Stats Can Study Reveals Immigrant Business Owners Have Equal Opportunity to be Approved as Canadian-Born Owners
Immigrants to Canada looking to start a business are often perceived to be at a disadvantage and to have more difficulty than Canadian-born business owners in accessing capital once they arrive in Canada, but a new report from Statistics Canada shows that’s simply not the case.
This report shows that, although immigrants often seek financing for their businesses at lower rates than their Canadian-born counterparts, they’re approved at roughly the same rate.
Stats Can findings
The Statistics Canada study, released June 18, shows that small and medium-sized businesses with immigrant owners are roughly as likely as businesses with Canadian-born owners to be fully approved for an application for debt or government funding.
In the study, 39 percent of immigrant-owned small and medium-sized businesses applied for funding, as did 46 percent of Canadian-born owners. These numbers show that immigrant-owned businesses apply for financing and capital less often than Canadian-born business owners.
Furthermore, immigrant-owned business that do apply for financing are approved at roughly the same rates as Canadian-born entrepreneurs, according to the study’s findings.
When researchers looked at applications for debt financing, businesses with Canadian-born owners were fully approved 82 percent of the time, while, firms with immigrant owners were fully approved 77 percent of the time. Lease applications showed similar results as 97 percent of applications from Canadian-born owners were approved, while 92 percent of those from immigrant owners were approved.
Trade applications also saw similar results as 99 percent of Canadian-owned businesses received approval, while 97 percent of immigrant-owned businesses were approved.
Immigrants may still face challenges
Although immigrants are often approved for financing and capital for their businesses, the reasons why some are denied financing often differs from why Canadian-born owners are denied.
Statistics Canada found that immigrants are often rejected for reasons such as insufficient collateral, risk, or no credit record.
All in the same boat
Whether Canadian-born or an immigrant, business owners in Canada face some of the same challenges when seeking financing.
The Statistics Canada survey found that both kinds of small and medium-sized business owners face similar issues, such as fluctuations in market demand for their goods, increased competition, and rising costs.
“Taken together, these results suggest that immigrants and Canadian‑born entrepreneurs finance their businesses quite similarly on an on‑going basis,” the study’s authors wrote. “The observed differences are usually marginal.”