How Canacap Approves 90% of Canadian Merchants for Financing

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Since it’s founding in 2017, Canacap has offered Canadian businesses an opportunity to get approved for a loan regardless of credit, without requiring collateral, and without dealing with an automated system.


In the less than three years since they’ve serviced almost 2,000 Canadian businesses, providing nearly $30 million dollars in financing, and continue to grow at a rate of about 50% each month.

“Our mission is to offer alternative financing in the merchant cash advance space,” explains co-founder Adam Benaroch. “Our underwriting guidelines are not based on credit, we are aggressive and we underwrite deals in a way that is not automated but human, and we give a lot of approvals where other lenders would’ve declined deals.”


Benaroch explains that the company offers loans of up to $250,000 to Canadian customers based anywhere outside of Quebec through what is essentially the purchase of future receivables. “We purchase a receivable at a discount, we pay for it upfront, and then we collect a percentage of all future revenue streams until the purchase amount is fully collected,” he said.

Prior to co-founding Canacap in Montreal, Benaroch says the team operated in the United States for nearly a dozen years, building the Canadian-specific brand as a result of the demand they saw from across the border. Unlike other alternative lenders, however, Canacap doesn’t do its own sales, receiving customer referrals through its partners instead.


“Smarter Loans is a strong referral partner of ours as well,” announces Benaroch. “Smarter Loans connects us with merchants looking for working capital on a daily basis, and we have a team in-house that reaches out to these customers, qualifies them and sends them the application.”

Unlike most in the alternative lending space, Benaroch says Canacap takes a more human approach, with real people determining whether applicants meet their criteria on a case-by case basis. “We’ll look for reasons to fund deals, rather than reason to decline them,” he said, adding that the company has a more than 90% approval rate.


In order to apply for a loan merchants must submit a completed application along with three months of bank statements, either online or via fax.


“Smarter Loans promotes our brand, which drives us new customers online, then we have a sales team who reaches out to these customers by email or phone to qualify them for our product,” said Benaroch. “We send their application to underwriting, and if it’s approved one of our funding specialists will reach out to the customer and go over the funding terms.”

Benaroch explains that the approval process is typically completed in just a few hours, with funds often provided within 24 to 48. He adds that the product is perfect for retailers, whole sellers or merchants looking for a quick influx of working capital to get up to date on bills or cover liabilities, with loans averaging about $30,000.


“In many cases these business owners are going online because they’ve been turned down,” he said. “When they come to Smarter Loans they are exposed to lenders like ourselves who look past credit and are willing to give small business owners the opportunity to sell future receivables for immediate cash, even if they have bad credit, recent bankruptcies, tax liens or other issues with cash flow.”


Rates range from 1.399 to 1.499, based on the risk associated with the account, with terms that range from 84 to 140 days. The company also offers renewable credit lines for merchants looking to receive additional funding on a recurring, 60-day basis.


“Our transaction is based solely on trust—there’s no collateral—therefore when we fund a business we take a big risk because we believe in the business and their ability to pay us back,” explains Benaroch.

In the coming years Benaroch says Canacap is looking to expand its pricing model, create a credit product and offer multiple financing options to the same merchant at the same time. Overall, they hope their customer-focussed approach and commitment to servicing the needs of Canadian small business owners will help them develop long-lasting relationships with customers north of the border.


“We’ve helped a lot of Canadian customers obtain working capital, we’re very proud of our partnership with Smarter Loans and look forward to growing it,” said Benaroch.

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Jared Lindzon

Jared Lindzon is an experienced journalist, writer and public speaker. He specializes in Business, Technology, Lending and FinTech industries in Canada and abroad. Jared is a regular contributor to Smarter Loans and top tier publications around the World, including Fortune Magazine, Fast Company, the Guardian, Rolling Stone, the Globe and Mail, and many more.