Pivot Financial is a Toronto-based private lender to small and mid-sized enterprises (“SMEs”) located across Canada with borrowing needs between $1 million and $10 million. We act primarily as an alternative to Canadian banks, providing senior secured lines of credit, term loans and subordinated debt to manufacturers, distributors, service providers and retailers.

Tell us about yourself?

The majority of my career has been spent working for Canadian and U.S. banks, serving Canadian SMEs, including senior roles in asset-based working capital lending, equipment leasing, real estate financing and subordinated debt divisional platforms. I’ve always enjoyed working with entrepreneurs, and we tend to attract staff with a similar passion and professional background.

If you could go back in time a year or two, what piece of advice would you give yourself?

There will always be challenges and setbacks. Don’t stress too much in the moment, maintain a long-term perspective and try to have fun in the process.

What problem does your business solve?

We provide non-dilutive (no equity participation) senior and subordinated debt solutions to businesses in transition that don’t fit pre-defined bank criteria. Typical profiles include businesses that are in special loans with their existing lender with viable business plans that require additional capital, acquisitions or shareholder buyouts that require time-sensitive execution, or businesses that are expanding rapidly.

What is the inspiration behind your business?

We recognized a gap in the market for a creative private lender to meet the needs of SMEs. The bank approach in this segment is somewhat formulaic and generally slow to respond to the requirements of these businesses. In most cases, businesses are well served by this traditional approach. Often, they are not, however, and there are very few alternatives in this mid-market segment in Canada.

What is your magic sauce?

We have a relatively small group staffed with very seasoned commercial banking professionals who are able to execute much quicker than larger traditional institutional lenders. We approach each situation as a “blank canvas” and structure our facilities to address the specific requirements of each business. The integrity and track record of a management team are important considerations in our approach, more so than historical balance sheet or income statement metrics.

What is the plan for the next 5 years? What do you want to achieve?

We’d like to triple the size of our business. Having said that, we’re more focused on hiring and developing the right staff to meet the needs of our clients and prospects while generating an acceptable and steady return for our investors. If we execute on those objectives, profitable growth should take care of itself.

What is the biggest challenge you’ve faced so far?

Raising capital has been an ongoing challenge. The private debt market in Canada is not nearly as mature as it is in the U.S. from an institutional and retail investor perspective. With the benefit of a favourable five year track record behind us, that task has been getting progressively easier.

How can people get involved?

We’d welcome an opportunity to tell our story to investors who are interested in gaining exposure to this segment of the market. The returns we generate are non-correlated to publicly traded equities and bond markets and, to date, have been much better than short-term investments such as GICs. And, of course, any introductions to Canadian SMEs whose financing requirements are not being adequately addressed by their existing lending partners would be appreciated.