Alternative lending in the U.S. may be on the decline, but in Canada, the market is just beginning to heat up. Foreign lending platforms like U.S.-based OnDeck are entering the Canadian market, while local innovators are finding success in the relatively new market.
One such player is Crown Capital, which just announced plans to go public. According to reports released Friday (June 12), Crown Capital is preparing for an initial public offering to raise $100 million. The goal of the IPO is to strengthen Crown’s ability to provide long-term funding to midlevel businesses, the company said.
While the lender operates in a young market, Crown Capital is no stranger to the industry. The company launched 15 years ago and has so far focused on short-term business financing. It sources funding from institutional and individual backers, reports said.
Crown has already raised money for three separate funds, including one for $165 million. While it is in the midst of preparing for a fourth round of funding, Crown’s IPO will look to diversifying its financial offerings by launching financial products that last more than five years. Reports said doing so will turn Crown into a “hybrid specialty finance company.”
The lender actually revealed its IPO plans in May through a press release, but details of the offering were scarce until now.
Focusing its financial services to midlevel companies may be a smart move. According to analysis from PayNet published last month, small business lending in Canada is on the rise, but delinquent repayments of debts are similarly spiking. Reports said that Crown Capital’s first two funds have been repaid in full with up to 1.6 times the return on investment.