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HomeNewsCanadian NewsWarning Signs: Business Insolvencies Jump 41%, Report Highlights Looming Threats.

Warning Signs: Business Insolvencies Jump 41%, Report Highlights Looming Threats.

Warning Signs

Equifax’s Quarterly Business Credit Trends Report revealed that business insolvencies increased by over 40% in Q4 2024, and could potentially rise further as many businesses struggle to repay pandemic loans. The number of businesses missing credit payments also increased by 14.3% in the same quarter.

Equifax Canada has reported a 30.3 per cent surge in insolvencies since 2019, highlighting the financial pressures faced by businesses.

The data is in line with a Canadian Federation of Independent Business report, which found that insolvencies climbed 129.3% in January compared to the previous year, driven by labor shortages, higher costs, and high-interest rates.

Strategic financial planning and proactive measures are needed to manage debt and adapt to changing market conditions.

CEBA Loans Add Pressure

Equifax reports that Canada Emergency Business Account (CEBA) loans, which were offered to pandemic-impacted businesses up to $60,000, have been repaid due to increased pressure.

The loans were due by Jan. 19, 2024, and those who missed the deadline would have their loans converted into a three-year term loan with a 5% interest rate.

Canadian businesses are facing economic pressures due to the end of the initial grace period for CEBA loans, high input costs, labor expenses, a slowdown in consumer spending, and high-interest rates. In January, 25% of nearly 900,000 CEBA recipients missed the deadline.

Simon Gaudreault, the CFIB’s chief economist, previously called the CEBA loan repayment deadline the “straw that broke the camel’s back” for many Canadian businesses.

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Unilever (UL) stock rose over 3% before market open as investors welcomed the consumer goods giant’s restructuring plan to spin off its ice cream division and reduce 7.5K jobs worldwide. The firm said its board chose to separate the ice cream segment because its operating strategy was substantially different and would best suit future growth. The ice cream company, which includes Magnum and Ben & Jerry’s, earned €7.9B in 2023. Unilever (UL) also announced a “productivity program” that would entail job cutbacks and save €800M over three years.

Unilever (UL) stock rose over 3% before market open as investors welcomed the consumer goods giant’s restructuring plan to spin off its ice cream division and reduce 7.5K jobs worldwide. The firm said its board chose to separate the ice cream segment because its operating strategy was substantially different and would best suit future growth. The ice cream company, which includes Magnum and Ben & Jerry’s, earned €7.9B in 2023. Unilever (UL) also announced a “productivity program” that would entail job cutbacks and save €800M over three years.

Unilever (UL) stock rose over 3% before market open as investors welcomed the consumer goods giant’s restructuring plan to spin off its ice cream division and reduce 7.5K jobs worldwide. The firm said its board chose to separate the ice cream segment because its operating strategy was substantially different and would best suit future growth. The ice cream company, which includes Magnum and Ben & Jerry’s, earned €7.9B in 2023. Unilever (UL) also announced a “productivity program” that would entail job cutbacks and save €800M over three years.

Unilever (UL) stock rose over 3% before market open as investors welcomed the consumer goods giant’s restructuring plan to spin off its ice cream division and reduce 7.5K jobs worldwide. The firm said its board chose to separate the ice cream segment because its operating strategy was substantially different and would best suit future growth. The ice cream company, which includes Magnum and Ben & Jerry’s, earned €7.9B in 2023. Unilever (UL) also announced a “productivity program” that would entail job cutbacks and save €800M over three years.

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