46% of Canadian SMEs are bootstrapping by relying on personal credit cards; 92% find the traditional loans process intimidating and 84% find it complicated
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: P2P, Lending, Digital Bonds, BNPL, Private Credit
UK Alternative Lenders Funding Delivery Performance to Small Businesses During COVID
Innovate Finance | Mike Carte | May 31, 2022
Summary
- Alternative Lenders were largely borne out of the Financial Crisis and had successfully built a market share close to 10% of the SME lending market prior to the onset of the Covid crisis.
- The Covid crisis was both a resilience test for Alternative Lenders and an opportunity to show whether the sector could help in delivering the solutions to the crisis
- Alternative Lenders delivered c.22% of Coronavirus Business Interruption Loans Scheme (CBILS) loans, more than double their pre-crisis market share - demonstrating their ability to deliver funding where it’s needed.
- In doing so they overcame a number of disadvantages compared to the big banks: a pricing disadvantage versus the banks (who had access to cheaper wholesale funding including the Bank of England’s Term Funding Scheme) and delayed accreditation to the CBILS scheme (where big banks had a head start in offering CBILs whilst Alternative Lenders had to wait in queue for British Business Bank approval to participate in the scheme).
- Alternative lenders have also led the way in lending to SMEs outside London and are playing a significant part in financing house building across the UK by small builders.
See: Fintechs to play an “even more important” role coming out of lockdown, says British Business Bank
- Looking forward, there are several significant challenges ahead for SMEs which will require increased levels of funding: higher energy costs and inflation, rising interest rates and the cost of reaching Net Zero. The Government also has ambitions for Levelling Up, which requires focused lending to under-represented SME Founders in every part of the UK. Where will this additional funding for SMEs come from?
- Alternative Lenders have been funding the growth in SME lending since the Financial Crisis. They continued to increase lending in 2021, at a time when gross lending by banks fell to the lowest since 2013, and they have shown they can deliver additional funding to SMEs where it’s needed. However, they themselves can be funding-constrained. The key policy Ask to help meet the upcoming financing needs of SMEs is an expansion of British Business Bank (BBB) wholesale funding and guarantee schemes for SME lenders.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Apple Finally Unveils its BNPL Offering. 4 Things to Know Before Signing Up
MarketWatch | Aarthi Swaminathan | Jun 8, 2022
After months of speculation, Apple finally unveiled its buy now, pay later offering this week, wading into an industry that’s experienced explosive growth. But consumers should be wary of jumping into the service and first consider some of the potential pitfalls, observers say.
Buy now, pay later — also known as “BNPL” — startups offer a simple product (at least on the surface): A consumer who uses the product to make a purchase can divide the cost into four smaller installments, which are mostly interest-free, made over a few weeks.
Already a red-hot product, BNPL is likely to see a powerful surge in interest with the entry of a tech behemoth like Apple, analysts say. Apple’s BNPL product is powered by the Mastercard network, and it is slated to be available wherever Apple Pay is a payment option. Payments can be managed on the iPhone itself via Apple Wallet.
See:
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Why BNPL Swedish giant Klarna has sights set on Canada
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Financial Consumer Agency of Canada publishes BNPL pilot study
Here are four reasons shoppers may want to tread carefully before signing up for a BNPL program, according to experts.
- Interest-free installments do not mean a buy-now-pay-later purchase is cheaper. In splitting a payment into four and making an expensive item “cheaper” and more manageable by paying in installments, there’s a potential danger of overspending.
- Buying now and paying later for essential goods could be a sign of financial distress. There’s also a potential for deferring payments unnecessarily, particularly for essential goods, which could become a Band-Aid that masks deeper financial problems.
- BNPL could potentially affect your credit score in the future. Late fees are not substantial, as of now. But with credit bureaus looking at BNPL and thinking of how to account for them in users’ credit scores, there is a potential for some damage to occur to your credit score in the near future.
- The good times may not last forever if BNPL companies changing tack, because offering zero-cost installment loans amid an inflationary backdrop could become costly — and, therefore, destined to be short-lived.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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How to Get a Loan for College with Help From A Parent
Guest Post | May 31, 2022
So you have your acceptance letter and are pouring over the class directory looking at the different things you can learn and need to learn for that diploma. You can picture your dorm room and roommate, even some of the fights you’ll likely have. Even the lunches in the cafeteria are vivid in your mind.
The one thing that is a little hazy is how you plan on paying for all of it. With so many types of options, scholarships, and grants, how are you supposed to navigate it all? If you’re American, your top choice is loans. For those of us whose parents make too much money to qualify for federal student loans (information available at this link) and scholarships, but not enough to pay for college flat out, there are a few options that are still available with the help of your parents.
What is a Parent College Loan?
Quite simply, a parent college loan is a loan that parents can take out for their child or children that will help pay for college. The amount can vary from lender to lender, and some may be enough to cover the entirety of your college expenses. The biggest difference between a parent college loan and a loan co-signed by your parents is your parents are entirely responsible for paying back the loan as their name is on the paperwork.
This means that should you fail out, drop out, or discontinue school for any reason, your parents will be responsible for paying back the loan. The conclusion I am sure they’re hoping for is paying back the loan of their college graduate or, more hopefully, their college graduate can help them pay it back when they find a job in their chosen field.
The Search Before the Loans
Firstly, you should look into the various scholarships your school, county, and state offer students in your area. If you think it may be too late to get scholarships, you might be surprised to find a few here or there that have had few or no one applied for. With scholarships dwindling, another possibility is granted through the government or your college directly. NerdWallet makes a good point when they put private loans as their last idea to pay for college (https://www.nerdwallet.com/article/loans/student-loans/how-to-pay-for-college). Before taking out loans with crazy interest rates, found out about the student work program at your school. Some schools will pay a student throughout the semester for putting in a few hours at their library, cafeteria, or working as an aid in one of the offices on campus.
Once you have gone through all other possibilities, then search for loans you or your parents can take out. While it may seem like a daunting task, paying for college is possible, and if you want to continue your education after high school, a necessity.
A Further Look Into Loans
Now that you have made sure to exhaust all resources in the search of how to pay for college, let us talk specifically about Parent Plus Loans versus private loans. Both loans are credited to pay for the cost of education and any additional expenses the student accrues while they are in college for the semester. The one downside to loans is you may have to continue to borrow money if you are unable to stretch your savings or the loan into further semesters.
Parent Plus Loans are loans granted to the parent of the student seeking to further their education. Your parents will be the primary borrower and will put down their information rather than yours, though it will still require your FAFSA information. If you already sought government grants, you should already have the FAFSA filled out. With that information, your parents can fill out the forms online via the Federal Student Aid website.
Private college parent loans are through private lenders, including banks. These institutions should be looked into thoroughly before your parents or any lender borrows money from them. There are many websites available to compare interest rates and payment options of various lenders and finding the best loan that will be easy to pay off is key to being able to pay off the loan quickly. While the Parent Plus Loan through the government is simpler to find, you may be able to find cheaper interest rates with a company that will still defer payment until your time in college has ended.
Final Thoughts
Going to college is an adventure. It can be the best years of your life and help guide you to the career you could spend the rest of your life in. This is a stepping stone in the direction of a bright future. Once you have figured out how to pay for college, soon enough you will be picking your classes, figuring out what major will help you live your best life, and picking bedding for your dorm.
Now you can feel more prepared to discuss payment options with your parents should this be the step to take. You have information on how to find out more and learn about different options available to you. Remember, loans may be daunting, but you will usually only have to worry about them after you are graduated and in a good-paying job. Congratulations and we hope you put your best foot forward into your future.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Why BNPL Swedish giant Klarna has sights set on Canada
FP | | May 17, 2022
Swedish fintech leader Klarna Bank is planning to establish a product development and tech hub in Toronto as it looks to grow its “buy now, pay later” model in the increasingly competitive North American market. BNPL is already starting to take off in Canada and BNPL payments are projected to grow 63.5 per cent and reach $5.9 billion in 2022 (Source: Research and Markets).
Now, with more than 400,000 merchants on board and US$1.6 billion in net operating income, founder and chief executive officer Sebastian Siemiatkowski is looking to catch a ride on Toronto’s thriving tech scene and take advantage of the country’s shift into open banking.
See: Welcome to the third largest tech-hub in North America
Why Canada?
- Klarna initially set its sights on Canada in February, when it brought its “Pay in 4” (split payment) service to Canada in February and partnered with retailers such as Harry Rosen, Mejuri and Frank And Oak as well as hundreds of others.
- Building a tech hub with up to 500 people would give the company a startup feel as well as a foothold in the North American market.
- Being part of an ecosystem that helped startups such as Shopify Inc. thrive is another reason Klarna picked Toronto.
- Canada’s shift to open banking is one reason Siemiatkowski is optimistic about the opportunity here. The regulatory framework, due to launch next year, would give consumers the ability to share their banking data with other financial institutions or move their information between institutions.
“We compared it with all of U.S. and Canada and so forth and concluded that Toronto had a fantastic amount of talent, fantastic positioning, (and) a very business-friendly government,” he said.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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UK Revenue-based Lender, Outfund, raises £115m Series A
London Loves Business | Apr 27, 2022
Outfund are changing the way online businesses raise funds, today announces the close of a £115M Series A round of equity capital and debt amount. The funding round was led by Force Over Mass, PostFinance, 1818 Venture Capital and Tribe Capital, and will support Outfund’s rapid global growth as it provides a faster, fairer and more affordable way for SMEs to raise growth capital across the globe. With this new investment, Outfund is pledging to invest more than £500m of lending to over 5,000 businesses in the next 12 months, and will increase its lending limit to £10m per company.
See: Corl raises $20 Million USD to expand Revenue-Based Financing in North America
Outfund can deploy between £10,000 and £10million of funding, and is available to businesses that take online payments, have a minimum of £10,000 monthly turnover, and have been trading for at least six months. Only simple checks are required to access capital and there is no need for companies to provide business plans or go through prolonged risk assessments. Businesses simply connect their revenue accounts and, with access to this data, Outfund will build a funding offer and deploy the same day.
Unlike conventional business loans, Outfund ensures the time taken to repay is based on each businesses’s circumstances, with an agreed revenue share creating flexibility for founders. Outfund’s revenue-share percentages are set to ensure each business maintains a healthy cash flow in its day-to-day operations; the better the company does, the better Outfund does. For the first time, the funding balance between a company and a lender is equal.
See: Debt vs. Equity Financing: Pros And Cons For Entrepreneurs
Outfund’s technology takes the bias out of lending and improves financing terms, with analysis based solely on a business’ revenues and performance. 20% of Outfund’s portfolio are female founders, a testament to their commitment to advancing the democratisation of access to capital. Its advanced algorithm pulls information from multiple data sources to determine how a company performs, and is then able to de-risk the proposition. This allows more affordable funding, with longer payment terms and a flat fixed fee from 2%, making it the most competitive offering in the market.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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A Carbon-Negative Blockchain Making Money Beautiful
Not Boring | Packy McCormick | Apr 25, 2022
Source: Celo.org
Celo: The Regenerative Economy
Financialization is a dirty word, but the system is particularly dirty for those whose interests don’t have a price. Ledgard wants to fix that, and help reduce extreme poverty in the process. It’s just one example – albeit the most colorful – of a movement called Regenerative Finance (ReFi).
ReFi is a beautiful idea – a re-imagining of the financial system using the tools humanity now has at its disposal to better account for the needs of all stakeholders, current and future. It puts a price on externalities, charging those who create negative externalities and rewarding those who create positive externalities.
See: While Sustainability Software Booms, Investors Demand Climate Data Proof
Celo is a carbon-negative EVM-compatible Layer 1 blockchain (I’ll explain) designed to make it accessible and usable by anyone with a smartphone, anywhere in the world. It’s unique among blockchains in many ways, including the fact that it has its own native stablecoins in different denominations – cUSD, cEUR, and cREAL, with many more to come – and in that it plans to back those stablecoins with 40% natural capital backed assets – like forest NFTs and Ledgard’s L-Marks – in the Celo Reserve over the next four years. That’s a huge demand signal to the market: build things that are good for the planet, and we’ll buy the tokens.
That idea came from Charles Eisenstein’s Sacred Economics:
If you back money with more of the things you want to see in the world, you’ll get more of those things.
Celo is based on a belief that programmable money will unlock new economic models, and that changing the features of money (which is possible because money’s just a technology) can lead to a more beautiful world. And it’s a bet that mission-aligned builders will care as much about a Layer 1’s community as they do its tech specs. When everything is open, liquidity has no loyalty, and each blockchain’s technology continues to improve, standing for something, and building a community around it, might be a key competitive advantage in a multi-chain world.
Money is a technology. Technology is a story with wings
Celo seems like the L1 that’s most excited to push the limits of this new primitive, not to generate eye-popping APYs or attract the most total value locked (TVL), but to build regenerative systems by changing the story of money.
See:
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Canada’s Low-Carbon Tech opportunity is now or risk another familiar story
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Decarbonizing Crypto: Getting to the facts of the decarbonisation discussion
Specifically, in his keynote, Sep said that Celo asked: What features of money might lead to a more beautiful world? He listed five things:
- Universal Basic Income (UBI) that’s tied into monetary policy
- Demurrage, a little tax on holding money, to increase its velocity
- Natural Capital Backed currencies, building on Charles Eisenstein’s idea that whatever backs money, people make more of
- Community Currencies, or a network of local currencies that do all sorts of things
- Creation of New Money Without New Debt by doing things like gifting money into existence, or earning it into existence by doing pro-social things
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Square Launches Small Business Lending Product in Canada
Square | Press Release | Apr 28, 2022
46% of Canadian SMEs are bootstrapping by relying on personal credit cards; 92% find the traditional loans process intimidating and 84% find it complicated
TORONTO--(BUSINESS WIRE)--Today, Square announced the launch of Square Loans in Canada, giving small businesses quick and simple access to funds and eliminating another major pain point associated with running a business.
By using transaction data, Square Loans proactively surfaces customized offers to eligible sellers, providing them with a straightforward application process, where no paperwork is needed, and delivering funds as soon as the next business day. Businesses have one clear, upfront loan fee, which is automatically paid back as a set percentage of daily card sales with Square — so sellers pay back more when sales are strong and less during slower times. The loan fee never increases for the seller, so the amount they owe is always clear.
Luke Voiles, GM Business Banking at Square:
“It’s no secret that small and medium-sized businesses face tremendous barriers when it comes to accessing funds to help them transition and grow. As the pandemic eases and Canadian business owners look to the future, they need help moving forward now more than ever before."
See: Lending Loop Launches ‘Loop Card’ for Small Business Cross-border Transactions
92% of Canadian business owners who received traditional loans find the process intimidating
- A newly released survey commissioned by Square1 shows that roughly 7-in-10 Canadian small business owners have never accessed traditional funding, preferring to “bootstrap it alone.”
- According to the survey, 46% admitted they’ve been forced to rely on personal credit cards; while one-in-five have accessed loans from friends and family to keep their business going in the past.
- The survey revealed that 92% of business owners who had received traditional business funding found the process “intimidating” while 84% said traditional business loans were overly “complicated.”
- Overall, 72% reported they were not happy with the repayment process for traditional loans.
83% of small business owners say the pandemic has made access to business loans more critical
- One-third of Canada’s small business owners reported that running their business throughout the pandemic has been “a challenge” but they are “proud to have made it through so far.”
- More than eight-in-ten entrepreneurs (83%) surveyed said that the pandemic has made access to business loans more critical now than ever before while 51% said that the current business climate was a key concern when considering traditional loan repayments.
See: Square launches small business banking
Since the initial launch of Square Loans in the US and Australia, Square has provided more than USD$9 billion in financing to more than 460,000 businesses, with an average loan size of USD$6,7502.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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