How Canada’s Newest SMB Lender Uses Tech to Streamline Funding

One of Canada’s newest small business lenders is using the latest technologies to offer clients a more seamless financing experience, designed to meet the challenges of an uncertain economy.

Capital Advance was founded in Toronto in April of 2020, and offers Canadians (in every province except Quebec) quick and flexible short-term financing, as well as merchant cash advances, with no credit checks required.

“Cash flow is not necessarily consistent for small business owners right now, so having the option to do the repayment of the advance as a percentage of sales can be helpful to some merchants, because there is no fixed payment,” explains Capital Advance’s Managing Director, Chris Desaulniers. “On the other hand, we have options for those who do want a fixed payment so they can forecast [repayment] based on that.”

What Makes Capital Advance Unique

What makes Capital Advance unique is how they utilize technology to streamline the lending process, and protect their clients from unnecessary fees. The application process is entirely paperless, and can be completely online in a matter of minutes, with funding provided same or next day.

“With reductions in staffing, a lot of small business owners are limited for time, so the less incumbent the process can be for them, the better,” explains Desaulniers. “Not having long applications to fill out, not having to go into a branch, not having to wait to access capital, we’re eliminating those pain points in their daily workflow.”

The company also protects its clients from unnecessary non-sufficient fund (NSF) fees through its NSF protection system.

“When we check and see there are insufficient funds in the account we will notify the merchant so that they can move money over, or let us know if they’re waiting for a deposit to go in,” says Desaulniers. “We will not debit knowing it will push them into overdraft and trigger an NSF fee with the bank.”

Clients also have the option to pause repayments if they experience a sudden slowdown, which Desaulniers says is especially helpful right now, given the uncertainty small businesses are facing.

Loan Eligibility Requirements & Process

Small businesses seeking a short term funding solution can begin the application process by providing some basic information on the company’s website, Applicants only need to be in business for at least three months, be based in Canada, and generate gross monthly revenues of at least $10,000 in order to apply.

“From there an online application is sent to the merchant asking for some additional detail, which will take five to ten minutes to complete,” says Desaulniers. “Once that’s received an initial review is done, and very soon after merchants that meet the qualifications will receive a request for a secure bank connection that is provided through Flinks, another Canadian FinTech company.”

Near the end of the application process Capital Advance will request the business’s articles of incorporation, a copy of the applicant’s driver’s license, and a void check in order to process the funding request.

“We can conduct everything fully digital; the application is digital, how we receive recent banking [records] is digital, so we’re making the process as seamless and easy for small businesses as possible,” says Desaulniers. “We have no hidden costs or fees, everything is laid out in the contract for them to review before they sign,” adds the company’s other Managing Director, Ormond Yeung.

Capital Advance Products & Benefits

Capital advance offers competitive rates on loans ranging from $10,000 to $100,000 on six-month or less terms. The company also does not require any credit information in the application process, allowing the company to provide funding solutions to those who may not qualify with a traditional bank. Doing so also prevents any negative impact to the business or business owners’ credit scores.

Desaulniers adds that their products are popular with merchants who have a promising business but are experiencing cash flow problems, and need short term assistance.

“We understand the ebbs and flows, especially within the economy recently, and we’re here to work with them,” he says. “For us, it’s all about communication and understanding their needs, and not over-extending them from a cash flow perspective.”

The Future of Capital Advance

While the company was founded at the start of the pandemic Desaulniers emphasizes that Capital Advance is here for the long haul, and is already thinking about how new technologies can provide even greater efficiency and convenience in the future.

“Our objective going forward is to continue to integrate tools within the FinTech industry to more proactively support Canadian business owners, determine when they might have a cash shortfall, and work with them to proactively remove pain points and allow them to focus on running their business” he says. “More machine learning and A.I. tools will help us help them even more in the future.”

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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.