How the right business loan helps entrepreneurs reach new potential
Frank Shooflar knew he had a solid plan to build a profitable business when he dreamt up Wazo Furniture. He had the grit, talent and advertising strategy needed to turn this one-man show into a recognizable company with more than 20 employees, but that transformation couldn’t happen without a financial partner who saw the same potential he did.
At the time, he was operating Wazo Furniture out of his garage but the company was growing and needed a showroom.
“I really believed in Wazo, so I used all my savings, maxed out my line of credit and all my credit cards,” Shooflar said.
Once that money ran out, Shooflar applied for every additional credit card and line of credit he could think of, but kept getting refused.
For many entrepreneurs, that in-between stage is critical. They’re too small for some traditional lenders but too big to finance themselves – and failing to get the money they need to act on a strategic opportunity can really derail their plans.
That interim phase – which can often make or break a business – represents a niche being filled by FinTech lenders like Evolocity Financial Group.
“Getting access to capital is a big part of being able to achieve on your growth – a lot of people have great ideas and great ambition, but if you don’t have the capital and you don’t have the ability to be able to execute on your plan, then it’s tough to do,” said David Souaid, president and co-founder of Evolocity.
Evolocity offers short-term financing to small and medium-sized businesses across Canada. Their approach is a bit different compared to traditional lenders because while they may be on the other side of the table now, they were once entrepreneurs beginning a business themselves.
“As we went through some of these challenges ourselves, we understand it,” said Souaid.
“They’re starting a business, they’re one or two years in, they want to continue that growth but they don’t have access to the additional capital they need to make it happen.
“This is that extra piece that they’re looking for.”
Evolocity’s unique credit underwriting model is what enables them to finance businesses that have experienced challenges in gaining access to funding. It focuses on things like cash flow, credit card sales data, and even Yelp or TripAdvisor reviews to assess the credit worthiness of a would-be borrower.
“Our decisions are based on a risk-scoring model that has access to hundreds of data points, so we’re not only reviewing the principal’s credit,” said Souaid.
Thanks to Evolocity, Shooflar was able to obtain the funding needed to take his business to the next level. For companies like Wazo, now big enough to qualify for bank financing, having access to capital during that in-between period, is a game changer.
Lenders like Evolocity have become an integral part of the ecosystem for entrepreneurs because, “they take on the risks that the banks aren’t comfortable taking to help small businesses grow,” said Shooflar.
In Wazo’s case, that means opening a Toronto location in the near future, and plans to add five additional stores in the next three years – a level of growth that may have been difficult for some investors to foresee when they were approached by a guy selling furniture out of his garage two and a half years ago.
This story was created by Content Works, Postmedia’s commercial content division, on behalf of Evolocity. As seen on the Montreal Gazette.