Does your company have the right financial partner to help navigate turbulent economic waters?

In an unsettled economic environment, Canadian small- and medium-sized enterprises (SMEs) are justifiably concerned about charting a way forward through 2023. They may not have the same resources and options that larger businesses possess — but they’re not alone and there are resources and partners that can help them navigate the challenges they currently face, so they can emerge in calmer waters.

“The concerns we’re hearing from our clients include inflation, access to capital, cost of capital, supply chain issues, labour and skills shortages, and sustainability issues,” says Alan Turner, head of commercial banking, HSBC Bank Canada. “While any one or two of these issues may be manageable, compounding them can quickly erase margins and profitability.”

Many SMEs are more vulnerable than their larger counterparts, who possess the size, scale, liquidity, access to cash and pricing power to more easily weather those challenges.

Turner points to tech companies who are already preparing for a leaner year by announcing preemptive layoffs to take the costs out of their businesses.

“That’s not a strategy that all SMEs can typically replicate, because they don’t have the same level of redundancy,” Turner says. “If you’ve gone through significant effort to secure skilled personnel, you can’t simply adjust the size of your workforce. When the labour market is tight, SMEs in Canada would rather redeploy skilled workers than let them go — but that comes at a cost.”

Think creatively about financial services support

While a company can turn to lenders to provide liquidity to bridge a difficult period, Turner invites SMEs to think more creatively about the ways in which a bank can provide support. HSBC Bank Canada, for example, uses a relationship model to remain connected with each of its business clients.

“We provide a professional, dedicated relationship manager on every account and their role is to understand the business,” Turner says. “They want to understand your working capital cycles and help you anticipate business threats and opportunities so they can match the products and services offered by the bank to solve the specific challenges your company faces.”

Expanding market horizons to spur growth

Turner also notes that SMEs can negotiate lacklustre markets by expanding their horizons to provide broader business opportunities. A SME that thinks of itself as a Calgary company, for example, may already have the right stuff to expand to Alberta, Canada or to global markets.

Relationship managers will help to identify those opportunities and then back it up with practical guidance, using their significant experience with a large, international business and financial network.

Global market insights for Canadian SMEs

“We provide our small- and medium-sized clients with actual research and information on how to do business in those markets written and prepared by people who operate in those markets,” Turner says. “An SME can thrive and map out a future with us in a way that’s hard to replicate with other banks.”

HSBC Bank Canada also prides itself on its sophisticated finance solutions, designed to drive efficiencies in working capital by setting the right advance rates and shortening cash cycles to get more cash in the company’s hands in less time.

As global companies continue their drive toward sustainability, it can be challenging for Canadian SMEs to align business strategy and operations with a low-carbon economy.

“A large company can dedicate significant resources to developing and implementing a sophisticated sustainability plan,” Turner says. “But a smaller SME may not possess the capability of assessing its emissions footprint, or even speak the language to describe it.”

HSBC Bank Canada offers clients a Sustainability Tracker that asks the right questions and provides suggestions to support companies on their sustainability journey, turning what may be perceived as an extra burden into a competitive advantage.

Turner notes that Canadian businesses have endured an unusual series of challenges in recent years, but that their resilience has grown as a result.

“No company looks forward to tough periods, but I believe that Canadian SMEs have grown strong enough to take on the challenges ahead,” Turner says. “With the right financial partner and a sense of perspective, I believe we can get through this in good shape.”

To learn more about HSBC Bank Canada, please click here.

This story was created by Content Works, Postmedia’s commercial content division, on behalf of HSBC Bank Canada.