Le Soir.ca continues its retrospective of the notable news of 2024. The Investissement Québec team was not surprised by the increase in the number of business bankruptcies in Bas-Saint-Laurent, as elsewhere in Quebec, in the last year.
In October, the senior regional director for Quebec East, interim at Investissement Québec, Julie Simard, recalled that businesses were supported by governments during the pandemic and that there was overconsumption after confinement which allowed some, which were in difficulty before the pandemic, to continue for a while.
She believes that the recent cuts in the Bank of Canada’s key rate will soon have positive effects on businesses.
“Difficulties have returned and that is why we have recently seen several bankruptcies. As a large lender, we are involved with a lot of businesses. We are therefore among the creditors in most of the bankruptcies in Bas-Saint-Laurent, such as those of Bois BSL, Distillerie du St.Laurent or Pat BBQ,” indicates Ms. Simard.
As a state corporation, Investissement Québec is involved in business start-up financing with other financial partners, but especially in expansion projects.
No financial capacity
“It’s not that big of a surprise and it’s similar in all regions of Quebec. We are currently experiencing the effects of the post-pandemic. Companies must now be profitable through their own operations. And it is more difficult in certain areas, which means that some companies do not have the financial capacity to continue,” specifies Julie Simard.
The regional director of investment Quebec indicates that bankruptcy is not the preferred option.
“As a lender, we want businesses to continue so that they can be reimbursed. This is why other scenarios are being considered to help companies before bankruptcy. Unfortunately, bankruptcy is inevitable in some cases.”
Towards a revival
Ms. Simard says she is optimistic for the future because of the drop in interest rates.
“Our side as a flexible lender and a more supportive and present lender for businesses remains, whether we are in a period of economic slowdown or prosperity. We are there at all stages of business development and in all economic cycles. It’s not because there is an economic slowdown that we are going to change the way we lend.”
Like all lenders, Investissement Québec must ensure the profitability of a project before financing it.
“We must ensure that businesses will be able to repay their debts, but ultimately, we are not closing sectors of activity because there is an economic slowdown. What we tell our companies is to have more than one financial partner in their financing files for greater security in times of slowdown.”
Before bankruptcy, Investissement Québec offers various solutions such as a capital repayment moratorium or working with lenders to restructure the financing.
“In times of economic downturn, we try to be patient. Each file is different, depending on the degree of the company’s illness. Normally, we try to find solutions with our partners,” says Ms. Simard.
Fewer business start-ups
The director notes that there are fewer business start-ups currently and that start-ups are more difficult to finance.
“These are files that we are analyzing in even more detail and for which we will ensure we have other financial partners.”
Ms. Simard emphasizes that the forestry industry goes through cycles. “There was a crisis in 2008. We were patient with the companies and the crisis eventually passed.”
As for local businesses in the social economy, Julie Simard concedes that it is one of the first sectors affected during an economic slowdown.
“We can find ways to recover our investments differently. Our goal is to help small businesses become medium-sized and medium-sized businesses become large.”
