Problems Faced by Small Businesses in Canada in Financial Assistance

PROBLEMS FACED BY SMALL BUSINESSES IN CANADA IN FINANCIAL
ASSISTANCE
Small Businesses in Canada Face Problems While Undertaking Financial Assistance from
Canadians Banks

PROBLEMS FACED BY SMALL BUSINESSES IN CANADA IN FINANCIAL ASSISTANCE
1
Executive Summary
Canadian Banks are greatly well capitalised in comparison to their peers existing in other nations
and are also better equipped to loan money to a worthy small organisation than they have been
over the past years.
The research question developed intended to explain various issues that are faced by the small
business organisations operating in Canada at the time of undertaking financial assistance from
the Canadian banks.
The individual interview method has been supportive in consideration to the fact that through
following non-probability convenient sampling technique, the managers, employees along with
the small business owners were involved within the interview session.
The research revealed that while the small businesses consider obtaining equity finances from
the Canadian banks they are concerned regarding challenges regarding the time and effort
needed to find the right investor for the business. The investors also tend to impose some
ownerships or controlling interest on the small businesses along with taking part in the business
decisions. This can turn out to be a concern for these Canadian small scale companies.
Based on the study findings recommendations are offered to the small businesses of Canada
regarding development of business angel network that can bring the potential investors along
with the small businesses together with additional benefits. Development of such business angel
networking might have relevant experience along with expertise that can offer advantages in
several small company situations.

PROBLEMS FACED BY SMALL BUSINESSES IN CANADA IN FINANCIAL ASSISTANCE
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Acknowledgement
I feel great pleasure in acknowledging the assistance along with contributions of several other
individuals in contribution to the success of the dissertation. Firstly, I would prefer to thank my
supervisor for her support, ideas along with feedbacks at the time of the proceeds in completing
this dissertation. Devoid of her support and guidance, this dissertation cannot be accomplished
within time. Finally, I would also like to express my gratitude to my peers for their total support
along with encouragement.

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Table of Contents
Chapter 1: Introduction....................................................................................................................6
1.1 Research Background.......................................................................................................6
1.2. Research Problem and Significance.....................................................................................7
1.3. Research Aim and Objectives...............................................................................................8
1.4. Research Questions...............................................................................................................8
Chapter 2: Literature Review.........................................................................................................10
2.1. Introduction.........................................................................................................................10
2.2. Financial Assistances offered By Canadian Banks............................................................10
2.3. Financial Problems Dealt by Small Businesses..................................................................11
2.4. Challenges and Problems Dealt by Small Companies in Attaining Financial Assistance
from Canadian Banks................................................................................................................14
2.5. Solutions to Businesses faced while Undertaking Financial Assistance............................16
2.6. Research Gap......................................................................................................................18
2.7. Theoretical Framework and Hypotheses............................................................................19
Chapter 3: Research Methodology................................................................................................21
3.1. Introduction.........................................................................................................................21
3.2. Research Design, Philosophy and Approach......................................................................21
3.3. Participants and Data Sources............................................................................................22
3.4. Researchers Role................................................................................................................23

PROBLEMS FACED BY SMALL BUSINESSES IN CANADA IN FINANCIAL ASSISTANCE
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3.5. Data Gathering Techniques................................................................................................23
3.6. Data Analysis Method........................................................................................................24
3.7. Trustworthiness of the Method...........................................................................................25
3.8. Summary.............................................................................................................................25
Chapter 4: Presentation of Results.................................................................................................27
4.1. Discussion of Interview with Manager...............................................................................34
4.2. Discussion of Interview with Employee 1..........................................................................34
4.3. Discussion of Interview with Employee 2..........................................................................35
4.4. Discussion of Interview with Owner 1...............................................................................35
4.5. Discussion of Interview with Owner 2...............................................................................35
Chapter 5: Analysis of Data...........................................................................................................36
5.1. Analysis of the Interview Responses Provided by Managers, Employees and Small
Business Owners on Qualitative Questions...............................................................................36
5.1.1. Response for Interview Question 1..............................................................................36
5.1.2. Response for Interview Question 2..............................................................................37
5.1.3. Response for Interview Question 3..............................................................................38
5.2. Findings on Research Question 1: What are the vital issues related with the small
businesses operations while gathering financial assistance from the banks existing within
Canada?......................................................................................................................................39
5.3. Findings on Research Question 2: What are several approaches through which such
challenges can be dealt with in order to obtain a better financial situation?.............................42

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5.4. Findings on Research Question 3: What are the likely effects of such issues that take place
at the time of attaining financial assistance from the banks within Canada?............................44
Chapter 6: Conclusion and Recommendations..............................................................................46
6.1. Conclusion..........................................................................................................................46
6.2. Recommendations and Future Research.............................................................................49
References......................................................................................................................................53
Appendices....................................................................................................................................60
Appendix 1: Ethics Application Form.......................................................................................60
Appendix 2: Banks Offering Financial Assistance to Small and Large Businesses in Canada 63
Appendix 3: Small Business Lending by Canadian Banks over Years.....................................64
Appendix 4: Interview Transcript for Manager.........................................................................64
Appendix 5: Interview Transcript for Employee 1....................................................................65
Appendix 6: Interview Transcript for Employee 2....................................................................66
Appendix 7: Interview Transcript for Owner 1.........................................................................67
Appendix 8: Interview Transcript for Owner 2.........................................................................68

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Chapter 1: Introduction
1.1 Research Background
In the era of highly competitive business environment, it has been revealed that when the
small businesses aim to address needs of a market niche, the necessary amount of capital is quite
complex to attain that can further impact the ability to undertake a project in an effective manner
(Alvesson and Sköldberg 2017). Despite the fact that the banks in Canada have offered sufficient
financial assistance through offering loans to the organisations, still there might be certain
uncertainties related with poor sourcing of credit by the smaller organizations. This can also
impact their capability to sustain within the competitive business surrounding (Bebchuk, Cohen
and Hirst 2017).Canadian Banks are greatly well capitalised in comparison to their peers existing
in other nations and are also better equipped to loan money to a worthy small organisation than
they have been over the past years (Alvesson and Sköldberg 2017). It has also been observed that
the financial position for all the Canadian small businesses is also observed to be improving.
Considering same, it has also been evident that the business insolvencies are decreased by 17%
in the year end in comparison to the previous year (Bebchuk, Cohen and Hirst 2017).More than
70% of the small business owners are evidenced to fail in their 10th year of business and around
20% of small business fail in the first year of their business surrounding (Bebchuk, Cohen and
Hirst 2017). Certain small businesses in Canada are likely to face difficulties whole seeking
funds from the banks existing within Canada. This is evident for the reason that while the
established businesses find it to be considerably simple to raise finance, the small companies
operating within Canada find it greatly difficult in raising finance for all their operational
activities. For instance, consumer service applications such as Zebdesk faced the issue of initial

PROBLEMS FACED BY SMALL BUSINESSES IN CANADA IN FINANCIAL ASSISTANCE
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undercapitalisation. There are several factors that are responsible for the financial problems
faced by the small businesses in their attempt to raise finance that includes risk, lack of credit
sourcing, absence of enough press coverage, intertwined position, maturity along with interest
rated bias (Becherer and Helms 2016). Certain issues related with equity finance such as absence
of market trust, equity space and absence of exit route causes problems for the small businesses
to attain adequate finds for their business operations for the Canadian banks (Bresler. and Stake
2017). The study is intended to analysevarious issues that are faced by the small business
organisations operating in Canada at the time of undertaking financial support from Canadian
banks.
1.2. Research Problem and Significance
The research subject was analysed because of the associated advantages that can be
obtained from the small businesses along with the overall industry. This research has
significance in identifying several issues which can take place at the time of attaining financial
assistance in the form of loans and financial advices from the banks existing within
Canada(Brigham, Nason and Gessaroli 2016). However, these banks in Canada offer financial
support to large as well as small businesses with the objective of attaining a huge amount of
interest and profit from them. Focused on such research problem, the research has increased
significance in analysing several concerns related with the management of financial support from
the Canadian banks (Brigham, Ehrhardt, Nason and Gessaroli 2016). This can also therefore
enable all the precautionary measures in dealing with the issues faced at the time of gathering
financial support from the banks operating within Canada.
The significance of the research subject is to attain the study objectives of knowledge
acquisition and with the objective of developing solutions required to deal with the financial