The Bankwatch

Tracking the consumer evolution of financial services

Bluecap enters with a novel financing model for Canadian small business

I have long predicted that innovation within financial services will come from one or two innovative banks but more likely from new entrants.   This morning a note in linkedin from a friend, Scott Wilson, highlighted his new Canadian company with a model that caught my attention.

The typical small business is time starved, suffers cash flow peaks and valleys, and is at the mercy of the larger economy and business cycles.   Bank lending for small business is identical to lending for large businesses, just on a smaller scale.  The rigidity of payment plans in bank products plus the paperwork to get it done is not a comfortable fit for many. 

Bluecap deals with that mismatch by providing Canadian small business financing that has repayment tied directly to the cash flow.  the real novelty is using debt and credit transaction revenue thus providing some measure of risk management to Bluecap, while allowing the small business to repay their loans from available cash flow.

An interesting model and one to watch.

Bluecap™ FlexLoan™ converts your future credit card and debit card sales into cash now that you can use for any business purpose.

  • Bluecap pays you a fixed dollar amount now for a fixed percentage of your future credit card and debit sales until your contract obligation is fulfilled.
  • Because repayments are dependent on your Visa, MasterCard, Amex and Interac receivables, Bluecap doesn’t get paid unless you get paid, which helps you manage your cash flow during slow periods.
  • Benefit from early loan repayment with Bluecap FlexRewards™


Written by Colin Henderson

April 13, 2010 at 09:31

Posted in Uncategorized

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