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Study: The Financing of Immigrant-owned Firms in Canada

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Released: 2018-06-18

Access to financial capital is one of the main determinants of business creation and growth. An often-expressed concern is that, as newcomers, immigrants to Western countries have limited access to financial capital, thus hindering their efforts to succeed as entrepreneurs and limiting their contribution to economic growth. Despite this concern, there has been very little research on access to financial capital among immigrant entrepreneurs in Canada.

A new Statistic Canada study addresses this important information gap by examining the financing of small- and medium-sized enterprises (SMEs) with immigrant or Canadian-born owners. Data are from the 2011 and 2014 Survey on Financing and Growth of Small and Medium Enterprises. The study asks two related questions. First, do immigrant and Canadian-born owners of SMEs finance their businesses in different ways? And second, are there indications that immigrant-owned firms face more difficulties accessing financial capital compared to firms with Canadian-born owners?

The study finds that immigrant-owned SMEs sought ongoing financing for expansion, capital acquisition and operating capital less often than SMEs with Canadian-born owners. Immigrant-owned SMEs were less likely to request additional debt financing from formal financial institutions, lease financing and trade credit, and government financing. However, adjusting for differences in owner and firm characteristics, only immigrants who arrived in Canada 20 or more years before the survey year (in contrast with more recent immigrants) were less likely than Canadian-born owners to seek financing.

The approval rates for financing applications were similarly high for SMEs with immigrant and Canadian-born owners. The approval rate for debt financing from formal financial institutions was 77% for immigrant-owned firms, and 82% for firms with Canadian-born owners. After taking into account differences in owner and firm characteristics, these differences were not found to be statistically significant. Only a relatively small difference in the approval rates for lease financing and trade credit between firms with Canadian-born owners and firms owned by more recent immigrants (less than 20 years in Canada) was found to be statistically significant.

There remain some difficulties in discerning whether differences in request and approval rates between immigrants and Canadian-born owners are the result of differences in need, financial literacy, length of relationship with the financial institution, perceived or real risks associated with the business venture, or other factors. An important piece of evidence is the owner's own perceptions of whether obtaining financing is an obstacle to business growth.

The study finds that obtaining financing was the least-often cited obstacle among both immigrant and Canadian-born business owners—behind challenges such as rising costs of inputs, increasing competition, and fluctuations in consumer demand. Just under 17% of Canadian-born owners listed obtaining financing as an obstacle in the 2011 and 2014 surveys, while 18% of immigrant owners did so in the 2011 survey and 20% did in the 2014 survey. After controlling for financial owner characteristics, there is little difference in the way immigrant and Canadian-born business owners view obtaining financing as an obstacle for growth of their firms.


The research paper "The Financing of Immigrant-owned Firms in Canada," part of the Analytical Studies Branch Research Paper Series (Catalogue number11F0019M), is now available.

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For more information contact us (toll-free 1-800-263-1136; 514-283-8300;

To enquire about the concepts, methods or data quality of this release, contact Yuri Ostrovsky (613-614-5911;, Social Analysis and Modelling Division.

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