SME Financing Data Initiative
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SME Financing in Canada, 2003
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Table of Contents
Executive Summary
Note to Readers on Sources and Uses of Data
SME Marketplace
PART I: Financing Conditions for SMEs in 2001
PART II: Financial Structure of Canadian SMEs
PART III: Financial Services Sector C Providers of Business Financing
PART IV: Profile of Risk Capital Financing
Appendix: SME Financing Data Initiative — Stakeholder Consultations, Fall 2002
Summary Tables: Survey of Suppliers of Business Financing 2000
Glossary of Terms
Sources Cited
Note to Readers on Sources and Uses of Data
SME Marketplace
PART I: Financing Conditions for SMEs in 2001
- 1. The Economic Environment in 2001
- 2. Commercial Debt: Application and Approval Rates
- 3. Type of Debt Instrument Requested by SMEs
- 4. Lease Financing
- 5. Summary Tables
PART II: Financial Structure of Canadian SMEs
- 1. National Overview and Regional Variations
- 2. Stage of Business Development
- 3. Industry Sector
- 4. Business Size
- 5. Women Entrepreneurs
- 6. Young Entrepreneurs
- 7. High-Growth SMEs (GSMEs)
- 8. Financial Structure of Canadian SMEs: Statistical Tables
PART III: Financial Services Sector C Providers of Business Financing
- 1. Canada's Financial Service Providers: An Evolving Landscape
- 2. Overview of Financial Institutions' Services
- 3. Key Financial Institutions
- 4. Commercial Debt: A Regional Perspective
- 5. Commercial Debt: A Sectoral Perspective
- 6. Summary Tables
PART IV: Profile of Risk Capital Financing
- 1. Risk Capital Financing — An Overview
- 2. Informal Investors — Friends, Family and Angels
- 3. Venture Capital Financing
- 4. Initial Public Offerings (IPOs)
- 5. Quasi-Equity Financing
Appendix: SME Financing Data Initiative — Stakeholder Consultations, Fall 2002
Summary Tables: Survey of Suppliers of Business Financing 2000
Glossary of Terms
Sources Cited
List of Tables and Figures
Figures
Executive Summary
Figure 1 — Percentage of SMEs Requesting Debt Financing in 2001
Figure 2 — Percentage of SMEs Requesting Lease Financing in 2001
Figure 3 — Percentage of SMEs Using Financial Instruments in 2000, by Type
Figure 4 — Authorizations of Commercial Debt by Financial Service Providers as of December 31, 2001
Figure 5 — Types and Amounts of Risk Capital Financing by Stage of Development — Technology-Driven Businesses
Figure 6 — Canadian VC Activity, 1998–2002
Figure 2 — Percentage of SMEs Requesting Lease Financing in 2001
Figure 3 — Percentage of SMEs Using Financial Instruments in 2000, by Type
Figure 4 — Authorizations of Commercial Debt by Financial Service Providers as of December 31, 2001
Figure 5 — Types and Amounts of Risk Capital Financing by Stage of Development — Technology-Driven Businesses
Figure 6 — Canadian VC Activity, 1998–2002
SME Marketplace
Figure 7 — Distribution of Canadian SMEs, 2001
Figure 8 — Distribution of Canadian SMEs by Sector in 2001
Figure 9 — Distribution of Canadian SMEs by Size of Business (by Number of Employees) in 2001
Figure 10 — Distribution of SMEs by Employment Size by Sector in 2001
Figure 8 — Distribution of Canadian SMEs by Sector in 2001
Figure 9 — Distribution of Canadian SMEs by Size of Business (by Number of Employees) in 2001
Figure 10 — Distribution of SMEs by Employment Size by Sector in 2001
Part I
Figure 11 — Gross Domestic Product of Canada, 1998-2002
Figure 12 — Interest Rate Variations, 1998-2002
Figure 13 — SMEs' Request Rate for Debt by Province in 2001
Figure 14 — SMEs' Approval Rate for Debt by Province in 2001
Figure 15 — SMEs' Request Rate for Debt by Sector in 2001
Figure 16 — SMEs' Approval Rate for Debt by Sector in 2001
Figure 17 — Requests for Leasing by Type of Supplier in 2001
Figure 12 — Interest Rate Variations, 1998-2002
Figure 13 — SMEs' Request Rate for Debt by Province in 2001
Figure 14 — SMEs' Approval Rate for Debt by Province in 2001
Figure 15 — SMEs' Request Rate for Debt by Sector in 2001
Figure 16 — SMEs' Approval Rate for Debt by Sector in 2001
Figure 17 — Requests for Leasing by Type of Supplier in 2001
Part II
Figure 18 — Types of Financial Instruments in Use by SMEs in 2000
Figure 19 — Average Distribution (%) of Debt Outstanding by SMEs in 2000, by Supplier
Figure 20 — Distribution (%) of Ownership Capital in SMEs, 2000
Figure 21 — Types of Financial Instruments Used by Start-Up SMEs
Figure 22 — Types of Financial Instruments in Use by Resource-Based or Goods-Producing SMEs in 2000
Figure 23 — Percentage Ownership Capital Owned by the Business Owner/Operator in 2000, by Sector
Figure 24 — Types of Financial Instruments Used by Service Sector SMEs in 2000
Figure 25 — Distribution (%) of an Average KBI SME's Ownership Capital, 2000
Figure 26 — Financial Instruments in Use by Established SMEs in 2000, by Size of Business
Figure 27 — Types of Financial Instruments in Use by SMEs in 2000, by Gender of Owner Figure 28 — Average Distribution (%) of SME Debt Outstanding in 2000, by Supplier and Gender of Owner
Figure 29 — Types of Financial Instruments in Use by SMEs in 2000, by Age of Owner
Figure 30 — Types of Financial Instruments in Use by GSMEs in 2000
Figure 31 — Sectoral Distribution of GSMEs, 2000
Figure 19 — Average Distribution (%) of Debt Outstanding by SMEs in 2000, by Supplier
Figure 20 — Distribution (%) of Ownership Capital in SMEs, 2000
Figure 21 — Types of Financial Instruments Used by Start-Up SMEs
Figure 22 — Types of Financial Instruments in Use by Resource-Based or Goods-Producing SMEs in 2000
Figure 23 — Percentage Ownership Capital Owned by the Business Owner/Operator in 2000, by Sector
Figure 24 — Types of Financial Instruments Used by Service Sector SMEs in 2000
Figure 25 — Distribution (%) of an Average KBI SME's Ownership Capital, 2000
Figure 26 — Financial Instruments in Use by Established SMEs in 2000, by Size of Business
Figure 27 — Types of Financial Instruments in Use by SMEs in 2000, by Gender of Owner Figure 28 — Average Distribution (%) of SME Debt Outstanding in 2000, by Supplier and Gender of Owner
Figure 29 — Types of Financial Instruments in Use by SMEs in 2000, by Age of Owner
Figure 30 — Types of Financial Instruments in Use by GSMEs in 2000
Figure 31 — Sectoral Distribution of GSMEs, 2000
Part III
Figure 32 — Amount of Commercial Debt Authorized by Financial Suppliers as of December 31, 2001
Figure 33 — Market Share of Commercial Debt Authorized, Under $1 million, by Financial Suppliers as of December 31, 2001
Figure 34 — Commercial Debt Authorized, Under $250 000, by Financial Suppliers as of December 31, 2001
Figure 35 — Market Share of Commercial Leases Authorized by Financial Suppliers as of December 31, 2001
Figure 36 — Distribution of Commercial Debt Authorized by Domestic Banks as of December 31, 2001
Figure 37 — Percentage of Total Commercial Debt Authorized by Domestic Banks Under $1 Million (by Size of Authorization) as of December 31, 2001
Figure 38 — Loss Rates on Commercial Debt of Domestic Banks by Size of Authorization in 2000 and 2001
Figure 39 — Distribution of Credit Unions Across Canada
Figure 40 — Distribution by Size of Authorization of Commercial Debt Authorized by Credit Unions and Caisses Populaires as of December 31, 2001
Figure 41— Percentage of Commercial Debt Authorized by Credit Unions and Caisses Populaires to SMEs (by Size of Authorization) as of December 31, 2001
Figure 42 — Loss Rates of Commercial Debt Authorized by Credit Unions and Caisses Populaires to SMEs (by Size of Authorization) in 2000 and 2001
Figure 43 — Percentage of Commercial Debt Authorized by Finance Companies to SMEs (by Size of Client Authorization) as of December 31, 2001
Figure 44 — Distribution of Commercial Debt Authorized by Size of Authorization by GBEs as of December 31, 2001
Figure 45 — Market Share of Financial Service Providers Provision of Commercial Debt by Province/Territory, as of December 31, 2001
Figure 46 — Distribution of Commercial Debt Authorized by Financial Service Providers by Sector as of December 31, 2001
Figure 33 — Market Share of Commercial Debt Authorized, Under $1 million, by Financial Suppliers as of December 31, 2001
Figure 34 — Commercial Debt Authorized, Under $250 000, by Financial Suppliers as of December 31, 2001
Figure 35 — Market Share of Commercial Leases Authorized by Financial Suppliers as of December 31, 2001
Figure 36 — Distribution of Commercial Debt Authorized by Domestic Banks as of December 31, 2001
Figure 37 — Percentage of Total Commercial Debt Authorized by Domestic Banks Under $1 Million (by Size of Authorization) as of December 31, 2001
Figure 38 — Loss Rates on Commercial Debt of Domestic Banks by Size of Authorization in 2000 and 2001
Figure 39 — Distribution of Credit Unions Across Canada
Figure 40 — Distribution by Size of Authorization of Commercial Debt Authorized by Credit Unions and Caisses Populaires as of December 31, 2001
Figure 41— Percentage of Commercial Debt Authorized by Credit Unions and Caisses Populaires to SMEs (by Size of Authorization) as of December 31, 2001
Figure 42 — Loss Rates of Commercial Debt Authorized by Credit Unions and Caisses Populaires to SMEs (by Size of Authorization) in 2000 and 2001
Figure 43 — Percentage of Commercial Debt Authorized by Finance Companies to SMEs (by Size of Client Authorization) as of December 31, 2001
Figure 44 — Distribution of Commercial Debt Authorized by Size of Authorization by GBEs as of December 31, 2001
Figure 45 — Market Share of Financial Service Providers Provision of Commercial Debt by Province/Territory, as of December 31, 2001
Figure 46 — Distribution of Commercial Debt Authorized by Financial Service Providers by Sector as of December 31, 2001
Part IV
Figure 47 — Types and Amounts of Risk Capital Financing by Stage of Development — Technology-Driven Businesses
Figure 48 — Canadian VC Activity, 1998-2002
Figure 49 — Investment Trends by Stage of Development, 1996-2002
Figure 50 — VC Types: Trends, 1998-2002
Figure 51 — Average Share of VC Investments and VC Financings by Sector, 1996-2002 Figure 52 — VC Investment in Information Technology by Region, 2002
Figure 53 — VC Investment in Life Sciences by Region, 2002
Figure 54 — VC Investment in Traditional Sectors by Region, 2002
Figure 55 — Regional Distribution of VC Investment, KBI Firms and GDP in Canada, 2002
Figure 56 — Ontario VC Investment in Information Technology, 1996-2002
Figure 57 — Ontario VC Investment in Life Sciences, 1996-2002
Figure 58 — Venture Capital Investment in Quebec, 1996-2002
Figure 59 — VC Investment in British Columbia, 1996-2002
Figure 60 — VC Investment in the Prairies, 1996-2002
Figure 61 — VC Investments as a Percentage of GDP in the US and Canada, 1996-2002
Figure 62 — VC Under Management as a % of GDP in Canada, 1996-2002
Figure 63 — Number and Value of Canadian IPOs, 1991-2000
Figure 64 — Quasi-Equity Investment by Region, 2001-2002
Figure 65 — Quasi-Equity Investment by Sector, 2001-2002
Figure 48 — Canadian VC Activity, 1998-2002
Figure 49 — Investment Trends by Stage of Development, 1996-2002
Figure 50 — VC Types: Trends, 1998-2002
Figure 51 — Average Share of VC Investments and VC Financings by Sector, 1996-2002 Figure 52 — VC Investment in Information Technology by Region, 2002
Figure 53 — VC Investment in Life Sciences by Region, 2002
Figure 54 — VC Investment in Traditional Sectors by Region, 2002
Figure 55 — Regional Distribution of VC Investment, KBI Firms and GDP in Canada, 2002
Figure 56 — Ontario VC Investment in Information Technology, 1996-2002
Figure 57 — Ontario VC Investment in Life Sciences, 1996-2002
Figure 58 — Venture Capital Investment in Quebec, 1996-2002
Figure 59 — VC Investment in British Columbia, 1996-2002
Figure 60 — VC Investment in the Prairies, 1996-2002
Figure 61 — VC Investments as a Percentage of GDP in the US and Canada, 1996-2002
Figure 62 — VC Under Management as a % of GDP in Canada, 1996-2002
Figure 63 — Number and Value of Canadian IPOs, 1991-2000
Figure 64 — Quasi-Equity Investment by Region, 2001-2002
Figure 65 — Quasi-Equity Investment by Sector, 2001-2002
Tables
SME Marketplace
Part I
Part I End Tables
Table 3 — SME Request and Approval Rates for Debt in 2001
Table 4 — SMEs Approval and Request Rates for Lease Financing, 2001
Table 5 — Proportion of SMEs Requesting Grants or Subsidies from Government or Community Programs
Table 6 — Amount of Debt Financing Requested and Authorized in 2001
Table 7 — Percentage of Total Requests for Debt by Type of Supplier in 2001
Table 8 — Proportion of SMEs Requesting Specific Debt Instruments, 2001
Table 4 — SMEs Approval and Request Rates for Lease Financing, 2001
Table 5 — Proportion of SMEs Requesting Grants or Subsidies from Government or Community Programs
Table 6 — Amount of Debt Financing Requested and Authorized in 2001
Table 7 — Percentage of Total Requests for Debt by Type of Supplier in 2001
Table 8 — Proportion of SMEs Requesting Specific Debt Instruments, 2001
Part II
Part II End Tables
Table 10 — Percentage of SMEs Using Financing During Business Start-Up, by Instrument Type
Table 11 — Percentage of SMEs Using Financing in 2000, by Instrument Type
Table 12 — Distribution (%) of an Average SME's Debt Outstanding in 2000, by Supplier
Table 13 — Total Amount ($ millions) of SMEs' Total Debt Outstanding in 2000, by Supplier
Table 14 — Distribution (%) of an Average SME's Ownership Capital in 2000
Table 15 — Key Financial Statement Figures in Average Dollars per SME, 2000
Table 16 — Average Net Profit by Gender of Ownership and Sector in 2000
Table 11 — Percentage of SMEs Using Financing in 2000, by Instrument Type
Table 12 — Distribution (%) of an Average SME's Debt Outstanding in 2000, by Supplier
Table 13 — Total Amount ($ millions) of SMEs' Total Debt Outstanding in 2000, by Supplier
Table 14 — Distribution (%) of an Average SME's Ownership Capital in 2000
Table 15 — Key Financial Statement Figures in Average Dollars per SME, 2000
Table 16 — Average Net Profit by Gender of Ownership and Sector in 2000
Part III
Table 17 — Distribution of Financial Institutions from 1997 to 2001
Table 18 — Application Method Used by SMEs Who Requested Debt in 2001
Table 18 — Application Method Used by SMEs Who Requested Debt in 2001
Part III End Tables
Table 19 — Amount of Commercial Debt Authorized and Outstanding by Authorizations as of December 31, 2001
Table 20 — Amount of Commercial Debt Authorized and Outstanding by Industry as of December 31, 2001
Table 21 — Debt Authorized and Outstanding by Province as of December 31, 2001
Table 22 — Amount of Lease Financing Authorized and Outstanding by Authorizations as of December 31, 2001
Table 23 — Amount of Lease Financing Authorized and Outstanding by Industry as of December 31, 2001
Table 24 — Amount of Lease Financing Authorized and Outstanding by Province as of December 31, 2001
Table 25 — Loss Rates (%) on Commercial Debt, by Authorization Categories, of Financial Suppliers in 2001
Table 20 — Amount of Commercial Debt Authorized and Outstanding by Industry as of December 31, 2001
Table 21 — Debt Authorized and Outstanding by Province as of December 31, 2001
Table 22 — Amount of Lease Financing Authorized and Outstanding by Authorizations as of December 31, 2001
Table 23 — Amount of Lease Financing Authorized and Outstanding by Industry as of December 31, 2001
Table 24 — Amount of Lease Financing Authorized and Outstanding by Province as of December 31, 2001
Table 25 — Loss Rates (%) on Commercial Debt, by Authorization Categories, of Financial Suppliers in 2001
Part IV
Table 26 — Performance of VC and Private Equity Funds in Canada as of December 31, 2001
Table 27 — IPO Costs by Issue Size, 1997-1999
Table 27 — IPO Costs by Issue Size, 1997-1999
2000 End Tables
Table 28 — Amount of Commercial Debt Authorized and Outstanding by Authorizations as of December 31, 2000
Table 29 — Amount of Commercial Debt Authorized and Outstanding by Industry as of December 31, 2000
Table 30 — Debt Authorized and Outstanding by Province as of December 31, 2000
Table 31 — Amount of Lease Financing Authorized and Outstanding by Authorizations as of December 31, 2000
Table 32 — Amount of Lease Financing Authorized and Outstanding by Industry as of December 31, 2000
Table 33 — Amount of Lease Financing Authorized and Outstanding by Province as of December 31, 2000
Table 34 — Loss Rates (%) on Commercial Debt, by Authorization Categories, of Financial Suppliers in 2000
Table 29 — Amount of Commercial Debt Authorized and Outstanding by Industry as of December 31, 2000
Table 30 — Debt Authorized and Outstanding by Province as of December 31, 2000
Table 31 — Amount of Lease Financing Authorized and Outstanding by Authorizations as of December 31, 2000
Table 32 — Amount of Lease Financing Authorized and Outstanding by Industry as of December 31, 2000
Table 33 — Amount of Lease Financing Authorized and Outstanding by Province as of December 31, 2000
Table 34 — Loss Rates (%) on Commercial Debt, by Authorization Categories, of Financial Suppliers in 2000
