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Home > Key Small Business Financing Statistics > Key Small Business Financing Statistics — December 2006

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Key Small Business Financing Statistics — December 2006

What is an SME?

There are many definitions of SMEs, which can be categorized by size according to the number of employees, the value of annual sales, annual revenues or borrowing capacity. This report defines SMEs in terms of number of employees and annual revenues.

This definition is fairly consistent with other definitions of SMEs around the world. The European Union (EU) defines SMEs as enterprises that employ fewer than 250 employees and have an annual turnover not exceeding €50 million (C$79 million), and/or an annual balance sheet total not exceeding €43 million (C$68 million).

In the United States (U.S.), the Small Business Administration defines small enterprises as independent businesses having fewer than 500 employees. However, unlike the EU and Canada, which have simple definitions that apply to all industries, the U.S. has chosen to set size standards for each individual North American Industry Classification System (NAICS) category. This variation is intended to better reflect industry differences. The most common sizes used to differentiate medium-sized firms from large firms are
  • 500 employees for most manufacturing and mining industries, and
  • 100 employees for wholesale trade industries.

This document defines small and medium-sized enterprises (SMEs) according to the definition used in the Survey on Financing of Small and Medium Enterprises as businesses

  • with fewer than 500 employees, and
  • with annual revenues of less than $50 million.

Excluded are unincorporated firms with less than $30 000 in revenues, non-profit organizations, government organizations, schools, hospitals, subsidiaries, cooperatives, and financing and leasing companies.

The statistics in this publication are reported at the enterprise level, where enterprise is defined as the business entity that directs and controls the resources and activities of operations in Canada and has a complete set of financial statements. Other publications report data at the establishment level — the smallest unit/grouping for which data are published.

Since 2000, the Survey of Suppliers of Business Financing has used another definition, proposed by the Canadian Bankers' Association, under which firms with loan authorizations (that is, the maximum amount businesses are allowed to borrow) of less than $1 million are considered SMEs.

The use of two different definitions limits comparisons between the two surveys. To date, the SME FDI has found little correlation between size of business (number of employees) and authorization size. However, the SME FDI will continue to analyze other methods to compare and reconcile data produced using the definition in the Survey on Financing of Small and Medium Enterprises with data using the loan authorization definition.


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Date Modified: 2011-12-12

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