Small business loan provider Lendified announced today that its subsidiary Vault Circle has received regulatory approval for marketplace lending from the Ontario Securities Commission (OSC).
The approval, which consists of a market dealer license from OSC, will allow the company to connect investors to small businesses owners and provide them with capital. Lendified says that the approval is a milestone for the company as it makes it the first online lending business in Canada to receive regulatory approval.
“The OSC approval represents a historic leap forward for Canada’s FinTech sector.”
“The OSC approval represents a historic leap forward for Canada’s FinTech sector,” said Marcel Schroder, the managing director and chief compliance officer of Vault Circle. “Once launched, our platform will provide accredited investors with access to an exciting alternative investment option not available in Canada today.”
In order to get approval, Lendified and Vault Circle say they worked closely with the OSC’s staff to ensure that both regulatory requirements were met and that those requirements were tailored to Vault Circle’s online lending business. Lendified’s announcement also comes shortly after the OSC’s announcement of a LaunchPad Hub to help FinTech startups navigate the provinces’ regulatory framework. The cooperative approach taken by the OSC might be considered a good signal for fellow Canadian FinTech startup Lending Loop, which voluntarily halted new loan requests on its platform after questions of compliance with the Ontario Securities Act.
“As well as offering a new opportunity to investors, this approval strategically provides Lendified with another source of funding to meet the growing demand for online small business loans in Canada and marks another chapter in our continued growth story,” said Troy Wright, the founder and CEO of Lendified.
While the OSC approval applies to Ontario only, Lendified is planning to expand into other markets in the future. The announcement comes shortly after Lendified announced that it secured $24 million in funding for its online lending activities. The company also recently announced an increase in its lending capacity from $35,000 per loan to a maximum of $150,000 per loan for small business owners.