July 7, 2022

Better small-business lending options are out there: Meet open banking

Research shows 60% of small business owners want better business lending and credit options. Enter, open banking. What is open banking? Read on to learn more.

I wasn’t surprised to read recent industry data that showed nearly 60% of Canadian small-business owners feel they would benefit from more lending and credit options. Four years ago, small business made up 98% of all businesses, but their share of total outstanding business loans was less than 12%. I expect that hasn’t changed much.

Thankfully, financial technology has changed. Open banking brings much needed hope for the highly underserved small-business market. 

What is open banking?

Small and medium-sized businesses struggle in the current financial structure. The assessment models used by traditional financial institutions – personal guarantees and credit checks – make it hard for you to access the capital you need, when you need it.

So, what is open banking? It’s a one-way ticket to more efficient and personalized lending options when you don’t have the time or credit profile to use more traditional methods. Also known as consumer-directed finance, open banking is essentially about putting power back into the hands of consumers and small business owners by offering a secure way for you to share financial data with a financial technology company.

You know how you’ve always had to jump through hoops to share financial statements from your financial institution with third parties? By providing a trusted third party with access to your banking data through a secure, open banking connection, sharing your data becomes simple and straightforward.

Caary is one such solution designed to meet your needs as a small and medium-sized business owner. Open banking technology makes it possible for us to extend corporate credit and better spend management tools to small businesses in Canada with no personal guarantees required.

Does Canada have open banking?

In progressive economies, including the UK, Australia, and the European Union, open banking is alive and well and supported by a regulatory regime. Canada is a bit behind, but we’re pleased to see the early signs of adoption. The federal government recently appointed Abraham Tachjian to develop a made-in-Canada open banking regime and offers this guidance on the benefits of open banking.

In the meantime, we at Caary are committed to delivering the benefits of open banking to our clients as soon as possible. We’re working with forward-thinking financial technology companies – like Flinks and Codat – to give consumers and small business owners the ability to safely share their financial data with just a few clicks of the mouse or taps on the phone.

How does open banking work?

When you share your data with us, you’re allowing us to get a truer picture of your business’s financial position. Instead of relying on credit history, which many small businesses don’t have, we look at cash flow and assets. This enables us to make credit accessible.

"As a small business owner, the option to have a virtual or physical card for my employees is extremely beneficial. The added perk is the cash back credit on my statements. I highly recommend Caary Mastercard® for all businesses."  Helen Tran, Owner at Specs on Bloor

With open banking, you continue to have control over your data, and the security of that data remains top-priority. Here at Caary, we apply all the same data protections that you would expect from your bank, such as multi-factor authentication, encryption and tokenization. Plus, linking to your bank account does not allow us to access your sign-in credentials or other sensitive account information.

How else can open banking support me?

The benefits of open banking extend beyond credit and lending. The data available can benefit small businesses in a variety of ways, including better accounting integrations, the ability to identify cost saving and discount opportunities, and better overall business intelligence. The list of use cases goes on, and we have only just begun to explore the possibilities.

“We can quickly generate virtual or physical cards as needed, which lets us simplify expense management. In addition, it comes at effectively no cost to our business, as the cards themselves have no fees and the cash-back element actually ends up reducing our overhead costs. Customer support has also been fantastic and always a pleasure to work with.​” Dave Gray, Director of Canadian Operations at Metrist

We will see the rich benefits for small businesses in full when an open banking regime is in place in this country. Undoubtedly, more products and services will emerge in Canada to support the small business sector. We will certainly be hard at work developing new and better ways to help you access credit, control spend, and more.

For more information or to sign up for a Caary Business Mastercard®, visit caary.com/Ceridian.

Ceridian and Caary have embarked on a joint effort to streamline small-business payments through their complementary product and service offerings. 

Ceridian’s Powerpay, payroll, and HR technology and Caary’s credit card and spend management platform are designed to meet the needs of Canada’s small-business segment. Together, the two service providers cover the range of business payments, from employee payroll to supplier/vendor payments and employee expenses.  


©2022 Caary Capital. Caary, Caary Capital, and the Caary logo are trademarks of Six Ventures Incorporated, used under license. The Caary Business Mastercard® is issued by Peoples Trust Company under license from Mastercard International Incorporated or its Affiliates. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

John MacKinlay

John MacKinlay is the CEO of Caary Capital. He is a 25-year veteran of the investment, financial services and technology space. Prior to joining Caary, he held executive roles at PwC and IBM and served as an advisor to National Australia Bank and OMERS.

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