BDC says business remains optimistic
Trade jitters not deterring investment
TORONTO • Canadian entrepreneurs are nervous about a creeping trade war with the United States, but Michael Denham, CEO of the Business Development Bank of Canada, said that optimism and investment remain high.
Denham said that as BDC surveys entrepreneurs in Canada, they’re hearing nervousness about the economy, but also a lot of excitement and momentum.
“We’re just in the market now conducting a fresh survey, and what we’re finding is that there is obviously a lot of nervousness around all the discussions on tariffs, NAFTA, trade, et cetera,” he said, adding that there’s optimism despite all that.
“Over 50 per cent of the folks we’re talking to plan on investing more in the next six months.
“Over half anticipate sales increases over the next six months.”
BDC released its annual report on Thursday, which included a big jump in net income, but as a Crown agency mandated to support Canadian entrepreneurs, Denham brushed aside the profits.
“It’s not an end in itself. It’s not why we’re here,” Denham said of the $818 million in net income, up from $464.8 million last year.
“But it’s a very important means to an end, because it’s that profitability, that performance that we put into our balance sheet, that allows us to do more.”
Of that $818 million, BDC is returning $69.7 million to the federal government, and the rest will be reinvested.
But Denham was more interested in talking about the 56,000 clients that BDC served last year, and how the Crown agency is trying to make its services as frictionless as possible.
“You can go online now and get a loan from BDC for up to $100,000 in relatively short order with our standard rates and terms and conditions. Our account managers are now equipped to authorize loans on their iPads when visiting their clients,” Denham said.
“Entrepreneurs are super busy. And the last thing I want is for entrepreneurs to kind of waste time doing business with us.”
BDC bills itself as the only bank exclusively devoted to entrepreneurs, and Denham said he sees the bank’s performance as a broader indicator of how entrepreneurs are doing in the country.
The jump in profits, he said, came partially from the bank’s venture capital investments.
“We’re Canada’s most active venture capital investor,” he said. “We’ve got, I think, about 650 or 700 companies that we’re invested in directly or indirectly. So in many ways, our financial performance is a bit of a proxy for how the VC market generally is doing.”
Denham said that the venture capital scene in Canada is a lot stronger than it once was, but he still sees “significant gaps” for BDC to focus on — especially laterstage equity funding, and certain emerging industries including agricultural tech, protein tech and oceans tech.
“We’re in the process of adapting certain elements of our VC strategy,” Denham said. “We’ll have more to say on this as we get into the fall.”
BDC is also driving a big push to support women entrepreneurs. Over the past three years, the bank set a target of $700 million to invest in majority-owned women’s businesses.
In this year’s annual report, BDC is now doubling that target, to loan majorityowned women’s business $1.4 billion by the end of the 2021 fiscal year.
At the same time, BDC has established a $200 million venture capital fund for women in technology.