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Business money

Helder Almeida/Getty Images/iStockphoto

Business lending is now growing at a faster clip than consumer lending, according to new figures from the Canadian Bankers Association.

Business lending at Canada's nine largest banks has expanded 35 per cent to $350-billion since the beginning of 2007, the CBA said in the report released Thursday.

Total authorized credit to businesses has grown 29 per cent, to $861-billion from $155-billion.

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"We've seen a real shift in lending from households to businesses," said Marion Wrobel, vice-president of policy and operations at the CBA.

"Throughout the financial crisis and the period of economic recovery, household borrowing provided the foundation for Canada's economic growth, but that changed in late 2012 when the growth rate of business credit surpassed that of household borrowing."

The trend also cuts across sectors, with lending up since 2009 to knowledge-based companies, wholesalers and retailer, agriculture and fishing, natural resources and manufacturing.

Business credit is now growing faster than the average of the past 15 years.

Banks in Canada and the U.S. often have been criticized for not extending enough credit since the recession.

But Mr. Wrobel refutes that, pointing out that at the end of 2012 businesses had more than $500-billion of unused credit.

"Business confidence is gradually improving, and Canadian business are in a better position to take advantage of the growing pool of credit," he said.

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