CIBC poised to face surge in small business loan applications
The Canadian Imperial Bank of Commerce is bracing for a wave of applications from small businesses seeking $ 25 billion in government assistance to fight the coronavirus pandemic.
“They say this pandemic is like a war, where all Canadians prepare for war against the enemy you really cannot see,” CEO Victor Dodig said in an interview. “We are doing the same.”
The head of the country’s fifth-largest lender said there was a “hive of activity” within the bank to prepare for Canada’s next government emergency business account program, which will provide interest-free loans. up to $ 40,000 to small businesses and non-profit organizations.
“We have teams working around the clock to get our digital platform ready, and it’s ready for that,” Dodig said. “We are staffing our contact centers, we have refined our processes, we have reached out to customers to make sure they have direct repositories in place – that they are more digitally oriented, with the digital mind in mind. as we come to this question. , just so they don’t have to wait.
The government program, in coordination with the banks, should be rolled out by mid-April. Dodig said he understood the frustrations of some with the relief efforts not happening quickly enough. “There is always a pressure between time and precision, and I think everyone is wrong on the time side and gets good precision,” he said.
In the United States, a similar program to distribute $ 349 billion in aid to small business owners has encountered a barrage of demands, a lack of clear rules and an overwhelmed system.
Toronto-based CIBC initially expected 150,000 of its small business clients to benefit from the Canadian government’s aid initiative, although Dodig said demand could be higher, reaching as high as 200,000.
The Small Business Relief Plan is the latest in a series of government-led initiatives to help Canadians during a pandemic that has claimed more than 83,000 lives worldwide. CIBC has worked with clients to weather the upheavals, including postponing mortgage payments, lowering credit card rates and extending business credit when needed, Dodig said.
CIBC has deferred payments of $ 30 billion in mortgages, credit cards and lines of credit in personal banking, while some 80,000 credit card customers are receiving a retroactive rate cut to the 15th. March, Dodig said.
Dodig said he was realistic about the future of Canada, the economy and the banks, expecting a period of recession and adjustment before things start to return to normal.
“You’re not going to see this big rebound in the economy,” he said. “You’ll see it sort of goes back to a normal level where things don’t go down 10% and 20%, but we could be on the other side of zero for a few quarters as we go through that. And I think, given what’s going on, that would be a good result. “