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SMBs Seek Credit Solutions Beyond Personal Credit

SMBs Seek Credit Solutions Beyond Personal Credit
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In countries like Canada that have a highly developed financial system, it is easy to expect a high level of financial inclusion. There are, mostly, but some market segments are still underserved.

We think one of them is small and medium enterprises [SMEs]Sabrina Bilbauer, CFO at CARY Capital, told PYMNTS.

She said it is difficult for small and medium-sized businesses to obtain credit because they often do not have a credit history or do not meet other criteria.

“About 40% of applications from small and medium-sized businesses in Canada are denied credit,” Bilbauer said. As a result, she said, business owners end up using a personal credit card, resulting in a lot of settling expenses and taking risks the company shouldn’t.

“That’s the big thing we’re seeing now,” Bilbauer said. “What we also see is that there are a lot of tools out there right now. The technology has evolved quite a bit, and we can overcome some of those hurdles by leveraging technology to look at those SMEs differently – and that’s what we’re doing.”

Take advantage of technology and the various arbitration processes

CAARY Capital is a Canadian fintech platform that plans to offer soon accessible credit cards, capital and financial products for small and medium businesses. The product is in beta testing and the company expects to launch it in the next few weeks, Bilbauer said Friday (January 7).

“We take advantage of technology, different arbitrage processes, and we also provide some really good financing tools for small and medium businesses to manage their expenses, do accounting, reconciliation, expense management — all that kind of thing,” Bilbauer said.

Read also: Corporate Card Tracking Canadian SME Opportunity

She said that SMEs that have been denied credit may prove their creditworthiness when judged by other criteria. CAARY Capital will look at the company’s cash flow, assets, and accounting ledgers to make this decision. Moreover, you will make use of open banking tools to monitor them and ensure that their risk profile is not altered. If there is seasonality in cash flow, CARY credit can offer a different product.

“We are trying to build that relationship and to be behind those SMEs in a completely different way, leveraging technology, leveraging open banking tools,” Bilbauer said. “It’s something no one else in Canada does today.”

Build a complete platform that includes spend management

To help SMBs better manage their expenses, the company will allow them to control spending on different cards, restrict spending on certain cards for certain items or types of purchases, or distribute limits differently.

“We are always looking for new tools that can also be useful to our customers,” Bilbauer said. “So we’re already building a complete platform.”

CAARY Capital uses the demo product in conjunction with Friends and Families businesses. Many people at CARY have an entrepreneurial background such as that of the product’s target customers.

“We’re in it to make a difference,” Bilbauer said. “The people at CARY come from different backgrounds, but a lot of them come from small and medium businesses, and they run small and medium businesses, so understand the fact that you don’t have access to credit when you need it — and for reasons that sometimes aren’t always easy for businesses to understand. small and medium.”

See also: Apollo, a Canadian partner in digital insurance for small and medium businesses


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