This has been an incredibly difficult year for businesses of all sizes, and owners of small and medium-sized enterprises (SMEs) have been especially impacted. SMEs regularly face numerous costs that account for a considerable amount of working capital, including suppliers, leases and mortgages, and payroll. Most of the time, SMEs don’t have the ability to cut costs on these important expenses, and as a result, have faced the challenge of finding the working capital they need to keep their businesses alive. According to a recent survey study from Amex, only (40 percent) of SMEs believe that with their current cash flow they can maintain operations for more than six months. And while many SME owners have creative ideas to fuel growth and feel inspired to reinvest in themselves and their businesses, they see access to funds from financial lenders as an essential factor in being able to do so.
These impacts are not only limited to the health of Canadian businesses. Many Canadian business owners have had to make extraordinary personal sacrifices to keep their doors open during the COVID-19 pandemic, with almost half of SME owners (43 percent) having made personal sacrifices to protect businesses. The trade-offs have been significant with activities such as forgoing personal purchases and vacations, mortgaging their houses, businesses, and other assets to stay afloat topping the list.
Despite these challenges, the resilience and optimism of small business owners continues to inspire us, as many SMEs adapted quickly and strategically to keep the lights on. “The past year presented challenges no one could have foreseen, but the optimism felt among Canadian business owners is a true testament to the agility and strength of entrepreneurs”, said Paul Roman, Vice President & General Manager, Global Commercial Services at American Express Canada. “After the global turbulence of 2020, Canadian SMEs are working tirelessly to get back on track and need our support now more than ever.”
It’s not uncommon for moments of crisis to drive innovation, and we’ve seen this trend emerge among small business owners, who have creative ideas around growing their businesses. In fact, according to Amex’s recent survey, 34 percent of Canadian SMEs have resolved to find new ways to grow their business in 2021, such as expanding their digital footprint or ramping up their marketing.
The eCommerce and digital space is more important than ever for SMEs to connect with their community and customers. And with the COVID-19 pandemic accelerating the rise in digital payments, fintech can certainly play a role in the recovery of small businesses. Fintech technology offers SMEs more options when it comes to accessing the cash flow they need, managing supplier payments and more. Furthermore, innovation in financial services also helps reduce barriers in lending, allowing small business owners to grow and thrive on the road to recovery.
To pass on the key advantages of fintech innovations to customers, Amex recently partnered with global originations platform Linear to launch American Express Business Loans in Canada. Through Linear’s digital platform, eligible current SME customers can now access funding through a simple and quick application and approvals process for business loans. “Our partnership with Linear is really what sets us apart in what we can offer Canadian SMEs. Linear allows us to introduce unsecured loans to SMEs while harnessing the capabilities of its world-class digital platform to ensure a quick and simple online application and approval process”, said Roman.
Canadian small business owners have dealt with a lot of challenges over this past year and applying for a loan should not be one of them. Through Linear’s digital platform, a select group of Amex’s small and medium enterprise customers in Canada can now access unsecured funding from $5,000 to $250,000, with annual interest rates from 6 percent APR and payment terms between 6, 12, 18 or 24 months depending on their needs.
This partnership with Linear also further showcases Amex’s commitment to backing Canadian SMEs by providing them with the business solutions they need to recover and is a transformational first step in establishing Amex’s leadership in SME lending in Canada. While the Card is still a key B2B payment tool for SME customers, Amex is looking to build its payment capabilities beyond-the-Card.
While it’s difficult to know what the future holds during this time of uncertainty, Canadian SMEs are optimistic about the future and determined to do whatever it takes to ensure their businesses survive. According to survey findings, 48 percent of SMEs feel optimistic for what 2021 holds, while only 12 percent feel pessimistic, and 14 percent are unsure. It’s this optimism that inspires Amex to provide tools and services to help Canadian SMEs rebuild. “Supporting small businesses is core to our business strategy and we continue to highlight their importance to the local economy, connect them with more customers and provide them with multiple payment and cash flow tools to help them grow and prosper,” said Roman. Like Canadian SMEs, Amex feels optimistic about the future of small businesses in Canada and will continue to back these businesses with the cash flow and payment solutions they need to succeed.