Businesses' changing credit usage a worrying trend: Equifax

TORONTO — Equifax Canada says new data suggests a significant shift in credit usage among businesses in the first quarter of 2023.

The agency says the latest numbers highlight growing financial stress in the industrial and financial trades, and cast doubt on the stability of the Canadian economy.

Equifax says businesses' total outstanding balance on bank-issued instalment loans declined by 2.4 per cent from the first quarter last year.

However, credit card balances grew by 15 per cent and lines of credit increased by 11 per cent.

Equifax Canada's head of commercial solutions Jeff Brown says in a press release that the decline in installment loans and the shift towards credit card usage could be impeding businesses' growth potential and hindering their ability to make larger investments.

The first quarter also saw a slowdown in new business openings, which Equifax says is a concerning trend.

This report by The Canadian Press was first published June 20, 2023.