More Canadian companies are failing to repay their debts, according to a new report.
According to Equifax Canada’s report, overall corporate defaults rose 3.4 per cent in the third quarter compared to the previous quarter, indicating potential challenges in repaying debt.
According to the report, corporate loan demand was down 1.9 percent quarter-on-quarter due to seasonal factors but increased 13.2 percent year-on-year.
Equifax Canada said data shows more existing businesses are seeking loans as the end of the year approaches, which could be a sign of early financial stress.
Jeff Brown, head of commercial solutions at Equifax Canada, says the data points to a change in behavior among businesses, with increasing reliance on existing lines of credit and cards.
Brown says that while this may reflect a cautious approach in response to rising interest rates, it also raises concerns about potential debt burdens.
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