Open letter to the Government of Canada: Canadian small businesses need fintech lending options during COVID-19

The Canadian Lenders Association and its members ask the Government of Canada to extend their proposed economic stimulus for small businesses to include financial technology-driven lending options.

March 24, 2020, 9:00AM EST (TORONTO, ON)

The Right Honourable Prime Minister Justin Trudeau

The Honourable Bill Morneau

The Honourable Mary Ng

The Honourable Navdeep Bains

The Honourable Chrystia Freeland

The Honourable Jean-Yves Duclos

The Honourable Pablo Rodriguez

Dear Prime Minister Trudeau, Mr. Morneau, Ms. Ng, Mr. Bains, Ms. Freeland, Mr. Duclos, and Mr. Rodriguez:

Thank you for your ongoing work to keep Canadians safe from COVID-19 and mitigating this unprecedented health crisis. The member companies of the Canadian Lenders Association (the “CLA”) are committed to working with lawmakers to help ensure that the proposed economic stimulus measures are effective and expeditious, particularly for small businesses.

The CLA members strongly support the Government of Canada’s $10 billion capital allocation to BDC/EDC. However, tens of thousands of truly small businesses (MSMBs), such as restaurants, retail stores and auto repair shops, may not be adequately served for three reasons:

  1. these businesses do not meet traditional financial institutions’ credit requirements;
  2. the loan amounts required by these businesses are relatively small, placing them at a lower priority by those tasked with deploying capital; and
  3. the volume of time-sensitive credit requests from small businesses are likely to overwhelm traditional financial institutions and underwriting processes.

As a result, Canadians may be faced with the prospect of leaving behind those truly small businesses which are most affected by this crisis, and are most likely to fail.

These local businesses are currently being serviced extensively by the non-bank, financial technology (“Fintech”) sector. Fintech companies represented by the CLA are uniquely positioned to be able to reach those most in need as a result of advancements in automation and speed of credit approval. Fintech companies deploy capital, quickly and efficiently to customers that are largely underserved by the traditional banking sector.

It is essential that the Government of Canada’s capital allocation leverage digital advances in the marketplace to ensure that the stimulus reaches the broadest cross-section of small businesses in need. Fintech lenders act as efficient distribution points for capital because of their extensive small business customer databases and existing relationships, as well as their automated approaches to application processing, underwriting and direct deposit capabilities.

CLA member companies have made over $2 billion available in the past several years, primarily to local storefront businesses. At loan sizes that typically range from $25,000 – $100,000, $2 billion represents tens of thousands of small businesses, which in turn support hundreds of thousands of Canadian workers. Under a government-backed loan program, the CLA estimates that its member companies can quickly reach and provide credit to over 100,000 small businesses, that may not be served by traditional financial institutions. The member companies of the CLA are committed to working with the Government of Canada to help ensure that any economic stimulus relief can be accessed broadly by small business owners across Canada in an effective and expeditious manner.

With support of the BDC, Canadian banks, and the Fintech community, the Government of Canada has the best chance to reach the largest number of businesses and ensure that the most vulnerable businesses in our economy survive.

To expedite capital flow to these small businesses, the CLA and its members propose to work with the BDC (or any other entity) to leverage our platforms in deploying government-backed funding. This would include collaborating on eligibility criteria and determining operational mechanics of the program. Time is of the essence and we are committed to implementing a program in as soon as 3 – 5 business days.

The CLA understands that Financial Innovation Now, an alliance of Fintech leaders (including Apple, Square and Paypal), has reached out to congress in the United States with a similar proposal to deploy capital to those small businesses most in need. We also understand that similar programs are being put in place between governments and Fintech companies in the United Kingdom and Australia.

The CLA deeply appreciates your work during this unprecedented time, and we look forward to assisting with the immense challenges of this pandemic.


Gary Schwartz
Canadian Lenders Association

About the Canadian Lenders Association

The CLA supports the growth of companies that are in the business of lending, or providing other means of credit, to small businesses and individuals using innovative means to exchange ideas and explore ways of improving the sector; encourage principled and professional practices; educate the public at large about innovative lending; encourage potential borrowers to be informed about the appropriateness of innovative lending to their circumstances; and to advocate on behalf of, and represent the interests of, innovative lenders. To learn more about the CLA, please visit its websites at: and

For further information:

Media Inquires: Lauren Arnold | Talk Shop Media | 647-869-1438 |

David Gens | CEO, Merchant Growth & Co-Chair CLA COVID-19 Working Group |778-895-9208|

Neil Wechsler | CEO, OnDeck & Co-Chair CLA COVID-19 Working Group | 514-927-9600 |