Bank interest rates in Canada: 2024-2025 opportunities for Quebec SMEs

After a period of sharp rate increases between 2022 and 2023, the landscape of bank interest rates in Canada is changing. For Quebec SMEs, this is not just a risk to manage: it’s also a strategic opportunity to renegotiate, invest and modernize. In 2024, the average interest rate on debt financing for Canadian small businesses fell back to around 7.3% (from 9.0% in 2023), while the Bank of Canada’s key interest rate gradually declined to 3.25% in December 2024.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai)) At the same time, the latest data show that credit conditions remain relatively favorable, with an 89% approval rate for small businesses in 2024.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai))

Against this backdrop, it’s in the best interests of SME managers in Quebec to review their financing strategy: how can they take advantage of the gradual easing of interest rates? What types of projects should be prioritized (automation, digital transformation, e-commerce) to transform a financial cost into a growth lever? This article reviews recent trends in bank interest rates in Canada, their concrete impact on Quebec SMEs, and smart investment opportunities to seize right now.

1. Where do Canadian business interest rates stand in 2024-2025?

Between 2022 and 2023, the Bank of Canada raised its key rate from 0.25% to 5% to combat inflation, resulting in a sharp rise in financing costs for businesses.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai)) This phase of tightening culminated in 2023, with bank prime rates climbing to around 7.2%.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai)) For many SMEs, this meant severe pressure on cash flow, particularly for those holding variable-rate loans.

However, the dynamic was reversed in 2024:

• Declining policy rate: the policy rate gradually fell from 5% to 3.25% between June and December 2024, as inflation approached the 2% target.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai))
• Average interest rates for small businesses: the average rate on debt financing fell to 7.3% in 2024, after peaking at 9.0% in 2023.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai))
• Gradual improvement in business credit: the average interest rate on business credit in Canada reached around 6.5% at the peak of the cycle in May 2024, before falling back below 5% in autumn 2025, reflecting the easing of monetary policy.([theglobaleconomy.com](https://www.theglobaleconomy.com/Canada/business_credit_interest_rate/?utm_source=openai))

For small businesses, recent statistics are encouraging:

• In 2024, approximately 36% of small businesses requested external financing, 9% of which specifically requested debt financing.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai))
• The approval rate for this debt financing was 89%, with 91% of the amounts requested actually authorized.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai))
• In Quebec, the approval rate for small business debt financing was around 87%, for an average authorized amount of approximately $185,000.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/recherche-statistique-pme/fr/enquete-conditions-credit-2024?utm_source=openai))

Another key factor for Quebec SMEs is the Canada Small Business Financing Program (CSBFP).

In short, even if the cost of money remains higher than before 2022, the trend is clearly towards normalization. Companies that know how to anticipate and structure their financing needs may find the context much more favorable than a few years ago.

2. Concrete impacts on Quebec SMEs: risks to manage, opportunities to seize

The rapid rise in rates between 2022 and 2023 has left its mark, particularly on smaller SMEs. A recent BDC study shows that there is a gap of over 6 percentage points between the rates paid by large companies and those paid by small and medium-sized enterprises, part of which is linked to the higher proportion of variable-rate loans among small businesses.([bdc.ca](https://www.bdc.ca/en/about/mediaroom/news-releases/steady-interest-rate-doesnt-equal-steady-businesses?utm_source=openai)) Nearly 47% of % of small SMEs (less than 3 million in sales) are finding it harder to repay their debts today than they did 12 months ago.([bdc.ca](https://www.bdc.ca/en/about/mediaroom/news-releases/steady-interest-rate-doesnt-equal-steady-businesses?utm_source=openai))

For a typical Quebec SME – in services, retail or light manufacturing, for example – the main effects are :

• Increased pressure on cash flow: monthly payments on variable-rate loans have risen, sometimes by hundreds or thousands of dollars a month.
• Slowdown in expansion projects: in the face of uncertainty, many companies have postponed structural investments (equipment upgrades, new branch openings, website or online store redesigns).
• More demanding access to credit: in 2024, 66% of small businesses obtaining debt financing had to post collateral, compared with 46% in 2023, a sign of tighter credit conditions.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/recherche-statistique-pme/fr/tendances-conditions-credit-petites-entreprises-entre-2014-2024?utm_source=openai))

That said, the gradual easing of rates and continued high approval rates are also creating windows of opportunity for Quebec SMEs:

• Renegotiating existing loans: with the gradual fall in the cost of credit, it makes sense to explore refinancing to reduce monthly payments or secure a lower fixed rate.
• Debt consolidation: in 2024, 17% of small businesses that had borrowed intended to use financing for debt consolidation – the highest level in 10 years.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024?utm_source=openai)) For an SME juggling multiple loans, cards and lines of credit, this is an opportunity to simplify the financial structure and improve cash flow visibility.
• Acceleration of digital projects: rather than simply surviving rising rates, some companies are taking advantage of them to invest in high-return levers, such as automation, e-commerce or improving the customer experience via AI.

It’s precisely in these high-return projects that working with a specialized agency like Nuaweb comes into its own: every dollar financed must generate maximum value, whether in additional sales, cost reduction or operational efficiency.

3. Turning high interest rates into a competitive advantage

For most Quebec SMEs, interest rates are not a variable they can control. They can, however, control how they use the capital they borrow. In an environment where the cost of money remains non-negligible, the key is to direct financing towards high value-added projects.

Here are a few concrete examples of where well-structured financing can quickly translate into measurable gains:

• Automate customer relations and after-sales service with AI
  Implementing a virtual assistant or intelligent chatbot on your website enables you to answer common questions 24/7, qualify leads and reduce the load on your team. A well-integrated conversational AI solution, such as those deployed by Nuaweb, can reduce support costs while increasing conversion rates.
• Structure sales with a high-performance CRM
  In times of higher financial costs, every opportunity counts. A good CRM management system enables you to track your prospects, automate follow-up, follow-up at the right time and better forecast sales. The result: a more predictable pipeline and a better ability to honor your financial commitments.
• Develop a robust e-commerce presence
  Interest rates influence your costs, but your sales remain the best shock absorber. A high-performance online store, optimized for conversion and referencing, opens up new markets (elsewhere in Quebec, Canada and internationally) without necessarily increasing your fixed costs at the same rate.
• Modernize your website to improve conversion
  An outdated showcase site can stunt your growth more surely than any interest rate. Investing in the creation of a modern, fast, secure and SEO-optimized website can significantly increase the number of quote requests and online sales, improving your ability to absorb financing costs.

The idea is not to go into debt for debt’s sake, but to consider interest rates as the cost of the opportunity to accelerate your transformation. Even with a rate of around 7% on a business loan, financing a digital project that increases your sales by 15-20% can be highly profitable.

Finally, the current context, marked by still-cautious demand and a lukewarm business climate, is causing many SMEs to freeze their investments. For those who dare to position themselves now, there is a competitive advantage to be gained: being ready when demand picks up again, with a digital infrastructure and internal processes that have already been optimized.

4. How Quebec SMEs can prepare and act now

Taking advantage of current trends in bank interest rates in Canada requires a structured approach. Here’s a four-step action plan for Quebec SMEs:

1. Make a complete inventory of your debts
   List all your loans (bank, margin, card, equipment financing), noting for each: balance, rate, remaining term, type (fixed or variable), collateral. This basic exercise will help you quickly identify the most expensive and riskiest loans.
2. Evaluate refinancing and consolidation options
   With rates gradually falling and programs like the CSBFP continuing to grow in volume (over $1.9 billion in loans in 2024-2025, up 8.1% year-on-year),([ised-isde.canada.ca](https://ised-isde.canada.ca/site/canada-small-business-financing-program/en/overview-and-highlights-2024-25?utm_source=openai)) it may make sense to renegotiate certain loans or consolidate several debts at a more advantageous rate. Talk to your financial institution or advisor to simulate different scenarios.
3. Prioritize high-impact investment projects
   Classify your projects according to their return on investment (ROI) and strategic impact: website improvement, CRM deployment, automation via AI, e-commerce platform development, equipment purchase, etc. Prioritize digital projects that generate recurring revenues or directly reduce your costs.
4. Surround yourself with specialized partners
   Financing decisions make sense when they are aligned with a clear vision of your digital growth. An agency like Nuaweb, specialized in AI, web creation, CRM, e-commerce and video production, can help you transform a simple loan into a real, measurable and optimized growth project.

To maximize the leverage effect of each dollar borrowed, it’s also advisable to set up clear performance indicators (KPIs): customer acquisition cost, site conversion rate, average basket, customer lifetime value (CLV), task automation rate, etc. These indicators will enable you to monitor the impact of your digital investments on your ability to absorb financing costs. These indicators will enable you to concretely monitor the impact of your digital investments on your ability to absorb financing costs.

Conclusion: use interest rates as a lever to transform your SME

The years 2024-2025 mark an important turning point for bank interest rates in Canada. After a cycle of rapid increases, the trend is easing: the key rate is falling, average rates on small business financing are down from their 2023 peak, and public programs like the CSBFP continue to actively support SME credit, including in Quebec.([ised-isde.canada.ca](https://ised-isde.canada.ca/site/canada-small-business-financing-program/en/overview-and-highlights-2024-25?utm_source=openai))

For Quebec SME managers, the question is no longer simply to endure interest rates, but to decide how to use this context to strengthen their position: renegotiate or consolidate the most costly debts, invest in digital transformation, professionalize customer relationship management and develop new online sales channels.

Nuaweb is already supporting many local companies in this transition, combining AI, web creation, CRM, e-commerce and video content to create true growth ecosystems. If you’re thinking of taking advantage of the gradual drop in rates to accelerate your digital projects, let’s talk.

Schedule a free consultation with our team today to assess your investment priorities and build a roadmap tailored to your financial reality: contact Nuaweb.