Credit union Coast Capital Savings and OnDeck Canada are partnering together to offer small businesses faster access to credit, the two companies announced on July 11 via a joint statement.
“We’re really excited about this opportunity, and this was a partnership that for us was really driven by listening to our members,” Derek Turner, head of small business at Coast Capital, told Business in Vancouver.
Under the new partnership, Coast Capital small business members can apply for term loan financing from OnDeck for up to $250,000 online, in branch or through Coast Capital’s contact centre beginning this month. Thanks to OnDeck’s proprietary technology, data analysis about a business’s operations can then be processed quickly to make a decision, with loan approval and fund disbursement possible in as little as one day.
“Not only are we able to automate the process so that there’s very little paper, if any, involved. We’re also able to access third-party data sources to inform our decision,” said Neil Wechsler, CEO of OnDeck Canada.
According to an Innovation, Science and Economic Development Canada (ISED) report based on data from Statistics Canada, small businesses make up nearly 98% of the total number of businesses in the country. This represents more than eight million jobs and over a third of the country’s economic output.
“When small business owners need financing, time is of the essence. Historically, small businesses were unable to obtain time-sensitive funding due to offline processes, lengthy application timelines and manual review approaches to small business lending,” Wechsler said.
The new partnership between Coast Capital and OnDeck is meant to bridge this gap in small-business credit, the two companies said.
“As the financial services industry evolves to respond to increasingly sophisticated customer needs, financial institutions are increasingly partnering with experienced technology providers to help bridge the gap for customers,” said Turner.
The partnership is the first of its kind for OnDeck Canada, which has lent over $440 million in term loans and lines of credit to small businesses since it entered the market in 2014. The company is a part of OnDeck Capital, the world’s largest online lender to small businesses, which since 2006 has extended more than US$11 billion in small-business financing.
Partnering with the fintech company is also an opportunity for Coast Capital to accelerate its national expansion. Last year the company received approval to become a federal credit union, only the second one to do so after New Brunswick-based UNI Financial Cooperation.
“One of the biggest challenges for small businesses in dealing with traditional banks is access to convenient financing to meet their diverse and often urgent needs. And we feel that this value proposition will be embraced based on price, simplicity and member-centricity,” Turner said.