurs feel optimistic about their business growth prospects 70 per cent of entrepreneurs also feel that tight credit will be a problem in the near future.
If you enjoyed this article, be sure to visit CanadaOne's article knowledge base for more informative articles.