Toronto-based exempt market dealer Lending Loop is relaunching its peer-to-peer lending business, the company announced on Monday.
Lending Loop, Canada’s first peer-to-peer lender, has once again opened its doors after completing its registration with the Ontario Securities Commission (OSC) and other securities regulators.
The firm is not currently registered in Quebec, but says that it hopes to expand there soon.
“While peer-to-peer lending has been highly successful across the globe, we had to navigate some unique regulatory challenges in order to bring this business model to Canada,” says Cato Pastoll, CEO and co-founder of Lending Loop, in a news release.
Lending Loop initially launched in late 2015, but shut down in March of this year, and began the process of registering as an exempt market dealer after regulators determined that it was effectively dealing in the securities. Under the firm’s model, investors can buy notes that represent fractions of loans to small businesses that need operating capital. Borrowers make fixed monthly payments and investors earn interest as the principal is repaid.
An EMD licence allows Lending Loop to “offer this innovative business model in a fully regulated manner, while ensuring its sustainability in the Canadian marketplace,” the company says.
“It can be challenging for new entrants and regulators to adapt novel business models to existing regulations, and we’re extremely proud to be pushing this industry forward. We’re bringing a new form of finance to Canada that makes capital more accessible for small businesses while offering a brand new asset class to all Canadians,” adds Pastoll.
Lending Loop’s announcement comes on the same day as the OSC is touting the debut of its new fintech LaunchPad, which aims to help innovative startups to understand, and comply with, existing regulatory requirements, and may also grant regulatory relief to new firms as part of an overall mission to help foster innovation in the financial sector.
See: OSC introduces fintech innovation hub and regulatory sandbox