An Overview of FinTech in Canada – lending

LENDING (PERSONAL OR BUSINESS)

The FinTech lending sector consists of non-bank platforms that provide rapid onboarding, serve a wider range of clients than traditional financial institutions, and in some cases offer lower interest rates.19 These platforms grew tremendously in popularity for small to medium businesses and individuals after the financial crisis. The combination of stringent regulations, tightened lending standards, and reduced liquidity after the crisis created an opportunity for FinTechs, who are not subject to the same level of regulatory requirements, to serve businesses and individuals who were turned down by traditional financial institutions for mortgages, business loans, and other lines of credit.

In late 2016, Borrowell began a partnership with CIBC, allowing it to use Borrowell’s platform to adjudicate loans in real time to existing online customers, providing them with funds typically issued into a client’s account the next business day.21 This was the first partnership between a major Canadian Bank and a digital lending FinTech. Since then Borrowell has seen tremendous growth, recently receiving $57million in financing ($7 million in equity and $45million in new credit facilities). The company, having only just launched in 2015, now has over 300,000 users, excluding those that access their platform through CIBC.

FinanceIt, a cloud-based point-of-sale financing platform; FundThrough, which helps small business owners navigate their cash flow challenges by accessing the working capital in their unpaid invoice; and Thinking Capital, which offers tailored ideas to grow businesses and get quick access to capital, are examples of other successful financial lending companies that provide flexible access to credit for their customers.