Thinking outside the box is critical to entrepreneurs and ATB Financial is prepared to do the same to leverage Alberta’s legendary entrepreneurial energy.
With the launch of its LendR initiative, ATB is embracing a crowd-source funding model to help promote diversity and growth in Alberta economy with peer-to-peer lending and a “lift lending” model for banking.
ATB is innovating to help small and emerging businesses that historically are told n when they go to financial institutions seeking funding because they typically don’t fit the traditional models banks use to assess risk.
“A lot of times in the banking sector that no isn’t based on anything negative about the business,” said Sean Ballard, Director of Innovation at ATB Financial. “It’s just that the business doesn’t fit the industry’s box of traditional lending rules so we aren’t able to say yes.”
ATB has deep roots in Alberta with more than 710,000 customers in 244 communities and its province-wide reach has made it well aware that the new economy requires an innovative approach to business incubation.
To redraw traditional boxes and involve “the crowd,” ATB needed an exemption from the Alberta Securities Commission for a ground-breaking initiative in the fast-evolving financial services sector. Launch of the program coincides with the recession in Alberta where new technology and shared workspace initiatives are creating both opportunities and challenges.
Crowd models like LendR reflect advances in technology and changes in society, Ballard said.
ATB is recruiting Founding LendRs now to make the $1,000 minimum investments that supports small business in Alberta. Each LendR will review the business seeking a loan and decide whether to join the financing. Once “the crowd” puts up half the funding goal, ATB provides the rest.
“Companies that would be candidates for loans will have a relationship with ATB, revenue, and a credit history similar to any other ATB loan,” Ballard noted. “What we don’t consider – and they might not have – are the physical assets, corporate history, and financial ratios that banks typically demand in commercial loans.”
Lending begins in June and the more Founding LendRs placing deposits the more loans ATB can facilitate.
ATB sees opportunity in Alberta. Calgary alone is home to more entrepreneurs and small business per capita than any city in Canada. Even in a recession, 3,750 businesses were started in Calgary in 2015. A young, highly educated and globally connected workforce is driving economic growth and diversity.
It’s a mindset more than anything else that determines success, Ballard said.
“The model works best with LendRs who are passionate about their local community, entrepreneurs and small business,” he said. "That affinity to entrepreneurship is really strong in Alberta, perhaps more so than any other province”
Learn more at www.ATBLendR.ca
ATB Financial is committed to serving Alberta businesses and getting advice from entrepreneurs like James Boettcher, Chief Idea Officer at Fiasco Gelato (speaking to Ed Straw, ATB's Vice-President of Strategic Business Solutions, left) helps to shape initiatives aligned with the new economy.