The U.S.-based alternative lender that enjoyed a smashing IPO last year is expanding north of the border, according to recent reports. OnDeck Capital is set to launch its peer-to-peer lending platform in Canada following a soft launch in the nation to test how well its alternative SME lending service would perform.
After initially offering just $50,000 or less in small business loans in Canada, OnDeck will reportedly start offering up to $150,000 in financing. The news marks the first official launch of international operations for the company, according to OnDeck senior vice president of international operations Rob Young.
“We’re really excited about the Canadian marketplace,” he said.
Canada is called home to several alternative lenders, including Borrowell and Grouplend, though competition for business lending platforms is a bit less robust. FundThrough, reports said, may be OnDeck’s strongest rival in the Canadian market. But FundThrough founder Steven Uster recently told The Huffington Post that the industry could be ripe for expansion as SMEs struggle to access working capital. “Loans that are under $250,000 just aren’t profitable for the banks,” he told reporters. “It takes a lot more work and a lot more time, and they’d rather do the larger-sized loans.”
FundThrough has only been operating in the market since last February, and recently released a mobile app that allows owners of SMEs to apply for working capital with a simple tap of a button on their smartphones.
According to reports, some Canadian mainstream banks are voicing growing concerns over alternative lending competition, including JPMorgan Chase and TD Bank.
Outside the Canadian market, OnDeck has even more plans for expansion. The company revealed earlier this month that it secured about $23 million worth of financial backing to launch operations in Australia through a collaboration with MYOB.