The debt load held by Canadian businesses increased for the second straight year in 2005, with larger businesses accounting for more than half the outstanding business debt, Statistics Canada said today.

Commercial suppliers of financing, including banks, finance companies and insurance companies, reported that their Canadian business clients owed them about $411.5 billion, a 10.7% increase from 2004.

The number of business loans also increased by 78,000 to 1.97 million, up 4.1% from 2004; the debt was mainly in the form of loans, mortgages and lines of credit.

Historically low interest rates, rising commodity prices and increased capital investment have spurred business financing requirements.

More than two-thirds of the annual increase in outstanding debt was attributed to businesses with loan authorizations of more than $5 million: their debt load rose 14.3 per cent in 2005, or by about $27 billion.

In contrast, the number of loans among businesses with authorizations of less than $1 million — generally small-and medium-sized enterprises — increased only 4.3% in 2005, while their outstanding debt was $100.8 billion.