Small businesses in Canada are increasingly turning to non-bank and fintech lenders for working capital, as a wave of new financing programs launches even as credit conditions tighten in some corners of the small-business lending market globally.
London, Ontario-based VersaBank, a federally chartered digital bank that has offered small business financing in Canada since 2010 through its Structured Receivable Program (SRP), announced it is expanding that program in the United States to cover point-of-sale loans and leases for small businesses, a segment previously limited to consumer lending. The bank said the move will more than double the addressable market for its U.S. program and supports a target of generating at least US$3 billion in additional U.S. SRP fundings in 2027, a figure the company describes as a management target rather than committed funding.
How the Financing Model Works
VersaBank’s program provides capital to financing companies that originate loans and leases for businesses, rather than lending directly to small business owners itself. Its Real-Time SRP component is designed to let partner lenders obtain funding for individual loans within hours, compared with a conventional process that the bank says can take five to 30 days or longer as receivables are accumulated before being transferred into warehouse financing facilities. David Taylor, Founder and President of VersaBank, said the expansion “addresses a need within our current SRP partners, while enabling us to add new partners,” supporting the funding target for next year. VersaBank also said it plans to apply its internal artificial intelligence platform to assess individual loans underlying its receivables, rather than relying solely on evaluations of larger pools.
New Entrants in the Cross-Border Lending Space
Other non-bank lenders are also building out platforms aimed at small and mid-sized businesses on both sides of the Canada-U.S. border. Brooklyn-based fintech fundivi launched a hybrid lending platform that combines its own direct funding capacity with a network of partner lenders, covering products such as working capital, lines of credit, term loans, SBA loans, bridge capital, asset-based lending and receivables factoring for businesses in the United States and Canada. The company said applications are assessed through cash-flow underwriting alongside credit history, with final terms and rates determined during underwriting review rather than guaranteed upfront. “The hybrid model lets us match a business with an appropriate product instead of putting every applicant through the same process,” said Steven Kay of fundivi, adding that a single application can be referred to a partner lender when the firm’s own capital isn’t the right fit.
Separately, New York-based Fundfi Merchant Funding, which provides revenue-based financing and other loan products to small and medium-sized businesses in the United States and Canada, announced the closing of a senior secured credit facility with an institutional asset manager to expand its lending platform. Efraim Kandinov, CEO and co-founder of Fundfi, said “the demand for fast, reliable funding has never been higher,” while Natasha Dillon, CFO and co-founder, said the facility strengthens the company’s balance sheet with a structure designed to scale alongside its lending platform amid economic uncertainty.
Pressure Points in the Broader Lending Market
The push by alternative lenders to expand comes as some small-business lending markets elsewhere have shown signs of strain. Reporting on fintech small-business lenders in fiscal 2026 found that growth moderated broadly as firms slowed disbursements and prioritized asset quality and cost discipline amid a more difficult credit environment, with stress concentrated among highly leveraged borrower segments prompting tighter underwriting standards. While that reporting centered on fintech lenders outside Canada, it illustrates a wider dynamic facing non-bank small-business financing: lenders are increasingly balancing growth ambitions against caution over borrower risk, even as they roll out new capital and technology to reach underserved business segments.
VersaBank U.S. Small Business Lending Expansion
What It Means for Business Borrowers
Taken together, the moves by VersaBank, fundivi and Fundfi point to continued expansion of non-traditional financing channels available to Canadian small businesses, including point-of-sale lending, revenue-based financing, and cash-flow-based underwriting models that look beyond conventional credit history. VersaBank noted that the scale and timing of its additional U.S. funding will depend on partner adoption and loan origination activity, while fundivi said its model is intended to widen the range of businesses that can be considered for financing, including those whose credit history alone would not qualify them with a single lender. For business owners, the expansion of these platforms reflects an industry that is building out faster, more flexible funding channels even as some lenders elsewhere tighten standards in response to credit headwinds.
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