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AimFinance’s Michael Olafson says the firm is working on entering Alberta, British Columbia and Quebec sometime in 2024.
“We’re excited, there’s a lot of potential and customers who are looking for borrowing alternatives that we can certainly help quickly,” Olafson says.
To qualify, a borrower must be 18 years-old or older, reside in Ontario (for now) and earn at least $1,200 per month from regular employment.
Borrowers must also provide an active phone number and email address and have what Olafson characterized as “fair credit.”
This translates to a credit score of about 600 or so. Olafson said many of their customers who do not have access to other forms of credit “really do a good job stretching their household dollars.
Olafson said AimFinance charges higher interest rates, with terms of up to 24 months. He said the rate is understandable given what occurs elsewhere in that segment of the market. As it is a higher risk segment of the market for financing, rates tend to reflect that. AimFinance isn’t just seeing demand from “underbanked” customers, demand is also rising from people with better credit profiles who are highly leveraged and running out of more suitable sources of credit.
“We have seen a trend, typically people in the prime, near prime, with upper end credit scores, have been burdened with debt due to external factors like inflation, that household income is under pressure, so they take a loan.”
Olafson said these individuals turn to AimFinance to shore themselves up when the bank starts saying “no.”
“In the recent past they may have been able to go into a bank to get a loan. But now the bank says no, your score is too low.”
Olafson says demand is strong, hence the expansion, but the market is also quite competitive.
“I like to think what differentiates us is our product does go up to a little higher (amount) than some of them. Some of them have the same amount of term. But being a fairly new entrant to this, we feel like we still have a lot of opportunity to differentiate ourself.”
He said AimFinance will focus on entering new Canadian provinces for now, and then work on developing new products.
“As we evolve, we know that we’re going to make our product offerings more robust. In the future we’ll be looking at other products and adding those but right now we’re just really concentrating on putting our efforts into expanding into other (geographic) areas.”
