There has been a blast in the field of marketing research when many firms launched their own personal researches to determine the neurological factors that are perceived to have a significant impact on how people see the market as it is. Because people have a significant role in keeping these businesses running and safe from bankruptcy, heads of firms are in constant pursuit of satisfying the needs, wants and desires of every prospective customers. However, in the quest of making these possible, they tend to forget that the most valuable answers are offered for free by willing customers.
Canada has a significantly different banking and business borrowing than in the United States. That is primarily driven by the fact that Canada’s banking system is uniquely different. In the U.S., borrowing finance is driven through various entities – which include major ‘ money center banks ‘, Commercial banks, community banks, and what are know as S&L’s or savings and loans. In addition to that, America is densely populated with community banks.
As mentioned above the Canadian banking system is very much different, in that the country has chosen to adopt a more smaller ( by competitor ) banking system that is extremely concentrated and dominated by a handful of major players. All of these banks support the Canadian Small Business Financing program subsidized by the federal government.
Moreover, a decent sized credit union movement in Canada exists. Many of these credit unions are making forays into Commercial banking and financing. However, because of limited resources, many people tend to feel that these credit unions have not yet mounted up either the talent or the capital pool to suitably play in business banking and commercial lending.
To answer this concern, the government introduced legislation to allow foreign banks to lend in Canada. These banks are known technically as ‘ SCHEDULE B ‘ banks, and are referred to as briefcase bankers in that they do not have the large branch networks.
Traditionally, Capital for Canadian firms is much harder to secure in the Canadian banking system. Outside of the aforesaid CSBFL program that is federally underwritten, the banks be likely to secure small business loans with usually up to 100% of personal security. That of course has the customers undertaking personal assets, savings, etc. There certainly are no ‘templates ‘ for fast quick borrowing in the Canadian small business banking.
Furthermore, loan criteria are sensibly adjudicated by underwriters on a case by case basis, and as has been noted, relies heavily on the traditional three C’s of credit: character; capacity; capital.
As the Canadian banks have emerged from the current world economic crisis they do however seem to be placing more focus on smaller firms. On the other hand, larger firms who in many cases do not meet the requirements of the Canadian banks when it comes to significant borrowing requirements, are often required to consider asset based lending arrangements with Canadian and U.S. commercial finance companies who have stepped in to play a role in this vital area. This is true without even considering the span of time that these larger firms had spent in this kind if business and that their balance sheets and income statements do not meet the borrowing requirements of the Canadian loan committees
Indeed, the Canadian banking system is uniquely structured and Canadian business, both large and small, should focus on the unique strengths of the system borrowing and banking needs.