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Start-ups in Canada can now access revenue-based financing

By CO Staff @canadaone |

Financing options for high-risk start-ups are few and far between.

Banks want to see guarantees that the company will be able to pay back the loan, demonstrated cashflow is essential to the terms offered by the Business Development Bank of Canada, and the equity financing world (angel investors and venture capital firms) are looking for companies that can hit a home run, leaving many others without a chance to even try for first base.

It's expensive, but for Canadian start-ups looking for funding that can help them turn vision into reality, the new Revenue-Based Financing (RBF) option offered by Lighter Capital may be exactly what's needed.

"We are up front about the fact that Revenue-Based Financing is expensive compared with traditional loans," said BJ Lacklard in an interview with CanadaOne editor Julie King. "We charge between 15 and 30 percent interest. This is no more expensive than a credit card (but we offer much larger amounts) and certainly not as expensive as surrendering an equity stake in your company."

Introduced into the Canadian market on July 9, 2013, Lighter Capital offers a unique service that uses a computer platform to automate its investment review and response. As a result the response, which come in the form of a term sheet, can come in as quickly as 48 hours.

Expect to pay if you are approved for financing: loans typically range between 15 and 30 per cent, which is similar to what you might pay using credit cards, except you can access higher amounts.

Since the approach taken by Lighter Capital looks beyond the company's financial statements and FICO score, it is possible for a company to be eligible even if it isn't profitable or has a bad credit rating.

Lacklard explained to King that the company decided to enter this market to fill a gap between the banks and superstar prospects funded by venture capital firms, which encompasses over 75,000 companies with revenues ranging from $100,000 to $10 million per year.

To learn more, read our interview with Lighter Capital CEO, New Financing Option for Start-Ups in Canada or visit

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