[ad_1]
– Businesses are feeling the pressure Loan repayments, bankruptcies and delinquencies –
Equifax Canadian Market Trends — Q4 2023 Quarterly Corporate Credit Trends Report
TORONTO, March 19, 2024 (Globe Newswire) — Many Canadian businesses face an uphill battle, as evidenced by a 41.4% jump in corporate bankruptcies in 2023 compared to 2022. Masu. Latest data from Equifax® Canada’s Market Pulse Quarterly Business Credit Trends Report also notes a 14.3% increase in the number of businesses that are delinquent on their credit products (Q4 2023 vs. Q4 2022).
One of the major contributors to this increased stress is repaying Canada Emergency Business Account (CEBA) loans. As CEBA loan repayment deadlines have passed, many businesses are facing the financial burden of monthly payments with rising interest rates. This is in contrast to the initial interest-free, no-monthly payment terms. On January 19, 2024, the CEBA loan was converted to a three-year term loan paying 5% interest per year.
“Canadian businesses are facing a perfect storm of economic pressures,” says Jeff Brown, head of commercial solutions at Equifax Canada. “The end of the first grace period for CEBA loans, combined with high input costs, high labor costs, slowing consumer spending and high interest rates, are creating a difficult environment.”
“These factors are contributing to the increasing trend of business failures,” Brown continues. “The sharp increase in the number of bankruptcies, representing a 30.3% jump since 2019, highlights the financial pressures businesses are facing. Manage and transform debt through strategic financial planning and proactive measures. We need to adapt to market conditions.”
Total missed payments
Delinquencies across corporate credit accounts continue to increase, with account-level delinquencies increasing in industrial and financial transactions. In the fourth quarter of 2023, industrial trading saw his 30+ day account level delinquencies increase by 8.8% to reach 11.2%. Financial transactions increased by 3.3% from 3.1%.
The delinquency rate of installment loans has increased significantly, with early-stage delinquencies reported to have increased by 12.5% year-on-year and late-stage delinquencies by 16.3%, indicating that businesses are struggling to make monthly loan payments. was suggested. Delinquencies of revolving credit (cards and lines of credit) of 30 days or more increased by 1.3% year-on-year, reaching 3.2% in the fourth quarter of 2023. The real estate, rental, leasing, and retail industries also experienced significant increases in outstanding payments.
The provinces with the highest financial trade delinquency rates were Alberta (3%), Ontario (2.9%) and Quebec (2.6%), with Quebec also experiencing the largest increase from 2.4% to 2.6% year-on-year. ing. Serious (>90 days) delinquency rate.
Reported financial transaction balances continued to grow, reaching $31.8 billion in the fourth quarter of 2023, an annual increase of 7.4%, primarily due to a 15.3% increase in credit card balances.
Demand for credit continues
Despite slowing inflationary pressures, new credit growth remains constrained, with lending activity constrained by high interest rates and stricter lending standards. This is evidenced by the significant decrease in new transactions compared to the previous year, both in financial transactions (-24.4%) and industrial transactions (-15.3%). However, despite the decline in lending activity, demand for credit among businesses remains strong, as reflected in a 5.5% increase in credit inquiries.
“New credit demand may be showing signs of growth and expansion, as new business formations increased by 21.9% in the fourth quarter of 2023 compared to the same period in 2022.” Brown says. “As always, we will be monitoring this closely and provide insight We help businesses respond to evolving market conditions. ”
About Equifax
At Equifax (NYSE: EFX), we believe that knowledge drives progress. As a global data, analytics and technology company, we play an important role in the global economy by helping financial institutions, businesses, employers and governments make critical decisions with more confidence. . Our unique combination of differentiated data, analytics, and cloud technology provides insights and enables decisions that move people forward. Headquartered in Atlanta and supported by approximately 15,000 employees worldwide, Equifax operates or invests in 24 countries in North America, Latin America, Europe, and Asia Pacific. For more information, please visit: Equifax.ca.
contact:
Andrew Findlater
Select public relations
afindlater@selectpr.ca
(647) 444-1197
Angie Andich
Equifax For Canadian Media Members
MediaRelations@equifax.com
[ad_2]
Source link
