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By John MacKinlay, Chief Executive Officer at CAARY

Each October, we celebrate the important contributions that entrepreneurs make to the Canadian economy. This year, Small Business Month deserves extra attention given the challenges these organizations continue to face as a result of the pandemic. According to the Canadian Federation of Independent Businesses, only 75% of Canadian small businesses are fully open, just 45% are fully staffed and only 40% are back to normal sales. We’ve got a long way to go.

Of course, small business owners are masters of the obstacle course that is entrepreneurship. At CAARY, we see this every day. Not only are our customers the owners of small-and-medium-sized enterprises (SMEs), but our team is made up of several entrepreneurs and, of course, we are a small business too. I expect that few small-business owners would say the journey has been easy. And, one of the most difficult challenges many of us face in our small-business growth story is access to capital.

In Canada, there are more than 1.2 million SMEs and well less than 50% have corporate credit cards. It’s extremely difficult for them to get this source of liquidity, or corporate credit more broadly. I saw this in my own experience as an executive in banking and lending. SMEs do not fit between the existing goal posts – the assessment models used by traditional financial institutions to determine creditworthiness. They are often overlooked.

But credit is a critical tool for a business to compete, grow and thrive. So, in lieu of corporate credit, many SMEs rely on personal credit. According to recent Payments Canada research, nearly half of Canadian SMEs who use credit cards are using the business owners’ personal card. Not only is that highly inefficient from a reconciliation perspective, but it creates many risks, including exposing the business owners’ personal assets. That model doesn’t work for SMEs. It certainly didn’t work for us. So, we changed it.

This month, CAARY is soft-launching our progressive technology, which will allow us to offer more accessible credit. We have the capability to assess risk at a more granular level so we are better able to see the opportunities, extend more credit and make it cheaper.

We want to help Canadian SMEs grow their business and, in many cases, get back on their feet after an extremely difficult couple of years. If we can lower one obstacle in this course, we certainly will.

That’s our plan for Small Business Month. What’s yours?

For more information or to sign up for a CAARY card, join our waitlist. Interested in becoming a CAARY investor? Watch this space for updates or reach out to us at investors@caary.com.

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