Troy Wright is a banking industry veteran whose instincts tell him now is the perfect time to launch Lendified in Canada.
Mr. Wright said the environment in Canada coming out of the recession was substantially different than those in the United States and United Kingdom.
“Canadian banks were the one system that made it through 08-09 untouched.”
While the birth of the fin-tech industry in the United Kingdom was propelled by the government’s desire to restart lending, in Canada it was more related to a value proposition, Mr. Wright said.
“New companies can provide the same services, better, faster and sometimes cheaper than the big banks.”
Mr. Wright said Lendified started in February before going live over the summer. It provides working capital loans of as much as $35,000 for as long as one year.
To succeed in this new space, Mr. Wright knows Lendified has to be both convenient and effective.
Convenience is realized through a five-minute application process involving data and analytics. That need is reinforced every time Mr. Wright looks at when most business owners apply to Lendified.
“People are busy running their businesses during the day, so most applications come in early in the morning or late at night.”
Mr. Wright believes the effectiveness will soon come because data shows a clear need for better small business loans. The Canadian small business loan market is worth $100 billion annually, he said. With a 15-20 percent turndown rate that means there is up to $20 billion of unmet demand.
Aside from the numbers, Mr. Wright has other reasons to be confident about Lendified’s future. Big banks find it difficult to turn sufficient profit in the small business lending space because their processes are still highly manual, unlike the high level of automation employed by marketplace lenders.
“Those legacy systems are barriers to fast and efficient loan systems,” Mr. Wright said.
When designing Lendified, Mr. Wright said he looked closely at OnDeck, Lending Club and different platforms in the United Kingdom to see how they efficiently delivered small business loans.
During his research he saw the same patterns Canadian small business owners were living with.
“It’s a Catch-22. They need inventory to grow, but they cannot borrow against it until they have it,” Mr. Wright explained. That leaves them to borrow from friends and family and tap their credit cards.
Canadian business owners are clearly ready for a new option, and the timing is excellent because the average Canadian’s banking behavior is beginning to change, Mr. Wright said. The typical view is Canadians display a much higher degree of bank loyalty than Americans do. They go to the same bank for their mortgage, business loan and RRSP.
“The environment is much more fragmented than some think,” Mr. Wright said. “People are willing to move.”
Mr. Wright said Lendified is busy promoting the platform by working with associations and creating partnerships in the small business ecosystsem. They focus on reaching lawyers, accountants and other centers of influence for the typical small business owner. They also identify unique niches like franchisees who have been directed to renovate their location as part of a company wide redesign.
New referrals from existing customers have also been strong,Mr. Wright added.
Mr. Wright is well aware of the talk of industry regulation in the United States and is well-qualified to properly position Lendified so it can succeed in the Canadian regulatory environment.
Educated at the University of Western Ontario and Harvard Business School, Mr. Wright has an extensive background as a CEO-level officer in international banking, most recently with Scotiabank, where he worked in Mexico, Canada and Puerto Rico.
While Canada has few rules other than truth in lending governing the marketplace lending space, Mr. Wright developed Lendified’s internal governance and process controls as if strict rules were already in place.