TORONTO, Oct 24 (Reuters) - Canadian financial technology startup Lending Loop said on Monday it was re-launching its online lending marketplace after receiving regulator approval to sell investment opportunities to lenders regardless of their wealth.
The company, which paused its unlicensed operation in March, said the Ontario Securities Commission has now granted it an exempt market dealer license, and that it can connect small businesses looking to raise capital to individual lenders seeking a return on capital everywhere in Canada except Quebec.
The approval, which follows a rival company’s green light last month, suggests Canadian regulators are coming to terms with the peer-to-peer lending model, which is already popular in the United States, Europe and elsewhere.
“These are successful business models that help the middle class, they help small businesses, so why not here?,” said Cato Pastoll, Lending Loop’s chief executive.
The company will allow borrowers - typically small and medium-sized businesses - to seek loans of between C$5,000 and C$500,000 and over durations ranging from 3 months to 5 years.
Lenders that do not meet minimum net worth requirements will be allowed to invest up to C$2,500 per project and C$10,000 ($7,500) per year in total on the platform, Pastoll said.
Rival Lendified Holdings Inc and its Vault Circle Inc subsidiary secured an exempt market dealer license on Sept. 28. It plans to present lending opportunities only to accredited investors, who must have significant financial assets, when it launches in the first quarter of 2017.
The OSC, Canada’s largest securities regulator, said in September it was broadly looking to reduce regulatory burden, and that it was creating an innovation hub called LaunchPad to help fintech companies navigate its rules.
$1 = 1.3330 Canadian dollars Reporting by Alastair Sharp; Editing by Sandra Maler