Canadian businesses are navigating a “two-speed economy” as financial pressures mount, according to Float’s Canadian SMB Financial Outlook 2025 report. The study, which surveyed more than 400 small and medium-sized businesses (SMBs), highlights a widening gap between established businesses investing in growth and younger businesses struggling with financial constraints that keep them stuck in survival mode.
“Access to capital, real-time financial insights and efficient financial systems are critical for businesses to stay competitive. To really be elbows-up, we need bold policy changes and financial solutions that target these newer businesses and empower them to plan strategically without blindspots, long wait times or red tape.”
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While overall business confidence remains stable—dipping only slightly from 87% in Q4 2024 to 86% in Q1 2025—the divide between older, well-established businesses and newer businesses is becoming more pronounced. Experienced SMBs are twice as likely to project 10%+ year-over-year profit growth compared to their younger counterparts, who continue to grapple with limited access to capital and cash flow challenges.
The report also sheds light on the Canadian business response to impending US tariffs and rising operational costs. Although 65% of SMBs expect to be affected by tariffs, a concerning 4 in 10 businesses remain in “wait-and-see” mode—choosing not to adapt their strategies in advance. Top concerns about the impact of tariffs include increased costs when exporting to the US, currency fluctuations and higher prices from US suppliers. At the same time, 7 out of 10 businesses believe expected Bank of Canada rate cuts will have little-to-no impact, signaling that broader economic policy shifts may not provide enough relief.
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“Canadian businesses have consistently proven their resilience, but in today’s economic climate, survival is no longer just about perseverance—it’s about access,” said Andrew Dale, Chief Financial Services Officer at Float. “Access to capital, real-time financial insights and efficient financial systems are critical for businesses to stay competitive. To really be elbows-up, we need bold policy changes and financial solutions that target these newer businesses and empower them to plan strategically—without blindspots, long wait times or red tape.”
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The report also shows a significant portion of businesses still operate with outdated financial reporting tools, with 44% struggling with inefficient processes, 40% lacking a single financial source of truth, and 39% using tools that don’t integrate effectively. The data also indicates that SMBs with poor financial visibility are more likely to increase spending blindly, potentially making risky financial decisions without a clear understanding of their cash flow. This underscores the importance of efficient financial systems in helping Canadian businesses navigate these uncertain times.
To combat these challenges, Float is committed to equipping Canadian businesses with modern financial solutions that provide real-time visibility, seamless integrations, and efficient financial management
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source – businesswire
