Canada’s small businesses say credit unions are the best suppliers of financial services for their sector, according to a survey of almost 13,000 small and medium-sized businesses.
The survey was conducted by the Canadian Federation of Independent Business and published last week.
Respondents said local credit unions were most willing to lend, offering better terms and lower fees. Credit union account managers were also rated the best at responding to small-business client needs and understanding their issues.
The chartered banks scored far lower in the survey, and the Canadian Imperial Bank of Commerce was rated the worst among big banks.
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HSBC was judged the worst of all lenders.
The Bank of Montreal and ScotiaBank were rated the best of the major national chartered banks.
“Overall, credit unions do the best job of serving entrepreneurs,” CFIB research vice-president Doug Bruce said when releasing the report.
“Banks need to pay close attention to the report’s findings if they are serious about serving the small business market.”
The CFIB also said the survey, last done in 2010, revealed a “disturbing trend” about bank service that favours large over small.
“The smaller the business, the lower the bank score,” it said.
“Compared to larger businesses, smaller firms have a tougher time getting the financing they need from their bank.”
CIBC also scored the lowest in the 2010 membership survey.
The national small business lobby said financing is the lifeblood for many of its members.
More than one-third applied for financing during the previous year, including new loans, lines of credit and increased credit lines. The purposes ranged from buying new equipment to purchasing inventory.
“Credit unions dominate in servicing the smallest business,” said the report.
“This is true for SMEs (small and medium-sized enterprises) of all sizes — micro, small and mid sized.”
