Small Business BC has filed for bankruptcy, a month after the federal government announced it would give the not-for-profit $2.7 million.
MNP has been appointed as trustee for the organization, which provided grants and free resources aimed at supporting entrepreneurs and small businesses in the province.
According to a spokesperson for Pacific Economic Development Canada (PacifiCan), nearly $88,000 was disbursed to Small Business BC (SBBC) under its $2.7 million agreement before payments were suspended.
Last year, SBBC told BIV it had distributed more than $20 million in business recovery grants to 19,000 businesses as of 2023.
That year alone, it gave $430,000 to eligible B.C. businesses under SBBC’s Workplace Accessibility Grant and had enrolled 120 companies in its Export Navigator program, according to SBBC’s 2022-23 annual report.
That export program, which was funded by government but managed by SBBC, has been put on hold. It had 13 advisors and was working with 500 clients, according to a source at the program.
SBBC made its bankruptcy filing Dec. 5. It is listed as “permanently closed” on Google, its website is down, its CEO is on leave and some of its employees are looking for work.
SBBC operating costs more than double
Financial statements show that SBBC’s operating budget has more than doubled in the last five years, from $3.34 million in its 2019 fiscal year, to more than $7.04 million in 2023.
The organization’s main programs were largely funded by provincial and federal governments, which last year gave at least $4.6 million to SBBC in 2023 from departments including PacifiCan and B.C.’s Ministry of Jobs, Economic Development and Innovation.
In 2023, SBBC had more than $10.6 million in assets, including $9.2 million in internally restricted cash and term deposits.
It ran an operational deficit last year of roughly $38,000, down significantly from a nearly $500,000 operational surplus in 2022.
SBBC isn’t the only organization in the province grappling with challenging financial circumstances.
Small businesses represent 98 per cent of all businesses operating in B.C., according to the federal government, and many are struggling with inflation, lingering supply chain issues, labour constraints and public safety challenges.
Currently, less than a third of B.C. small and medium-sized enterprises consider themselves to be in a good state of business health.
Meanwhile, 97 per cent of small businesses in the province say their cost of doing business has risen over the past five years, according to a 500-respondent survey conducted by the Business Improvement Association of BC (BIABC) earlier this year.
“It’s just creating this perfect storm for our businesses at the moment,” BIABC’s former president Teri Smith told BIV.
—With a file from Adam Campbell
