Navigating Insolvencies in 2024

About this virtual conference

On March 20, 2024, we hosted a virtual conference focused on navigating insolvencies in the coming year, presented to the Business Development Bank of Canada (BDC). In this insightful session, I had the privilege of interviewing Mr. Maxime Lemerle, the Lead Analyst for Insolvency Research at Allianz-Trade, as we explored the resilience of Canadian entrepreneurs in the aftermath of COVID-19.

As Canadian entrepreneurs look towards expansion in the United States, understanding the evolving economic landscape becomes crucial. With 2024 presenting unique challenges and opportunities, I sought Maxime Lemerle’s expertise to shed light on what Canadian businesses should anticipate, particularly concerning insolvency trends in key export markets like the USA.

Maxime’s Insights on the US Market

Maxime highlighted significant risk factors for Canadian entrepreneurs eyeing the US market, underlining the importance of recognizing the expected shift in insolvency rates. He provided a detailed analysis, indicating that insolvencies in the US are anticipated to surpass 24,000 cases annually. This figure represents a slight increase over the 2016-2020 average but remains comparatively low against the backdrop of historical data. This trend reflects a period of normalization following the Paycheck Protection Program (PPP), which saw USD953 billion in government-guaranteed loans transform into subsidies, aiding firms in building robust financial foundations for post-Covid recovery.

Despite this, the landscape is not without its challenges, especially for Small and Medium-sized Enterprises (SMEs). These entities, characterized by smaller cash reserves and tighter margins, are particularly vulnerable to the adverse impacts of tightening credit conditions and the economic adjustments ahead. Maxime’s analysis underscores the need for heightened vigilance and strategic planning among SMEs navigating the US market.

Conclusion

For Canadian entrepreneurs looking towards the United States, 2024 will demand a keen understanding of market dynamics and insolvency risks. Maxime Lemerle’s insights provide a valuable roadmap for navigating these challenges, highlighting the dual need for caution and proactive strategy. As the US market undergoes its normalization process, Canadian businesses must leverage their agility, closely monitor financial health indicators, and adapt to the shifting economic terrain. Success in this endeavor will not only require an awareness of potential pitfalls but also an ability to seize opportunities in a landscape ripe for the resilient and the prepared.

About this series

This insightful session is part of our ongoing commitment to providing valuable perspectives that can help entrepreneurs and business leaders strategize for the future. For those who missed the earlier sessions, we invite you to review the conference materials available on our website for a comprehensive understanding of this evolving landscape.

For further details

For those looking for further details or who have additional questions, Jocelyn St-Onge from Allianz-Trade Canada and I, Roch Simard, are readily available as resources to assist you.

We extend our gratitude to Maxime Lemerle for his expert analysis, to Véronik Ménard and her team at the BDC for facilitating this important discussion, and to all the participants who joined us for this conference. It’s through these collaborative efforts that we can equip ourselves with the knowledge and tools needed to thrive in the evolving business landscape of 2024 and beyond.