BDC snows the Senate part 4

If you are any good at math, I invite you to help me with something that appeared in The Senate of Canada’s Standing Committee on Banking, Trade and Commerce (“BTC”) BDC report. According to page 8 of the BTC Committee report:

“BDC provided $2.7 billion in additional lending to 14,000 SMEs [during the recent recession]. This lending was for specific projects and for working capital. Most of these trasactions were referred to the BDC by private-setor financial institutions.”

According to BDC’s 2010 annual report, BDC had 28,331 loan clients as of the end of March 2010, and another 346 subdebt clients. In 2008, prior to the recession and all of the special government programs designed to weather the storm, BDC had 27,418 loan clients.

I can buy the idea that 14,000 SME’s took on an additional $2.7 billion of loans from BDC in the four or six quarters that were the recession. 14,000 names represents about half of BDC’s client base, and they’d be a natural crowd to take down additional capital. At least that’s what one would assume from BDC’s own financial disclosure (2010 annual report pg 114).

What I can’t understand is how “most” of those 14,000 specific deals were referred to the BDC by banks. BDC’s total loan client base only grew by 913 companies (3.3%) in the two year period leading up to March 2010 (the end date for the most recent financial statements). Did BDC churn 13,000 clients during that period and add an equal number of new ones? Of course not.

I understand why BDC wanted the Senate to believe it plays nice with the big players in the private sector, but the stats don’t compute.

MRM