CAN Capital, the small business online lender, has put its CEO on leave.
According to a report by American Banker, CEO Daniel DeMeo has been put on a leave of absence, and Parris Sanz, CAN’s chief legal officer, is the interim CEO. Ritesh Gupta, previously the chief customer operations officer, was promoted to chief operating officer.
A source familiar with the matter told American Banker the overhaul of the management ranks was prompted by problems that arose after CAN Capital expanded into other products a few years back. In 2010, CAN Capital began offering term loans that required borrowers to make payments daily, irrespective of if they made sales that day. CAN Capital reportedly used old systems to collect the daily payments, and as a result, it wasn’t collecting all of the money that was owed to it.
“As the board and our leadership team conducted our business reviews and looked at how we can best position the firm for future growth, we self-identified that some assets were not performing as expected and that there was a need for process improvements in collections,” the company said in a statement to American Banker.
The shakeup at the online lender comes just a few months after it announced a big milestone: providing small businesses with access to more than $6 billion of working capital. The company said at the time it helped over 70,000 small business owners open new locations, purchase inventory, buy equipment and a myriad of other endeavors with the funding it facilitated.
In a press release, DeMeo said: “To reach the $6 billion milestone is a huge accomplishment for CAN Capital, highlighting our experience and our dedication to helping small businesses succeed. Eight years after the financial crisis, many small businesses still have trouble accessing working capital. We are committed to using technology to offer a variety of fast, efficient financial solutions for the full spectrum of small businesses, including those that are too small to get capital from other types of financial organizations and those for whom a traditional bank product doesn’t fit. Small businesses are the engine of America’s economy, and we are proud to support their growth.”