Forecast: New Business Lending for SMEs in Canada

The value of new business lending to SMEs in Canada has shown significant annual fluctuations from 2013 to 2023. In 2023, it stood at 29.05 billion CAD. The years from 2013 to 2023 exhibited periods of growth, most notably in 2017 with a 10.79% increase, and in 2021 with an 8.16% increase, marking periods of recovery and expansion. Conversely, contractions were seen, particularly in 2016 and 2020 with declines of 5.05% and 0.22%, respectively. The compounded annual growth rate (CAGR) over the past five years up to 2023 was 1.33%, indicating moderate overall growth.

Going forward, from 2024 to 2028, an average annual growth rate of 1.64% is forecasted, suggesting a continued but tempered increase in lending levels that are expected to reach 32.22 billion CAD by 2028. This projected 5-year cumulative growth rate stands at 8.49%.

Future trends to watch for include:

• Changes in interest rates and their impact on lending volumes.
• Economic recovery post-pandemic and its influence on SME borrowing needs.
• Emerging financial technologies that may alter traditional lending landscapes.
• Regulatory changes affecting lending policies and SME credit access.