by Stephen Dafoe
A new Canadian Federation of Independent Business (CFIB) survey reports that three-quarters of Alberta small businesses have taken on debt due to COVID-19. Seventy per cent of those anticipate more than a year will be needed to pay it off.
The same report indicates 62 per cent of businesses are now fully open with 34 per cent fully staffed. However, only 22 per cent of businesses are back to normal revenues.
“I’ve talked to many businesses that are open again, but are worried about being able to outrun the debt they have accumulated, particularly with sales still down,” said CFIB Executive Vice-President Laura Jones. “Recovery is going to be a slow slog, and both governments’ and customers’ support is critical to make it happen.”
The CFIB survey indicates the average pandemic business debt to be $162,000. As such, CFIB estimates Alberta small business debt taken on as a result of COVID-19 to be $18.8 billion.
The survey revealed 41 per cent are using personal savings to cover shortfalls, 35 per cent using credit cards, 19 per cent bank loans, 13 per retirement savings, 10 per cent mortgages, and 9 per cent utilizing loans from family and friends.
CFIB Alberta provincial affairs director Annie Dormuth expressed concern to see Alberta businesses with the highest average debt and the largest percentage of companies actively considering bankruptcy.
“Alberta small businesses are in a very vulnerable position and support throughout the recovery phase is vital to their survival,” Dormuth said.
For more information on supporting the province’s businesses, CFIB has set up the website www.SmallBusinessEveryDay.ca.