I’ve had a front-row seat watching disruption in the small business industry for the past 11 years, from the effect of the crash in oil prices on Alberta’s small businesses to the steady growth of e-commerce to the detriment of brick and mortar retail.
But nothing prepared us for this: COVID-19 has brought an unprecedented disruption to the small businesses that drive our national economy.
Eleven years ago, I founded Merchant Growth, a financial technology company that provides financing for thousands of small businesses across Canada. We use algorithms to automate the approval process and have provided hundreds of millions of dollars in financing to help small businesses grow. With an average loan or advance size of approximately $30,000, these are truly small businesses — restaurants, auto repair shops, retail stores, grocery stores, small manufacturing operations, spas, salons, pharmacies and more.
What we, and these small businesses, are experiencing is a natural disaster, not just a typical financial recession. In an ordinary recession, if a small business owner is forced into bankruptcy because people aren’t spending like they used to, this is considered capitalism. But since COVID-19 is more like a natural disaster, most of us would agree it is not fair for a business to be forced into bankruptcy. The government is mandating that businesses close their doors in the interest of public safety. So how could it be fair for us to let them fail as a result?
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