In the growing fintech hotbed on Canada’s Pacific Coast Merchant Advance Capital hopes to grow businesses all the way to the Atlantic, founder, president and CEO David Gens said.
The small business lender focuses on restaurants, bars and bistros, automotive services, retailers, and salons and spas by providing a series of loan products.
One solution is the Merchant Advance program which turns future cash flows into immediate working capital, Mr. Gens said. No collateral is required and it immediately adjusts repayment to match the borrower’s business cycle. It is designed for seasonal businesses using credit or debit transactions who temporarily require cash to take advantage of inventory opportunities, seasonal staffing or debt management. They get an advance against future debit and credit card sales.
Merchant Advance Capital also offers business loans. Coming with a fixed daily payment, they are best suited for companies whose revenue comes from cheques and deposits. Give Yourself Credit, an unsecured line of credit, is based on business performance, instead of just credit scores or business assets. Equipment lease financing and the Good Cents Loan, which targets businesses which benefit the community and environment, are other options.
Like many companies in the United States and a growing number in Canada (Merchant Advance Capital has offices in Toronto and Vancouver) Merchant Advance Capital employs advanced technology and custom software to help it make informed lending decisions to borrowers underserved by traditional lenders. Developing that technology is a continuous process.
“Technology investment is this ongoing beast you invest in,” Mr. Gens said. “It never ends.”
Mr. Gens said technology has been the company’s focus since the beginning when his father Radik Gens, who earned his MSc from Russia’s Moscow State University, led the initial design. The elder Mr. Gens is president and CEO of Gens Software whose client roster includes Microsoft, British Airways and Ritchie Bros. Auctioneers.
While the Canadian fintech industry is growing, especially in Vancouver and Toronto, it is different than the much bigger one immediately south.
“The hyper competitive environment and level of aggression that we see in the United States fortunately has not been replicated in Canada to the same extent,” Mr. Gens said.
But there are similarities. Mr. Gens sees provincial regulators paying more attention to the industry, and that is fine with him.
“What I would like to see is the industry coming together to self-regulate,” Mr. Gens said.
He believes that will come as the industry matures. So will a better balance between the two key components of marketplace lending, where one has been getting most of the attention so far.
“Fintech is still fin and not just tech,” Mr. Gens said. “Fintech can provide a loan differently, but at the end of the day a product is still a loan.”