Three quarters of small businesses have taken on debt as a result of COVID-19 and 68 per cent estimate it will take more than a year to pay off, according to survey results released July 15 by the Canadian Federation of Independent Business (CFIB).

The small businesses that have incurred debt because of the pandemic say they have taken on $135,000 on average, the survey revealed. “Based on these survey results and after adjustments to reflect the entire economy, CFIB estimates that the total debt taken on so far by Canadian small businesses as a result of COVID-19 is $117 billion,” says the organization.

"Government debt has ballooned and so too has the private debt taken on by small businesses to deal with COVID-19," said Laura Jones, Executive Vice-President at CFIB. "I've talked to many businesses that are open again, but are worried about being able to outrun the debt they have accumulated, particularly with sales still down. Recovery is going to be a slow slog and both governments' and customers' support is critical to make it happen."

To finance COVID-19 revenue shortfalls and extra costs businesses surveyed said they are relying on personal savings (37 per cent); credit cards (34 per cent); bank loans (18 per cent); retirement savings (11 per cent); mortgages (9 per cent) and loans from families and friends (9 per cent).