The U.S. has just announced new tariffs on steel and aluminum imports from Canada. While the more widespread proposed tariffs still remain on hold until March 4, these latest developments mean rising costs and supply chain disruptions are on the horizon. If tariffs go into effect, small businesses will feel the squeeze first. Higher costs, disrupted supply chains, and tighter margins mean that businesses need financial tools that move as fast as they do.
So many questions remain. Will tariffs actually happen? Which industries will be hit hardest? And how can your business stay resilient, no matter what?
In this article, we’ll break down what tariffs are, how they might impact Canadian SMBs and, most importantly, the proactive steps your business can take to navigate this period of economic uncertainty. You’ll learn practical strategies to mitigate risks, manage costs and keep your business agile in the face of potential trade disruptions.
What is a tariff?
A tariff is a tax imposed by a government on imported or exported goods. These taxes are used to:
Protect domestic industries
Generate government revenue
Influence international trade policies
In this case, President Trump’s proposed tariffs include a 25% tax on Canadian imported goods heading to the US and a 10% tax on Canadian energy products.
How will proposed US tariffs on Canada impact SMBs?
If these tariffs go into effect, they’ll likely result in:
Higher costs on imported goods and materials
Price increases as businesses offset rising production expenses
Supply chain disruptions, forcing companies to renegotiate with suppliers
Reduced demand for Canadian exports, as US buyers seek domestic alternatives
In the long run, this could lead to more nearshoring, diversified supply chains and a greater focus on local partnerships.
4 ways small businesses can get ready for US tariffs on Canada
Even if tariffs don’t happen, preparation is key. Here’s how Canadian SMBs can stay ahead:
1. Prepare for extended economic uncertainty
Review your expenses and cut non-essential costs. This might include:
At Float, we’re proud to support thousands of Canadian SMBs with financial tools that help them navigate uncertain times. Whether through improved expense management, efficient payment solutions, or financial insights for smarter decision-making, we’re here to ensure your business stays competitive and resilient.
Canadians use credit cards more frequently than any other payment method, and 57% say it’s because of the rewards they get for spending. If the perks are paying off for the average shopper, just imagine what Canadian businesses with more bills and buying power stand to gain from the benefits that come with corporate credit cards.
But not all corporate card programs are created equal. Selecting the right one requires a bit of research—and thankfully, we’ve done the legwork for you.
In this guide, we’ll break down everything you need to know about corporate credit cards in Canada: how they work, the perks and how to choose the best corporate card program for your start-up, scale-up or SMB.
What is a corporate credit card?
A corporate credit card, often called a corporate card or commercial card, is a card issued to employees to manage business expenses. Corporate cards typically offer more features than your average personal credit card, like higher limits, expense tracking, and enhanced reporting tools.
In Canada, the terms “corporate credit card” and “business credit card” are often used interchangeably, but there are a few key differences.
Business credit cards are suited for entrepreneurs, sole proprietors, or small businesses and require a personal credit check and guarantee. Think of these like an extension of your personal credit, where the card owner is held liable for the balance if the business can’t pay.
Corporate credit cards are for businesses with more spending power—like scaling start-ups or SMBs. They typically offer higher spending limits, automated controls and no personal guarantees (meaning you won’t need to risk your personal assets or credit to secure a card for your business).
Corporate cards are issued based on your business’s financial health rather than the applicant’s personal credit. (Note: they may also have other eligibility requirements). The company is responsible for paying the balance in full each month—not the “cardholder” or employee the card is assigned to.
What is a corporate card program?
A corporate card program makes managing your business expenses faster and easier by bringing all credit spending into one place.
Here’s what to think about when building your corporate card program:
1. Issuance and eligibility
Full-time employees who regularly manage expenses—like client lunches, travel or team purchases—can benefit the most. For contractors or temporary staff, set clear guidelines on if and how they can use a card.
2. Types of charges
Spell out exactly what your corporate cards can be used for. Whether it’s travel, software subscriptions or team events, a clear expense policy helps your employees know how to use the card appropriately.
3. Responsibility for payments
With corporate cards, your business handles payments—not the employees. This takes the pressure off your not-so-finance-savvy teammates while giving whoever pays the bills complete visibility and control over spending.
4. Credit limits and policies
Set limits that match the needs of your team. For example, you might have higher limits set for frequent travelers or decision makers. Use tools like category-specific caps or single-use virtual cards for added security and flexibility.
5. Reconciliation
Here’s the best part about corporate cards: you can finally say goodbye to chasing receipts and juggling spreadsheets.
With automated tools, employees can upload receipts instantly, so your finance team can track and approve expenses in real time. For employees, this removes the hassle of out-of-pocket payments and slow reimbursements.
Who offers corporate card programs in Canada?
Traditional banks
Canada’s major banks, such as RBC, TD and Scotiabank provide corporate credit cards that often include features like rewards programs and travel perks. These cards are well-suited for larger enterprises but may come with higher fees, lengthy application processes and less flexibility.
Modern fintech providers
Fintech companies have introduced a new generation of corporate card solutions designed for more flexibility. These programs often prioritize ease of use, offering tools like virtual cards, automated expense tracking, and accounting integrations. Some providers (like Float) focus specifically on Canadian businesses, offering options like CAD and USD card limits with lower fees and faster approval processes.
Types of corporate credit cards
Traditional banks
Canada’s major banks, such as RBC, TD and Scotiabank provide corporate credit cards that often include features like rewards programs and travel perks. These cards are well-suited for larger enterprises but may come with higher fees, lengthy application processes and less flexibility.
Modern fintech providers
Fintech companies have introduced a new generation of corporate card solutions designed for more flexibility. These programs often prioritize ease of use, offering tools like virtual cards, automated expense tracking, and accounting integrations. Some providers (like Float) focus specifically on Canadian businesses, offering corporate card options like CAD and USD card limits with lower fees and faster approval processes.
Types of corporate credit cards
Corporate credit cards
Corporate cards or corporate credit cards are your versatile, all-purpose cards designed to cover a wide range of business expenses and day-to-day operational costs. They’re a great option for businesses looking for a straightforward way to manage spending without focusing on special categories.
Charge cards require the full balance to be paid off at the end of each billing cycle, making them ideal if your business wants to maintain disciplined spending habits. With higher spending limits than traditional credit cards, they’re great if your company is growing or has variable cash flow. If you plan on spending a minimum of $10,000 per month and want to pay it off quickly, a charge card could be for you.
Purchasing cards (P-cards)
P-cards are built for procurement and vendor payments and eliminate the need for traditional purchase orders or invoices. These cards simplify tracking vendor-specific expenses, reduce paperwork and ensure spending stays within your allocated budgets.
Travel and entertainment (T&E) cards
T&E cards are designed for travel-related expenses like flights, hotels, car rentals, and client dinners. They often come with travel perks like discounted rates, travel insurance and airport lounge access, making them handy for sales teams or frequent travelers.
Virtual cards
Perfect for online transactions, virtual cards offer added security and flexibility to your business. These digital-only cards are ideal for managing subscriptions, one-off purchases or vendor payments online.
Using a virtual card platform, your accounting team generates a single-use card customized with a specific spending limit and assigns it to an individual employee or vendor. This limited nature minimizes the risk of fraud and is especially useful for recurring expenses.
Ghost cards are assigned to vendors, projects or departments rather than individuals. They help your business track spending by budget or recurring expenses, offering an easy way to monitor compliance and streamline reconciliation.
Fleet cards
Designed for companies with vehicles, fleet cards manage fuel, maintenance, and other vehicle-related costs. They often include fuel discounts, detailed reporting on mileage and consumption, and tools to track vehicle expenses with ease.
Expense management cards
Expense management cards combine payment functionality with integrated tracking and approval workflows. They can reduce the time your finance team spends on reconciliation by syncing directly with accounting software.
Prepaid corporate cards
Unlike traditional credit cards, prepaid corporate cards require you to load funds onto the card upfront instead of borrowing from a bank. This gives your business more control over expenses while helping you avoid debt. Explore the prepaid business credit card Canada’s businesses love.
Types of corporate credit cards comparison chart
Top 4 benefits of corporate cards
1. Take back time with automated workflows
Corporate cards eliminate the hassle of managing paper receipts and processing reimbursements. With real-time tracking and automated expense reporting, your finance team will save hours on admin.
For start-ups and SMBs operating with lean resources, this means your staff spends less valuable time sorting through expense reports. For mid-market companies, finance teams will appreciate the ease of categorizing expenses without chasing receipts from hundreds of employees each month.
2. Drive smarter decisions with better cash flow
Corporate cards provide better visibility into company spending, allowing you to track it in real time and set individual limits. This is especially beneficial for start-ups and scale-ups diligently managing cash flow in the early stages of growth when budgets can be tight.
3. Save more and earn rewards
Many corporate card programs offer rewards, such as cashback, travel benefits, or discounts on essential services. At Float, we help businesses save an average of 7% on their spend through a combo of rewards like 1% cashback, 4% interest on deposits, no foreign transaction fees with our USD cards and employee time savings. We call that a win.
4. Control your capital by building credit
Building credit is vital for growth. For start-ups, corporate cards grant you access to higher business credit card limits without personal guarantees, creating a strong foundation for future financing opportunities. For larger SMBs and mid-market companies, you can strengthen your credit position to access larger credit lines as you scale.
Risks to be aware of
Security and fraud: Stats show Canadian businesses experience a higher rate of fraud (20%) than Canadian consumers (13%). Make sure to look for features like virtual cards for one-time purchases, transaction alerts and the ability to freeze a card instantly if something seems off.
Compliance headaches: Keeping track of expenses and ensuring they align with tax regulations can get complicated. Automate tracking and reporting to simplify these operations, giving you peace of mind and making tax season less stressful.
Overspending: Without proper limits, it’s easy for spending to spiral. Set clear boundaries with spend limits and restricted categories so you’re always in the driver’s seat.
Confusion: Sometimes, employees simply don’t know the rules. A quick onboarding session or a set of clear expense guidelines can make all the difference and keep everyone on the same page.
When you choose a corporate card program with smart controls and built-in security, you can enjoy all the perks without the headaches.
How to choose the right corporate card
Currency: If your business operates across borders, look for a card that supports CAD and USD spending without high foreign transaction fees. For example, Float avoids conversion fees by linking directly to your CAD or USD bank account, while cards like the RBC Avion Visa Infinite Business focus solely on Canadian spending.
Fees: High annual fees can eat into your budget, so consider whether the benefits outweigh the cost. Float has no annual fees, while traditional cards like the AMEX Business Platinum charge upwards of $799 annually, offering premium travel perks in return.
Rewards: Cashback and point-based systems are common, but the value of these rewards can vary. Float offers unlimited 1% cashback on all spending, while cards like the Scotiabank Momentum for Business Visa provide 3% cashback on specific categories like office supplies.
Features and controls: Real-time expense tracking, virtual cards, and integrations with accounting tools can save your team hours of work. Float excels in this area, offering both physical and virtual cards with spending controls, while traditional banking options focus more on rewards.
The best card for you depends on your goals, spending habits, and priorities. For a detailed breakdown of what’s available, compare Canadian corporate cards here.
Best corporate credit cards in Canada
Choosing the best business credit card Canada offers can help you streamline expenses, earn rewards, and maintain better control over your company’s finances.
Here’s a brief overview of the leading programs to make an informed decision:
Float: Offers no annual fees, unlimited 1% cashback, and advanced expense management tools with up to 7% savings on average.
Keep: Provides higher credit limits, up to 4% cashback rewards, and no fees.
Loop: Allows spending in multiple currencies with no foreign exchange fees.
Selecting the right corporate card comes down to how your business spends and other factors like your industry. For example, a Canadian e-commerce business often purchasing from US suppliers, might prioritize a card that doesn’t charge foreign transaction fees. Or, a marketing agency managing several online ad accounts might prioritize a card that tracks spending per client.
Once you’ve selected a corporate card and have confirmed you meet the qualifications, applying is quick and easy with most providers.
Gather your business info: You’ll need basic details like your company name, location, type, industry, registration documents and financial figures.
Verify identities: Provide ID for key shareholders or decision-makers, as required.
Gather financial documents: Some providers may ask for proof of income or financial statements.
Complete your application: Many fintechs offer online applications, while traditional banks might require more paperwork and in-person appointments. At Float, our fast online application only takes 10 minutes.
Get approved: Approval times vary—some cards are ready in 24 hours (like Float), while others take a few days.
Once approved, you can start issuing cards to employees and using your new corporate card program to simplify spending.
Grow Your Business With Float
Canada’s only finance & corporate cards platform that helps businesses save 7% on their spend.
Start by establishing clear policies that outline which employees will receive cards, set spending limits, and define approved expenses.
Next, take advantage of your provider’s tools to set up spending controls. Features like customizable limits, category restrictions, and virtual cards for one-off purchases help you keep expenses organized and transparent.
Once the program is set up, train your team on how to use it effectively. A quick overview of the guidelines, including how to upload receipts and manage expenses, will set them up for success.
Finally, monitor spending using real-time reporting tools. This allows you to spot trends, adjust limits, and refine your policies to better fit your business as it changes.
Float offers Canadian businesses a smarter, simpler way to manage spending. With no annual fees, unlimited 1% cashback on every dollar spent and tools like real-time tracking and virtual cards, Float puts you in control of your finances.
Unlike traditional corporate credit cards, Float corporate cards provide high spending limits with no personal guarantees, making it easier to grow without the stress of added liability. You’ll also earn 4% interest on funds held in Float and enjoy a seamless onboarding process that gets you started in as little as 24 hours.
Growth Equity at Goldman Sachs Alternatives leads this funding round of over CAD$70M, joined by other prominent investors including OMERS Ventures, FJ Labs, Garage Capital and Teralys.
With the CAD$50M credit facility announced in February 2024—bringing total funding to over CAD$120M in the past year—this investment highlights Float Financial’s significant potential despite economic uncertainty.
Float will use the money to accelerate its product expansion, continue to attract top talent and expand its leadership in the Canadian market coast-to-coast.
TORONTO, Jan 13, 2024 — Float Financial, a business finance platform for Canadian businesses, today announced it has signed a CAD $70 million Series B financing round, which brings its total funds raised in the last 12 months to $120 million. The round is led by Growth Equity at Goldman Sachs Alternatives, with participation from OMERS Ventures, FJ Labs, Teralys and existing investor Garage Capital. Float’s range of business finance products is already trusted by big Canadian brands like Jane Software, LumiQ, Knix and more.
Float brings much-needed change to how Canadian businesses of all sizes spend, save and grow their money with a combination of innovative financial services and software. Since their November 2021 Series A, Float has seen 45x growth in total payment volume (TPV), 50x revenue, 30x increase in assets under management (AUM) and 140x expansion in credit issuance—all while achieving top quartile performance in capital efficiency. Float’s Series B investment round demonstrates its significant potential, with a higher valuation compared to its Series A, despite macroeconomic uncertainty.
In 2024, Float significantly expanded its expense management software and corporate cards offering to streamline how Canadian businesses manage their finances. With the addition of features to automate accounts payable, make reimbursements frictionless and surface real-time insights into company spending, Float helps businesses simplify their financial operations. Float now also offers virtual and physical cards in both CAD and USD, high-yield accounts and next-day fund transfers and payments, providing faster, more flexible alternatives to traditional banking services. The company plans to leverage the new capital to further broaden its product suite, attract top talent and expand its leadership in the Canadian market.
“Our financial system needs to match the speed and ambition of Canadian businesses if we want to thrive locally and compete globally. Float’s mission is simple: cut through the red tape and give businesses the financial tools they need to move faster. To access more opportunities. And to do it all easily, with the click of a button,” said Rob Khazzam, CEO of Float. “Today, 4,000 businesses use Float to manage team spend, earn high-interest on cash reserves and save days of manual reconciliation. This investment will fuel our mission to support thousands more with the financial solutions they need to lead Canada into the future.”
“Float’s impressive growth so early on is a testament to its Canadian focus, customer-centric platform and deeply committed team,” said Clare Greenan, an investor with Growth Equity at Goldman Sachs Alternatives. “We are thrilled to support Float in its next phase of expansion, as it makes innovative business finance solutions more accessible to Canadian businesses.”
In February 2024, Float secured a $50 million credit facility in partnership with Silicon Valley Bank (SVB), a division of First Citizens Bank. Existing venture capital and institutional shareholders from Series A, including Golden Ventures, Susa Ventures, and Tiger Global, demonstrated their confidence in Float’s future by remaining fully invested.
About Float Financial
Float is complete business finance for Canadian companies. We offer modern financial services, powerful software and industry-leading support designed for every company and stage of growth. Our integrated suite of products—including corporate cards, bill pay, expense management and high-yield accounts—gives finance teams everything they need to manage spending and cash flow efficiently, so they can keep pace with the demands of their business. To learn more, visit floatfinancial.com.
About Growth Equity at Goldman Sachs Alternatives
Goldman Sachs (NYSE: GS) is one of the leading investors in alternatives globally, with over $500 billion in assets and more than 30 years of experience. The business invests in the full spectrum of alternatives including private equity, growth equity, private credit, real estate, infrastructure, sustainability, and hedge funds. Clients access these solutions through direct strategies, customized partnerships, and open-architecture programs.
The business is driven by a focus on partnership and shared success with its clients, seeking to deliver long-term investment performance drawing on its global network and deep expertise across industries and markets.
The alternative investments platform is part of Goldman Sachs Asset Management, which delivers investment and advisory services across public and private markets for the world’s leading institutions, financial advisors and individuals. Goldman Sachs has more than $3.1 trillion in assets under supervision globally as of September 30, 2024.
Since 2003, Growth Equity at Goldman Sachs Alternatives has invested over $13 billion in companies led by visionary founders and CEOs. The team focuses on investments in growth stage and technology-driven companies spanning multiple industries, including enterprise technology, financial technology, consumer and healthcare.
Bank of Canada rate cuts are gaining momentum. But is your business ready to make the most of them?
Many follow the Bank of Canada’s decisions closely—individual consumers, business leaders and investors here and abroad—because those decisions affect so many aspects of day-to-day life, from the cost of groceries to mortgage payments to business forecasting. In fact, high interest rates and fees on financial products rank as the second-biggest financial challenge for SMBs in 2024, surpassed only by the burden of high operating costs.
Right now, many are crossing their fingers for another rate cut to bring some relief, freeing up cash flow and injecting a hint of optimism across the country.
But for small- and medium-sized businesses (SMBs) in particular, a Bank of Canada interest rate cut is only as valuable as the strategy in place to capitalize on its benefits. How will a rate cut change your borrowing decisions? What about earning on cash? Where will it boost spending, if at all?
This article explores what a Bank of Canada rate cut is, what it means for SMBs across the three main pillars of money management—borrowing, earning, and spending—and how to strategically leverage lower interest rates to thrive in this next phase of Canada’s economy.
What is a Bank of Canada rate cut?
A Bank of Canada rate cut is a decision by the country’s central bank to lower the overnight interest rate for lending in an effort to keep inflation low, stable and predictable, ideally around 2%. Major banks and other lenders use this as a benchmark rate to set their prime rates, so changes to the Bank of Canada overnight rate cascade through the financial sector rapidly following a rate decision.
Part of the larger monetary policy framework, rate cuts (versus rate hikes) are a response to economic slowdowns, aiming to stimulate growth by making it cheaper to borrow, which in turn encourages spending and investment.
Created in response to the Great Depression in 1934, the Bank of Canada is a crown corporation designed to help maintain Canada’s financial system across five main areas of responsibility:
Monetary policy – set inflation-control target and flexible exchange rate
Financial system – foster stable and efficient financial system, which includes banks, credits unions, markets and clearing/settlement systems
Currency – design, print and distribute money
Funds management – provide services to the Government of Canada
Retail payments supervision – oversee payment service providers, ensuring standards and minimizing risk
Why does the Bank of Canada decide to cut interest rates?
A lot of factors go into deciding if and by how much the Bank of Canada decides to cut interest rates, including economic indicators such as:
inflation rates
employment data
GDP growth
consumer spending
business investment trends
Global economic conditions, currency exchange rates, and financial market stability also play a role in the decision, as well as household debt levels, the housing market and how effective the previous rate changes have been in influencing economic activity. It’s a tricky balancing act between fostering economic growth (good for everyone) without triggering a rise in inflation (very, very bad).
So what does a rate cut indicate about Canada’s economic outlook?
Ultimately, a rate cut is a sign of an economic weakness. It means the Bank of Canada, and by extension the government, believes the economy is suffering from extremely low growth and wants to encourage both consumers and businesses to start spending more.
5 years of rates hikes and rate cuts
Leading up to the pandemic, interest rates saw only minor fluctuations since inflation was relatively stable, especially from 2018 to 2020. But when Covid hit in early 2020, the Bank of Canada cut interest rates to 0.5% because the pandemic caused widespread economic disruption, leading to a sharp decline in consumer spending, business activity and overall economic growth. The drastic rate cut was aimed at stimulating the economy by making borrowing cheaper and encouraging investment and consumption.
The result?
A temporary boost to economic activity and a period of increased liquidity in financial markets. But as the economy began to recover, inflation soared, reaching a multi-decade high of 8.1% in 2022. During this period, the cost of borrowing for businesses hovered around 10%.
Still, the Bank of Canada kept the interest rate hovering just above zero until March of 2022, when they announced their first in a series of back-to-back hikes—sometimes jumping as much as 1% at a time—which carried through to the end of the year and into the beginning of 2023.
The Bank of Canada held steady, at 5.25%, for over a year before inflation fell (and held) closer to the 2% target. June of 2024 saw the first of five rate cuts that year, with another quarter point at the top of 2025. The Bank of Canada also declared an end to quantitative tightening. In simple terms, they’re signaling confidence that inflation is under control and easing restrictive policies on the economy. It’s a way of telling Canadian businesses that now is the time to invest in growth.
Bank of Canada interest rate schedule (2024 & 2025)
The Bank of Canada makes an overnight rate announcement eight times per year, or every six weeks.
The table below shows the scheduled dates for rate announcements in 2024 and 2025.
How does a Bank of Canada rate cut impact Canadian SMBs?
When considering the impact of interest rate cuts on Canadian SMBs, we can focus on three key areas of money management: borrowing, saving, and spending.
Impact on borrowing
Many SMBs have variable interest rates, which means the cost of borrowing money can fluctuate greatly with these Bank of Canada announcements. When a rate cut occurs, the cost of servicing your business’s debt decreases, reducing your debt-related expenses and freeing up capital for other priorities. Lower borrowing costs can make it more appealing to take on new loans for growth initiatives, such as expanding operations, upgrading equipment or hiring additional staff.
Impact on earnings from cash
The flipside of lower borrowing costs is that interest-earning rates also decline, which makes saving cash a relatively less attractive option for businesses. As a result, businesses may opt to allocate funds toward investments or operational expenses rather than parking them in savings accounts that yield minimal returns.
Another consideration is the impact on long-term financial planning. With lower interest rates, you may need to reassess your strategy for building cash reserves, especially if you have relied on interest income as part of your financial cushion over the past few years.
Impact on spending
Rate cuts incentivize businesses to spend more, which means there is generally more money floating (excuse the pun) around in the economy and less being stockpiled for a rainy day/year/decade. For businesses that borrow, a rate cut can translate into greater access to credit and increased funds available for spending on growth initiatives, operational improvements, or day-to-day needs.
Despite the incentives to spend, many Canadian SMBs are still burdened by high expenses leftover from the pandemic-induced inflation. Rising costs for supplies, wages, and other overhead have eaten away at their margins, leaving some businesses hesitant to fully embrace increased spending. “We’ve been able to control the labor line at our stores to avoid uncontrollable bleeding, but really need to build the sales volume back up to get to a healthy margin,” writes one Ontario restaurant owner on an SMB thread on Reddit. “Labor and food cost has been a problem for us the last 18 months as well.”
But that’s not the only reason SMBs are hesitant to pull the spending trigger. There’s also a lack of trust in the government’s ability to manage economic volatility, which adds another layer of caution. Worries about the long-term stability of the economy and future financial imbalances and even unexpected policy reversals run high among business and finance leaders alike.
While rate cuts open up a range of opportunities for growth, SMBs should weigh their decisions carefully before making major changes to any of the above areas of money management.
But wait, there’s more: Increasing gap between loonie and USD
While Canada has implemented several interest rate cuts this year, the US has only made one, creating a growing disparity between the two countries’ interest rates. This gap directly weakens the value of the Canadian dollar (the loonie) against the US dollar.
But why does a weaker loonie matter?
As an export-heavy economy, Canada benefits in some ways from a weaker dollar. It makes Canadian products and services more affordable for Americans, potentially boosting exports. However, this advantage is offset by the looming threat of tariffs, which could make these goods more expensive for US buyers and reduce their appeal.
On the flip side, if your business relies on foreign inputs—whether that’s paying for tools, software, contractors or staff in USD—the weaker loonie can drive up costs significantly. Anything priced in US dollars becomes more expensive, putting additional strain on Canadian SMBs.
Cutting interest rates at three times the pace of the US also reflects a weaker Canadian economy by most objective measures. With a less competitive currency, the loonie becomes less attractive to global investors, further reducing demand and investment in Canada. While this does help exporters, it highlights the broader challenges Canadian SMBs face in navigating a fluctuating economy and an increasingly devalued currency.
7 tips for making the most of a Bank of Canada rate cut
A Bank of Canada rate cut can be a game-changer for SMBs. But making the most of it requires a clear strategy across borrowing, earning and spending—three key areas where thoughtful decisions can drive long-term growth and stability.
Borrowing
A rate cut is the perfect opportunity to revisit your borrowing strategy. Here’s how to make the most of it.
1. Refinance existing debt: If refinancing at a lower rate is an option for your business, take advantage of it. Whether a fixed or variable rate is better depends on your business goals and financial forecasts. Variable rates can be particularly appealing during a rate cut cycle, as they allow you to capitalize on ongoing reductions.
2. Leverage your finance team for borrowing strategies: If you have a Director or VP of Finance, this is their time to shine. They can provide strategic guidance on how to structure debt in a way that aligns with your business growth. Even if your finance team is small, ensure their expertise is focused on strategic tasks like optimizing borrowing decisions—not wasted on manual processes like expense management. A recent Float survey found that half of all Canadian SMBs spend up to 40 valuable hours per month on payments and reconciliation processes. Accounting automation with tools like Float can free up their time to make smarter, data-driven decisions.
Earning
Lower interest rates mean banks and lenders are likely to reduce the interest they pay on earnings. To make the most of your cash reserves, be proactive.
3. Shop for the best rates on cash reserves: Not all financial institutions are created equal. Even though rates will drop across the board, some started with higher baseline rates than others. Look for options with more competitive offerings. For instance, Float Yield is currently offering 4% interest.
4. Involve your controller for strategic earning research: Your controller can help evaluate earnings opportunities by comparing options and identifying accounts or tools that maximize your interest earnings. Like your finance team, their expertise is most valuable when focused on strategic contributions, not tedious administrative tasks (hint: a good time to calculate how much money you can save with software).
Spending
This is the big fish, where you can have the most impact on your business. But it does require a thoughtful approach.
5. Analyze your ROI before increasing spend: Now is the time to evaluate your spending decisions carefully. Create ROI frameworks to identify what’s working well in your business and double down on those areas. For example, where did you see the best returns over the last five wild years? Which products, services, or strategies accelerated your growth? Focus your spending on those proven areas.
6. Invest in high-return areas: Consider whether spending more on specialized talent, operational tools to improve efficiency, or R&D for new product development could generate a strong return. These areas can be game-changers if strategically timed with a rate cut.
7. Be cautious about debt in unproven areas: Avoid piling on debt for areas that don’t have a proven return. This isn’t the time for risky investments or overspending. Use ROI calculators or simple ROI math (gross profit divided by costs) to validate whether a spending decision is worth pursuing.
Even with a small finance team, a CFO or controller can bring a strategic lens to these decisions, helping you allocate resources effectively while steering clear of unnecessary risks. Investing during a rate cut can help your business grow, but only if you prioritize thoughtful, high-ROI opportunities.
A company expense policy is critical for staying on budget, preventing expense fraud and establishing reimbursement processes. At most companies, however, these important documents for an overhaul. Here’s why.
Traditional company expense policies often use unclear wording that’s laden with financial jargon. They can also be tied into complex manual processes that rely on email or even interoffice mail, involve multiple stakeholders and result in meandering paper trails.
For employers and finance departments, these processes come with reduced insight into the company’s current financial standing—and an increased risk of fraud. According to a recent report by the Association of Certified Fraud Examiners (ACFE), companies lose an average of $251,000—and those massive losses can go undetected for up to 18 months.
Traditional reimbursement policies also include a lot of hidden administrative work. Recent reports show that on average, 19% of expense reports contain errors, which costs a business time and money to correct. In fact, annual processing costs can exceed $500,000. That includes the costs of correcting errors—a task that the average business spends more than a staggering 3,000 hours on every year.
What this spending and reimbursement process looks like with a traditional expense policy and manual/paperwork.
But employers aren’t the only ones who lose time and money due to inefficient expense policies. According to Forbes, 2 in 5 employees have had their cash flow impacted by lengthy and inefficient reimbursement processes, which can significantly impact morale, leading to higher employee churn and lower productivity. All of these concerns can be addressed by creating a modern expense policy that’s designed to help companies maintain control over budgets while also driving growth.
But what does a modern expense policy look like?
In this article, we’ll answer key questions like:
What is an expense policy?
What are the benefits of a modern expense policy?
What types of expense policies exist?
What are the key components of a modern expense policy?
How do I create a modern expense policy?
What are the best practices for enforcing company expense policies?
What is an expense policy?
A company expense policy (also known as a reimbursement policy) is a set of clear expense-related guidelines created by the business owner, operator or finance team. The policy outlines which business expenses are eligible for reimbursement, how employees should submit those expenses for approval and the steps to resolve disputes. This kind of policy ensures consistency, transparency and compliance in expense management.
What are the benefits of creating a company expense policy?
When a strong expense policy is in place, everyone wins.
For companies, the benefits can include:
Efficiently controlled company-wide spending
More accurate spending forecasts
Standardized rules for expense management
Fewer non-compliant expenses and a reduced risk of fraud
Less administration time spent evaluating spend requests
For employees, the advantages are:
Access to clear information on what is reimbursable and what is not, so they can make informed decisions quickly
No unnecessary reimbursement delays or refusals
Reduced administrative workload thanks to a clear and streamlined reimbursement process
Increased morale and reduced frustration, improving general engagement and satisfaction
What this process looks like with a modern expense policy and automation.
Overall, an expense policy helps finance departments follow expense management best practices, improves transparency and clarifies expectations.
Key expense policy components
Although company needs and processes differ, several key components appear in most expense reimbursement policies. These include:
Expense categories
These outline the different types of expenses that employees can incur, so they don’t accidentally make a business purchase they can’t be reimbursed for. Categories may include travel, meals, accommodations, or office supplies. (That means Brian’s daily latte habit probably isn’t making the cut).
Spending limits
Each expense category should include clear limits that identify the maximum amount employees can spend without additional approvals. This helps prevent anyone from accidentally over-spending on business expenses.
Reporting and approval
Good expense policies clearly outline the steps employees must follow for expense pre-approval and reporting. This includes access to any required documentation.
Documentation requirements
Listing any supporting documents (like receipts or invoices) that employees will need to submit with their expense reports is a must. When this information isn’t outlined up-front, people are more likely to misplace necessary documents, creating friction when it’s time to submit their report.
Reimbursement procedures
This is a step-by-step outline explaining the process employees need to follow when submitting expense reports. This section also includes information on required forms or software systems.
Non-reimbursable expenses
This component clearly details expenses that are not eligible for reimbursement—for instance, personal expenses, fines or alcohol. (That “team building” round of margaritas won’t be going on the company tab).
Travel and accommodation guidelines
Like many employers, your business may have preferred provider arrangements with flight companies, hotels, rental cars and more. These guidelines provide these details, plus any additional travel-related policies that may impact reimbursement.
Expense audit and compliance
This section explains how expense reports are audited, and explains what can (or will) happen if expenses or reports do not comply with the expense policy.
How to write a company expense policy
Now that you understand the basics of company expense policies, here’s a step-by-step process (with real-world expense policy examples) you can follow to build one of your own.
Once you’ve had time to think through all the components you want to include in your expense policy, we’ve got you covered with our free Expense Policy Template.
Step 1: Gather information
Good expense policies are carefully designed to meet the needs of a company’s culture, industry, and existing processes. That means before you begin building your policy, you’ll need to do a baseline assessment. Take time to consider:
How your budget will impact your expense policy and vice versa
Whether or not there are any specific stipulations you’d like to add to support your mission, values and culture
The needs and desires of your employees (Do they need quick reimbursements? Flexible travel options?)
Remember to include other stakeholders in these considerations. Talk to your company’s financial experts and the employees who are most likely to use this policy to gain a more holistic understanding of how to meet everyone’s needs—and any barriers that might be in the way.
Example:You run a tech start-up where employees travel frequently for networking events. In this scenario, you may want to streamline the expense process by allowing staff to book economy flights without pre-approvals, or fast-tracking reimbursements with automated reimbursement solutions.
Step 2: Define eligible expenses
Every company expense policy needs to explain which expenses are eligible for reimbursement. It should also describe the difference between personal and business expenses so that if an expense is challenged, you have clear wording to fall back on.
At this stage, you’ll also want to decide on other spending parameters, like maximum spending per expense category, or preferred hotel requirements.
Example: You own a travel agency and want to encourage your employees to explore the world so they’re more informed when speaking to clients. You decide to build personal travel expenses into a travel expense policy—but you limit that category to $1,500 per year and stipulate that travellers may only stay at select hotels.
Step 3: Define required documentation
When it comes to reimbursing expenses, it’s critical to collect documentation that supports your employee’s expense report. Consider how you’ve defined eligible expenses, then decide what kind of documentation you’ll need to determine whether or not your spending parameters have been satisfied.
Example: You work for a marketing agency that frequently does business over dinner. If your eligible expenses exclude alcohol and limit meal reimbursements to an average of $100 per attendee, you’ll need to request employees provide receipts that show the name of the restaurant, the date and an itemized list of menu items. You may also want to ask for a brief note explaining the purpose of the dinner and a list of attendees.
Step 4: Develop a pre-approval process
Pre-approvals are an important way to ensure compliance and avoid budgetary issues. However, they can also create barriers in cultures or industries where travel and entertainment is frequent and necessary.
Before you begin this process, consider the needs of your employees and balance those with any budgetary constraints. Then develop a clear process that allows enough flexibility for staff to do their job well, but also reduces budgetary risks.
Turnaround time is a factor to consider as well. If your business receives a last-minute opportunity, you don’t want to bog your employees down with a lengthy pre-approvals process—so consider ways to automate your process for a more streamlined experience. With Float, for example, employees with virtual cards can request top-ups or temporary limit increases. These requests are routed to managers, who get an alert to approve with the tap of a button.
Example: You run a construction company that often needs quick access to specialized equipment like scaffolding. To avoid delays due to pre-approval processing, you decide to allow supervisors to approve rentals under $2,000 without gaining pre-approval.
Step 5: Design your reimbursement process
First, decide if you’d like to streamline the process for employees and reduce administrative overhead with an automated expense solution. If so, you’ll need to choose the right solution for your business before you begin designing this process (trust us, it’ll save you plenty of time later).
Once you decide whether or not your process will be automated or manual (or some combination of both), you’ll need to create a clearly written set of step-by-step instructions for reimbursement. Remember to:
Include links to any templates or software that employees might need to submit their expense reports
Decide who will be responsible for managing the process and include information on how to contact them
Choose an expense submission deadline to avoid a large pile-up of unexpected submissions that could delay month end close
Example: You work for a manufacturing company that frequently sends employees to trade shows. Staff have previously expressed frustration with slow reimbursements, so you choose to build your new reimbursement process around an automated expense management system that integrates with your accounting software (to ensure budgetary compliance).
Next, you add a step-by-step guide to submitting trade show expenses to your travel expense policy, along with clear instructions on how to use the new software. You make sure you assign a dedicated contact person for troubleshooting and set a monthly deadline for expense reports.
Best practices for ensuring expense policy compliance
Documenting your company expense policy is an important first step (we hope those expense policy examples were helpful!)—but it’s just as critical to develop a framework to ensure that everyone follows the rules.
Accidental overspending can easily happen, whether an employee loses track of their menu choices or simply misreads the expense policy. Fortunately, a good automated reimbursement solution will include an option to limit spending at the credit card level.
Add spending guardrails to enforce spending boundaries
Customize your automated reimbursement solution so that it automatically checks for expense compliance based on your company’s specific spending guidelines. For example, if an employee attempts to make a purchase that exceeds a category limit or is outside an approved category all together, that transaction won’t go through.
Encourage timely expense reports
Program your automated reimbursement solution so that it sends reminders to prompt cardholders to upload receipts and expense reports before your established deadline.
Balance control and growth
Maintain visibility and control over company-wide spending without creating unnecessary barriers for employees by using an automated reimbursement solution to:
Set up customized, multi-level approval processes that streamline the pre-approval process (while maintaining an audit trail)
Automatically collect receipts and GL codes by setting up policies that let you define the information employees need to submit with each transaction (like receipts and GL codes), and pause cards when they aren’t received
Protect your company from unauthorized spends by implementing card controls that restrict spending at certain merchant categories and incorporate customized limits
Access real-time reporting on company spending, with insights that outline spending at a granular level
Ready to start designing your company expense policy?
