SkyCap Financial wants nothing more than to stop seeing its clients.
While some short-term lenders seek to keep their customers on a cycle of payday loans with high interest rates, the Kingston-Ontario based alternative lender strives to get its customers back to borrowing at lower rates from the banks.
“The goal for us is to help that client to not have to borrow with us,” said SkyCap Financial president Jeremy Wilson. “We want the client to get back to being able to borrow with a bank.”
Wilson explains that the company, which just celebrated its fifth anniversary, exists to provide those who don’t qualify for a bank loan with a lifeline before they resort to a high interest payday loan.
“The problem with payday loans is they can be expensive, and they can get you into a vicious cycle that a client can’t recover from; their paycheck is continually going towards paying off the loan, and they can’t get back on their feet,” he said.
Wilson explains that SkyCap Financial is able to offer affordable rates to customers that aren’t able to secure a bank loan by taking a more holistic approach to its underwriting process.
“We don’t lend to everyone, and our interest rates show that we’re not lending to anyone that walks in the door with a pulse,” he said. “We make sure, when we’re underwriting a file, that the client can afford the payments; that doesn’t always happen in the payday loan space.”
Rather than only taking a client’s credit score into account, Wilson says SkyCap Financial’s underwriting process is focused on credibility, stability and unique individual circumstances.
Upon filling out an online application at SkyCapFinancial.com—which includes some personal information, as well as credit history, current debts and income—clients are considered based on their unique circumstances.
“We generally confirm employment, review any extra documents that are required—like proof of income or mortgage documents, any extra items required based on individual circumstances—and if approved the client signs an online loan agreement, and the funds are released,” said Wilson.
The entire process always takes less than 24 hours, but is often completed same-day and can even be as quick as 2-hours in some circumstances. “If you walk into a bank it could be a day or two days or three days before you get a decision back, but we can be very nimble and get the process done quickly,” he adds.
SkyCap Financial offers loans from $500 to $10,000 with terms ranging from nine months to three years, with rates ranging from 12.99% to 39.99%. “We are more expensive than a bank, and we are significantly cheaper than a payday loan, and within our industry we’re on the lower end of the interest rate spectrum,” explains Wilson.
But SkyCap Financial isn’t just helping Canadians get back on their feet by providing a quick and affordable alternative to payday loans. The company recently took their commitment to financial wellbeing one step further by launching SkyCap University, a financial literacy program that teaches the basics and rewards participants for furthering their financial know-how.
The program—which is free to all clients—is administered in weekly segments over the course of a year, and covers seven key financial literacy subjects: saving, budgeting, credit, debt, life events, home ownership and retirement.
“It’s a win-win situation for the clients,” said Wilson. “They’re able to learn about the basics of personal finances, and by completing the course with a perfect payment history on their loan they immediately qualify for a reduced interest rate with us, which saves them money.”
While many lenders seek to improve the financial stability of their clients, SkyCap University proves the alternative lender’s commitment to getting its clients back to borrowing with a bank.
“We are invested in helping the client better their situation, and not just by providing financing,” said Wilson. “We’re providing the financing but at the same time we’re providing the tools that will help them succeed.”