A Study on Canadian Small Businesses and Bank Financial Assistance

This report presents a research project focused on the financial challenges faced by small businesses in Canada when seeking assistance from banks. The introduction highlights the significant role of small businesses in the Canadian economy and the difficulties they encounter in accessing external financing. The report defines the research problem, which is the higher variance in survival, growth, and profitability of small businesses compared to larger institutions due to financial constraints. The research question investigates the specific problems small businesses face in obtaining financial aid from Canadian banks. The study aims to explore these challenges and identify factors hindering small business growth and development. The literature review covers existing research on financial support for small businesses, emphasizing the importance of external financing for their survival, growth, and competitiveness. The methodology section outlines the feasibility of the study, data collection methods (interviews and focus groups), and the use of primary and secondary research. The report also includes a time frame for the research project and a list of references.

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Table of content
Table of content..........................................................................................................................................2
A study on the problems being faced by small business while undertaking financial assistance by
Canadian banks.......................................................................................................................................3
Introduction.............................................................................................................................................3
Statement of the problem.......................................................................................................................4
Research question...................................................................................................................................4
Hypothesis...............................................................................................................................................4
Aim..........................................................................................................................................................4
Objectives................................................................................................................................................5
Primary objective.................................................................................................................................5
Secondary objective............................................................................................................................5
Literature review.....................................................................................................................................5
The feasibility of the study and explain how you can gain access to the data that you need to collect. .7
The feasibility of the research.............................................................................................................7
Method of collecting data...................................................................................................................7
The primary method of data collection...............................................................................................7
Secondary research.............................................................................................................................8
Results and discussion.............................................................................................................................8
Time frame for the research project...........................................................................................................9
References.................................................................................................................................................10
Appendix...................................................................................................................................................12

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A study on the problems being faced by small business while undertaking financial
assistance by Canadian banks
Introduction
Small businesses accounts for 60-70% for all available jobs in developed countries like Japan,
Italy and Canada. According to (Maleka, Kambuwa & Karodia, 2015). small business
approximated 420-510 million of informal and formal, micro, medium and small enterprises
located in both developed and developing states worldwide. These businesses play a key role in
the world economy since they contribute in generating jobs and employment opportunities
especially in developing countries (Humphries, Burns & Tanaka, 2015). Nevertheless, small
businesses are faced with some huge financing difficulties than large business organizations by
the fact that they access less external finances, a high cost of transactions and high-risk premium.
Every year, the owners of small businesses list the financial support as one of their key problem
affecting the future of their organizations (La Porta & Shleifer, 2014).
Almost all Canadian small business organizations depend on informal finance sources like loans,
individual financing, family and friends to run their activities. The motive for this research was
guided by the fact that there is a provision and availability of financial resources is the main
thing for the continuous growth of small businesses in Canada (du, Kocabacak & Güven, 2013).
Small business organizations require these resources to bridge the cash flow challenges in
making their investments (Vezzadini, 2017). Yet many new and small business experience
difficulties while trying to gain access to finance assistance from various Canadian banks.

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Statement of the problem
The higher variance in the survival, growth and profitability of small businesses when compared
to larger business institutions ca be credited to certain issues in financing. The challenges within
financing may differ depending on the nature of business whether a growing, a new business,
growing rapidly or slowly (Haggblade, Hazell & Reardon, 2010). Just like other states, Canada
focuses on supply and demand side. In the case of demand, commercial banks are encouraged to
offer financial support to small business organizations. The financial assistance which banks
should offer are like innovation, capital, and microfinance fund. Yet the small businesses are still
facing many constraints while trying to access the financial assistance from different banks in
Canada (Brinckmann, Grichnik & Kapsa,2010).
Research question
1. What are the problem facing the small business organizations while trying to get finance
assistance in banks of Canada?
Hypothesis
1. The small businesses face a lot of challenges while trying to seek financial support from
Canadian banks.
2. Many banks in Canada are not willing to support small enterprises.
Aim
The main purpose of this study is to investigate the challenges that are faced by small businesses
while undertaking financial assistance from banks of Canada.

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Objectives
Primary objective
To investigate the challenges faced by the small businesses while undertaking financial help
from Canadian banks.
Secondary objective
To study the aspects that hinder the growth and development of small businesses in Canada.
Literature review
Access to financial support by small business organizations has been a key subject in policy
making globally for many years. The argument of accessing the financial assistance by small
enterprises in Canada is debated in every seminars and conferences. The argument happens for
the sake of enhancing stability of small skill traders to integrate their support in economy. Such
arguments are triggered by the fact that finance is a crucial thing that determines survival and
growth of small businesses (Jasra, Hunjra, Rehman, Azam & Khan, 2011). Acquiring financial
support gives the small businesses an opportunity of undertaking investments hence contributing
to the states economy and help to alleviate poverty. Therefore, external financial assistance for
small businesses is important in boosting the start-up organizations. Additionally, without these
finances the small business organizations will never be in a position to expand, compete in the
international trade, and striking connections with the large business organizations. Hence,
financial assistance is the key issue for the expansion of small businesses (Fadahunsi, 2012).
In the case of Canada, the small business organizations are those with less than ten workers and
according to Wilson, (2012) the majority of businesses are owned by young entrepreneurs. These

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small firms offer diversification, employment, innovation and contribute in greater levels in
market competition. Therefore, the Canadian government is required to engage on appropriate
strategies to eliminate the difficulties faced by the small business owners while undertaking the
financial assistance from banks. This same case has been witnessed in other developed countries
like Brazil and United Kingdom where most formal firms and jobs are owned by the young
entrepreneurs (Bushee, Core, Guay & Hamm, 2010).
The research conducted recently, indicated that only small percentage of small businesses were
financed via banks. That means the small enterprises use other alternatives for both working
capital and investment (Belleflamme, Lambert & Schwienbacher, 2010). Many small business
organizations acquire financial support through family funds, friends support and own savings
since accessing financial assistance from banks is very difficult. Other institutions that finance
the small-scale traders are non-banking organizations and non-governmental banks. Non-banking
and non-governmental institutions mostly focus on other sectors like small-scale agricultural
firms (Garcia & Aguilera, 2014).
These challenges prevent the small businesses from operating their organizations efficiently and
effectively. One of the reasons being the high cost of finance products. The challenges
encountered by small businesses limits the provisions of finance commodities. Such constraints
are linked to inadequate financial plan, insufficient account documentation, high interest rates
and lack of collaterals (Bruneel, Ratinho, Clarysse & Groen, 2012).
Canadian government for many years has focused on the demand side which encourage the
banks to offer financial support to small business owners. The financial support should be
offered through the guarantors and also affordable. Yet, new and small businesses are still facing
the constraints to access the bank finance support. That calls for an improvement banking

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financial procedure as it is required to practice appropriate mechanisms for the purpose of
assisting small enterprises financially. Thus, this study will focus on researching on problems
faced by the small businesses in Canada while accessing bank financial support. This
investigation will establish a ground on how to deal with these issues to decrease the rate at
which small enterprises are collapsing.
The feasibility of the study and explain how you can gain access to the data that you need
to collect
The feasibility of the research
It’s expected that this research will be based on interviews and written materials thus much time
will be required to gather the information and also to seek the permission from the individuals
who will be involved in the interview.
Method of collecting data
There are various methods that can be used in gathering data a research project. However, this
research will employ secondary and primary research methods. Various measures shall be
adhered to ensure the data collected is relevant to the study. The technique will focus on a wide
perspective but will be narrowed down to the investigation of the issues concerning the small
businesses in Canada (Collis & Hussey, 2013).
The primary method of data collection
The primary technique of gathering the information will focus on first hand data about the
problems faced by the small-scale business owners. In this incidence, as a researcher, I will want
to analyze the issue facing the small businesses in Canada using the following approaches;

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The interview
The interviews will be carried out on samples of small scale traders operating on the five major
towns in Canada. They will be approached and asked questions related to problems faced when
seeking the financial assistance from the banks. The interview will involve the use of a
questionnaire but before that, they will be informed prior on various trends in business so that
they can feel relaxed while giving the information (Appendix 1).
The focus groups
The focus of group will be the next technique of collecting information. Different groups will be
established to debate on trends within small business organizations. These groups shall be
constituted of five business Individuals in small business organizations. This will assist in
collecting data on directions of the small business which will be critical while giving
recommendation for the research (Appendix 1).
Secondary research
A lot of materials can be found in school and online libraries and they will be used in collecting
the data. These are the materials prepared by business and trade professionals. The key area of
focus remains to be Canada but the research will go deeper in comprehending with various
review journal and academic resources. Other than the research articles and books, the study will
use the government materials that will provide the trends and policies of small business in the
country.
Results and discussion
The finding from interviews and other secondary materials will be analyzed by comparing it with
professional academic resources on business. Then they will be discussed through various sub

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headings. These heading will be structured according to their importance towards the objective
of this study
Time frame for the research project
This research will be conducted within the timeframe below. However, the time may deviate
depending on the availability of the resources and issue of the permission by both the university
and the individuals to be involved in the interview.
Activities week
1
Wee
k 2
Week
3
Week
4
Wee
k 5
Week
6
Week
7
Week
8
Developing research topic
Developing the objectives
and research questions
Wring the literature review
Developing the methodology
Formulating the
questionnaire
Seeking the permission from
the institutions
Carrying out the interview
Analyzing the findings
Writing the report
Report submission

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References
?endo? du, A.A., Kocabacak, A. & Güven, ?. (2013) ‘The Relationship between Human
Resource Management Practices and Organizational Commitment: A Field Study’. Social
and Behavioral Sciences, VOL.99, pp. 818-827
Belleflamme, P., Lambert, T., & Schwienbacher, A. (2010, June). Crowdfunding: An industrial
organization perspective. In Prepared for the workshop Digital Business Models:
Understanding Strategies’, held in Paris on June (pp. 25-26).
Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the
castle? A meta-analysis on contextual factors impacting the business planning–
performance relationship in small firms. Journal of business Venturing, VOL.25(1), 24-
40.
Bruneel, J., Ratinho, T., Clarysse, B., & Groen, A. (2012). The Evolution of Business Incubators:
Comparing demand and supply of business incubation services across different incubator
generations. Technovation, VOL.32(2), 110-121.
Bushee, B. J., Core, J. E., Guay, W., & Hamm, S. J. (2010). The role of the business press as an
information intermediary. Journal of Accounting Research, VOL.48(1), 1-19.
Collis, J., & Hussey, R. (2013). Business research: A practical guide for undergraduate and
postgraduate students. Macmillan International Higher Education.
Fadahunsi, A. (2012). The growth of small businesses: Towards a research agenda. American
Journal of Economics and Business Administration, VOL.4(1), 105.

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Garcia-Castro, R., & Aguilera, R. V. (2014). Family involvement in business and financial
performance: A set-theoretic cross-national inquiry. Journal of Family Business Strategy,
VOL.5(1), 85-96.
Haggblade, S., Hazell, P., & Reardon, T. (2010). The rural non-farm economy: Prospects for
growth and poverty reduction. World development, VOL.38(10), 1429-1441.
Humphries, S. C., Burns, A., & Tanaka, T. (2015). “My head became blank and I couldn’t
speak”: Classroom factors that influence English speaking. The Asian Journal of Applied
Linguistics, VOL.2(3), 164-175.
Jasra, J., Hunjra, A. I., Rehman, A. U., Azam, R. I., & Khan, M. A. (2011). Determinants of
business success of small and medium enterprises. International Journal of Business and
Social Science, VOL.2(20).
La Porta, R., & Shleifer, A. (2014). Informality and development. Journal of Economic
Perspectives, VOL.28(3), 109-26.
Maleka, N. K., Kambuwa, M., & Karodia, A. M. (2015). Assessing Organisational Culture
Management and Its Impact on Performance at Sew Eurodrive (SA). Nigerian Chapter of
Arabian Journal of Business and Management Review, VOL.62(2154), 1-27.
Vezzadini, E. (2017). ‘An Uphill Job Demanding Limitless Patience’. The Establishment of
Trade Unions and the Conflicts of Development in Sudan, 1946-1952. International
Development Policy| Revue internationale de politique de développement, VOL.8(8), 81-
108.
Wilson, T. A. (2012). Supporting social enterprises to support vulnerable consumers: the
example of community development finance institutions and financial exclusion. Journal
of Consumer Policy, VOL.35(2), 197-213.

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Appendix
Appendix 1
Questionnaire
Questions
1. How would you rate your satisfactions with financial assistance of the Canadian banks?
Satisfied
Average satisfied
Strongly satisfied
2. How often are you to recommend the small business owners to seek financial assistance
from banks of Canada?
Likely
Unlikely
Neutral
3. When was the last time you went for Financial assistance from the Canadian banks this
year?

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Last 2 months
Between 3-5 months
Never
4. Will you continue seeking financial help from the banks of Canada?
Yes () or No ()
5. What are the procedures involved in loan application? (list them)
6. How can you classify the above listed procedures?
Easier () or Difficult ()
7. With your own opinion, how best do you think the process of obtaining financial help
from the bank can be improved?