Small and Medium-sized Enterprise Financing in Canada — Note to Readers on Sources and Uses of Data

Sources

Many statistical findings presented in this report were collected by Statistics Canada in two series of surveys: The Survey on Financing of Small and Medium-sized Enterprises, conducted in 2000 and 2001 and The Survey of the Suppliers of Business Financing, conducted in 2000 and 2001. For comparative purposes, results related to The Survey of the Suppliers of Business Financing, 2000 have been included; the summary tables for that year can be found at the end of this report.

All data in Part I and Part II are derived from The Survey on Financing of Small and Medium-sized Enterprises, 2000 and 2001, unless otherwise stated. All data in Part III come from the Survey of the Suppliers of Business Financing, 2000 and 2001, unless otherwise stated. All data on venture capital and quasi-equity presented in Part IV originated with Macdonald & Associates Limited, unless otherwise stated. The initial public offering (IPO) data in Part IV was taken from "Les émissions initiales au Canada: bilan, anomalies et dysfonctions" a study commissioned by Industry Canada in 2003.

A Glossary of Terms can be found at the end of this report.

Uses and Interpretation of Data

Survey on Financing of Small and Medium-sized Enterprises, 2000: Since the data reported relate to firms that were operating at the end of the calendar year 2000, it does not capture data on those businesses that failed nor those entrepreneurs who planned to start a business but failed to do so, whether because of financing or other difficulties. In many places in this report, correlations and observations are made by region, industry, gender of business owner and other business characteristics. Given the relatively small sample sizes, caution must be exercised in drawing strong conclusions. The purpose of this report is to provide initial observations and interpretations of the data. Likewise, it is not possible to form conclusions about long-term trends on the basis of one or two observations. Following last year's preliminary report, this is the first of a regular series of reports, and these issues will be examined in more detail as more data are collected.

Survey on Financing of Small and Medium-sized Enterprises, 2001: All data reported relate to firms that were operating at the end of calendar year 2001. The survey did include entrepreneurs who tried to start a business but were unsuccessful. The survey targeted businesses with 0 to 499 full-time equivalent employees. Financing and leasing businesses, cooperatives, subsidiaries, non-profit organizations, government agencies, educational institutions, hospitals and other public sector organizations were excluded. Many parts of this report feature comparisons and observations by region, industry and gender of business owner, between 2000 and 2001. Given the relatively small sample sizes (especially in 2001), caution must be applied is ascribing causality or in distinguishing long-term trends from short-term anomalies. The purpose of this report is to provide initial observations and interpretations of the data.

Survey of the Suppliers of Business Financing, 2000 and 2001: All data reported regarding total amounts authorized, total amounts outstanding, total value of leases and total lease amounts outstanding are all stock data. In other words, data for these categories has been aggregated over all clients up to a certain time and do not represent the amounts in a particular year. Due to current limitations with the survey questionnaire, the quality of data in the debt category is more complete than the data from the leasing category. The SME Financing Data Initiative is working on improving the survey design to allow all survey respondents to provide the same level of quality in the information reported.

Surveys' comparability: It is difficult to draw comparisons between the Survey on Financing of Small and Medium-sized Enterprises and the Survey of the Suppliers of Business Financing as the two surveys use different regional and industry breakdowns. In addition, the Survey on Financing of Small and Medium-sized Enterprises categorizes businesses by their number of employees and provides five employment size breakdowns, while the Survey of the Suppliers of Business Financing only provides total amounts of debt and leasing, broken down by eight authorization sizes. The SME Financing Data Initiative partners are examining ways to reconcile the two surveys.