Following rest, the healing process commences
The Business Development Bank of Canada (BDC) is stepping up its efforts to support Small and Medium Enterprises (SMEs) during periods of economic change and uncertainty. With a portfolio worth $57 billion, including $5 billion in venture capital, the BDC is committed to facilitating access to financing, enabling growth opportunities, and fostering resilience through partnerships and tailored financial products.
Since Isabelle Hudon took over as President and CEO in August 2021, the BDC has grown significantly. In 2021, the BDC had 65,000 client companies, a number that has since grown to 108,000. This growth is a testament to the BDC's successful strategies in supporting SMEs.
One of the key initiatives launched by the BDC is the Pivot to Thrive program, established in early March 2022 with a $500 million envelope. This program aims to help businesses navigate uncertain times by offering consulting services and flexible financing options. Interestingly, SMEs using the Pivot to Thrive program have shown a preference for consulting services over financing during a slowdown.
The BDC's strategy recognises the critical role SMEs play in Canada’s economy and aims to reverse the downward trend in financing directed to small businesses. To achieve this, the BDC has expanded its Community Banking initiative, adding major financial partners like the Royal Bank of Canada to increase reach and provide more SMEs with growth-oriented loans and support.
Key elements of BDC’s approach include the Community Banking Program, the Business Accelerator Loan Program, and flexible financing options for SMEs. The Community Banking Program, launched in late 2024, aims to make financing more accessible to entrepreneurs who may not fit traditional credit profiles. The Business Accelerator Loan Program, with an $800 million fund, targets growing businesses with financing that supports aggressive scaling in a changing economic environment.
BDC offers various loans tailored to SME needs, such as the Small Business Loan program (up to $100,000 with flexible repayment terms including initial interest-only payments for six months) and the Start-up Financing program (up to $250,000 with options like principal payment postponement). These loans enable SMEs to maintain and expand operations during uncertain conditions.
The BDC also focuses on innovation and growth, supporting SMEs in digital transformation, diversification, and market expansion. This alignment with broader strategies for long-term SME resilience in uncertain economic environments is crucial to the BDC's mission.
In addition to its focus on SMEs, the BDC has prioritised the security and defense sector for support, as per the Canadian government’s focus. The BDC has also set up specific funds, including the Excelles platform, with $500 million in venture capital, which has been supporting women entrepreneurs since 2023.
The BDC does not compete with financial institutions but plays a complementary role by providing development capital to businesses. This partnership approach is evident in the BDC's increasing collaborative financing with institutions like Desjardins, Royal Bank, TD, and certain credit unions.
The BDC generates $9 billion in debt financing and $600 million in venture capital investments annually. Over the next few years, the BDC will focus more on the phenomenon of business property transfers in Canada.
Isabelle Hudon, the President and CEO of the BDC, will attend the Defence and Security Equipment International exhibition in London next month. She sees similarities between the period of strong uncertainty during the pandemic and the current business climate and emphasises the need to work on Ontario, where many automotive industry businesses have used the BDC's services.
The BDC brings new clients to these lending institutions through its loan guarantee services. Founded 81 years ago, the BDC now has 3,000 employees across the country, including 1,200 at its Montreal headquarters. With over 100 offices nationwide, the BDC has the highest penetration in Quebec, followed by the Atlantic provinces, British Columbia, the Prairies, and finally Ontario.
In summary, BDC’s current strategy during economic uncertainty is to expand and diversify financing access, encourage business growth and adaptation, and build resilience through flexible loan programs and strategic partnerships that respond to evolving SME needs. By focusing on innovation, growth, and partnerships, the BDC is playing a vital role in supporting SMEs in Canada.
- The BDC, with its expanded Community Banking initiative and strategic partnerships like the one with the Royal Bank of Canada, is extending growth-oriented loans and support to a more significant number of small-businesses, as witnessed by the growth from 65,000 to 108,000 client companies since 2021.
- Recognising the significance of the French-speaking small-business community, the BDC, through its various loan programs such as the Small Business Loan program and Start-up Financing program, provides flexible financing options to these businesses, enabling them to maintain and expand operations despite uncertain conditions, much like SMEs using the Pivot to Thrive program have done.
