Should the government forgive small business debt?

business debt

As far as sample sizes go, an August survey of Ottawa small businesses is, well, small. But that doesn’t mean the implications of the Ottawa Coalition of Business Improvement Areas survey aren’t large.

You don’t need an MBA to know that small businesses are in trouble. They were hammered through the lockdown, mostly forced to close their doors and watch large international companies meet heightened consumer demand for the products needed to get through a pandemic.

The damage was done by the time the large department stores were taping off their “non-essential” sections. The only thing left to do was wait for an easing of restrictions and hope customers would head back to independently owned shops and restaurants.

If only it were so easy.

The businesses that responded to the survey said they had three major problems. Forty-one per cent said their supply chains had been disrupted. Thirty-seven per cent can’t find staff. Almost 40 per cent find it practically impossible to operate with current capacity restrictions.

These are existential issues (look at the impending sale and/or closure of the Rainbow Bistro). When I was at a restaurant in late August, the server apologized in advance for the mistakes that would be made because its kitchen was almost devoid of help despite being open for nearly a month.

It’s not an issue that will go away – 87 per cent of respondents said they were concerned that capacity restrictions would continue. It’s hard to recover when you’re turning people away.

That’s not the only issue.

  • 68 per cent said they haven’t returned to pre-pandemic sales.
  • 49 per cent have seen their expenses increase, while 45 per cent have taken on loans to keep going.
  • 45 per cent of businesses said their commercial insurance increased.
  • 36 per cent have seen their transaction fees increase.

Seventy per cent of respondents said they were in favour of mandatory vaccinations in the workplace. That’s a reassuringly high number of business owners thinking about the health of their customers – but 30 per cent is a sizeable minority.

The numbers broke the same way when businesses were asked if they supported a vaccine passport, which was briefly discussed in August but will be introduced shortly.

There’s no easy way out of the pandemic – for small business or anyone else. But 65 per cent of respondents would like to see their government loans forgiven to help them crawl out of the hole they dug over the past 18 months. That’s probably as likely as the organization’s other suggested solution – getting people back to work and out of their houses.

I’m only a sample size of one, but an office does sound nice. There may be hope yet.