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SME Financing in Canada, 2002 — Part II: B - Demographic Factors

Business Owner Characteristics: A Factor in Accessing Financing?

Introduction

Over the last decade there has been a debate, not only about access to financing for SMEs in general, but also about whether specific demographic characteristics of ownership contribute to or inhibit their access to financing. For the most part this debate has focussed on market failures, otherwise known as "gaps" in the financing market. There has been considerable academic literature generated in the last two decades on this concept. This paper does not intend to revisit this debate. Its purpose is to report on the relevant findings of Statistics Canada's Survey on Financing of Small and Medium-sized Enterprises, 2000 and the survey on Financing SMEs: Satisfaction, Access, Knowledge and Needs, 2001, commissioned by Industry Canada from the Université du Québec à Trois-Rivières. While the debate concerning the financing of SMEs owned by female entrepreneurs (discussed later in this section) has attracted the most attention in the last few years, the financing experiences of other groups of entrepreneurs have received less attention. While these surveys do not purport to be the final word on the financing experiences of these groups, they do shed light on the experiences of various demographic groups, in some cases for the first time. More data gathering and analysis will be needed to provide definitive conclusions on the degree of weight attributable to any single characteristic of a firm in assessing whether it has greater or lesser difficulty accessing financing.

Tentative Conclusion

The findings outlined in this section suggest that the characteristics of a business – such as size and sector of operation – may be stronger determinants of a firm's success in accessing financing than the demographic characteristics of business ownership. This is consistent with earlier findings, but more research will be required to determine the weight to attach to each characteristic in assessing its contribution to a firm's likelihood of success in accessing financing.

Figure 30 – Demographics of Business Ownership, 2000

Source: The Research Institute for SMEs, Université du Québec à Trois-Rivières, Financing SMEs: Satisfaction, Access, Knowledge and Needs, 2001, commissioned by Industry Canada, 2002. back

Gender of Principal Owner of Canadian SMES

Of all Canadian SMEs:

• 54.7 percent are 100 percent owned by men;
• 45.4 percent are wholly or partially owned by women;
• 19.0 percent are owned equally by men and women; and
• 14.9 percent are wholly owned by women.

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