SMEs are looking for credit solutions beyond personal credit

In countries like Canada which have a highly developed financial system, it is easy to expect a high level of financial inclusion. Most of them are there, but some market segments are still underserved.

“One of them, in our opinion, concerns small and medium-sized enterprises [SMEs]”Sabrina Pilbauer, CFO of CAARY Capital, told PYMNTS.

She said that it is difficult for SMEs to access credit because they often do not have a credit history or do not meet other criteria.

“About 40% of small and medium-sized business credit applications in Canada are turned down,” Pilbauer said. As a result, she said, business owners end up using a personal credit card, which creates a lot of expense reconciliation and takes risks that the business shouldn’t be taking on.

“It’s the great thing we’re seeing right now,” Pilbauer said. “What we’re also seeing is that there are a lot of tools out there right now. Technology has evolved dramatically and we can overcome some of those hurdles by leveraging technology to look at these small and medium businesses differently, and we are doing that.

Take advantage of technology and different adjudication processes

CAARY Capital is a Canadian FinTech platform that plans to soon offer accessible credit cards, capital and financial products to SMEs. The product is currently in beta testing and the company plans to launch it in the next few weeks, Pilbauer said on Friday (January 7).

“We take advantage of technology, different adjudication processes, and we also provide very good financial tools for SMEs to manage their expenses, do the accounting, reconciliation, expense management – all that sort of thing,” Pilbauer said.

Also read: The corporate card pursues the opportunity for Canadian SMEs

SMEs that have been denied credit may prove to be creditworthy when judged by other criteria, she said. CAARY Capital will examine the company’s cash flows, assets and books of account in making this decision. In addition, it will rely on open banking tools to monitor them and ensure that its risk profile does not change. If there is seasonality in the cash flow, CAARY Credit may offer a different product.

“We’re trying to build that relationship and be behind these SMEs in a very different way, leveraging technology, leveraging open banking tools,” Pilbauer said. “It’s something that no one else is doing in Canada today. “

Build a complete platform that includes expense management

To help SMBs better manage their spending, the business will allow them to control spending on different cards, limit spending on some for specific items or types of purchases, or allocate limits differently.

“We are always on the lookout for new tools that can also be of use to our customers,” said Pilbauer. “So we’re really building a whole platform. “

CAARY Capital uses the beta product, as well as Friends and Family businesses. Many CAARY employees have entrepreneurial backgrounds similar to those of the customers targeted by the product.

“We are here to make a difference,” said Pilbauer. “CAARY employees come from different backgrounds, but many are from small and medium businesses, have run small and medium businesses, so understand the reality of not having access to credit when you need it – and for some reasons that sometimes are not. still easy to understand for small and medium businesses.

See also: APOLLO, CAARY Partner on SME digital insurance



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