Credit stress builds for some SMBs as debt rises and bank delinquencies climb

Equifax Canada Q4 data shows widening divide across sectors and regions

Equifax Canada Market Pulse — Q4 2025 Quarterly Business Credit Trends Release

TORONTO, March 10, 2026 (GLOBE NEWSWIRE) --  New Equifax Canada data shows financial trade delinquencies rose 9.02 per cent year-over-year in Q4 2025 to 3.52 per cent nationally, even as industrial trade delinquencies fell sharply by 25.52 per cent to 4.65 per cent. At the same time, the Canadian Small Business Health Index declined 2.4 per cent year-over-year, signalling weakening resilience as debt loads climb and credit stress becomes more concentrated.

The data points to an uneven environment: many businesses are keeping up with their payments, but a growing number are falling behind on bank-related obligations, such as credit cards and lines of credit.

Financial trades track missed payments on bank loans, business credit cards and lines of credit. Industrial trades measure how consistently businesses pay suppliers and trade partners.

“This appears to be more concentrated pressure,” said Jeff Brown, Head of Commercial Solutions at Equifax Canada. “We’re seeing stabilization in day-to-day supplier payments, but leverage built up over the past two years is weighing on service and rate-sensitive sectors. When stress narrows into specific industries and regions, it can tighten lending conditions and increase the risk of localized business setbacks.”

Ontario Records Highest Financial Credit Stress

Ontario recorded the highest financial trade delinquency rate in the country at 3.88 per cent, up 12.90 per cent year-over-year. Credit pressure was most visible in Real Estate, Rental and Leasing, where delinquencies jumped 24.5 per cent, and in Finance and Insurance, which rose 21.3 per cent.

Prince Edward Island experienced the fastest acceleration nationally, with financial trade delinquencies climbing 32.78 per cent year-over-year.

Quebec stood out as the only province to post a year-over-year decline in financial trade delinquencies, down 1.29 per cent, supported by stronger employment growth and the lowest provincial unemployment rate in the country.

Debt Loads Climb as Businesses Restructure Borrowing

Average business debt rose 16.9 per cent year-over-year to $30,035. Newly established firms under 12 months old drove much of the increase, with balances surging 64 per cent. Despite rising debt levels, the number of businesses missing a payment declined 11.09 per cent year-over-year to 282,257 in Q4 2025.

Credit mix trends suggest restructuring with installment loan balances increasing 21.9 per cent year-over-year to $132,101, while credit card balances declined 5.0 per cent and lines of credit fell 14.7 per cent. Businesses appear to be locking into structured borrowing and pulling back from revolving credit exposure.

Manufacturing Health Improves as Service Sectors Strain

Industrial trades improved nationwide, with manufacturing leading the shift. Manufacturing delinquencies dropped 32.2 per cent year-over-year, and the sector’s health index rose 0.7 per cent annually and 6.1 per cent quarter-over-quarter.

In contrast, service-heavy and interest-sensitive industries continue to experience higher borrowing costs and softer consumer demand.

The , which measures the resilience and outlook of small and medium-sized businesses, showed a drop in business sentiment of 2.4 per cent year-over-year.

“The data indicates that the business climate is no longer rising or falling together, but rather separating - with some businesses improving their cash flow and leverage, while others are showing that they are more exposed to rate sensitivity and consumer softness. Whether thriving or dealing with challenges, businesses across the country are demonstrating their strength as business owners,” concluded Brown.

About Equifax

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Contact:

Andrew Findlater

SELECT Public Relations

(647) 444-1197

Angie Andich

Equifax Canada Media Relations