Pivot Financial lends $1 million to $10 million to Canadian companies that don’t fit the banks’ approach — and publishes what that money
costs. The people making the credit call spent decades inside the institutions now saying no.

A bad quarter trips a covenant. The file moves from the relationship manager to the group whose job is to reduce the bank’s exposure, and a company still shipping product, still collecting receivables and still making payroll has 90 days to find another lender.

The trade calls that forbearance. It appears, without euphemism, on the short list of situations one Toronto private lender says it will fund — alongside turnarounds, growth, refinancings and bridges. That is not a footnote about exceptions. It is a description of the customer.

Fourteen to Eighteen Per Cent, Stated Up Front

Private credit tends to be coy about pricing. This firm is not. Its lending products page carries the numbers: $1 million to $10 million, at 14 to 18 per cent annually, on terms of six to 24 months, renewable for a one per cent fee. Three shapes are offered — revolving asset-based lines built on a borrowing base, senior term loans and subordinated term loans — secured in most cases by a first general security agreement and topped up with personal guarantees where the lender requires them. Any industry qualifies, provided the head office is Canadian.

Posting rates filters inquiries before anyone picks up the phone. It also invites the comparison every borrower makes anyway, against a bank’s prime-plus operating line — an argument the firm seems content to have, because the honest alternative for most applicants is not a cheaper loan. It is no loan, a forced sale, or an equity round that costs the owner a piece of the company.

“We recognized a gap in the market for a creative private lender to meet the needs of SMEs,” CEO Dan Flaro said in an interview the company republishes on its own blog. The target is modest in scale — one to 100 employees, $1 million to $100 million in revenue — and the stated method is to “start with a blank canvas” rather than run applications against a fixed credit box.

Seasoned Bankers, Much Smaller Balance Sheet

The team page reads like an alumni list from the lenders these borrowers have just left. Flaro, a CFA and Queen’s commerce graduate, was a senior vice-president at Fifth Third Bank and a vice-president in Scotiabank’s asset-based lending division. Doug Palmer spent 32 of his 35 years in financial services at Bank of Montreal, as a regional president and head of corporate finance. Steve Matheson put in 24 years in executive roles at HSBC Canada. Craig Dootson, who runs portfolio administration, came up through asset-based lending most recently with Bibby Financial Services.

Flaro’s framing of the advantage is operational rather than philosophical: “a relatively small group staffed with very seasoned commercial banking professionals who are able to execute much quicker than larger traditional institutional lenders.”

“One of our goals is to ensure that our SME clients and prospects are advocates of ours, by executing with integrity in a very timely manner. That’s more easily accomplished with a small team of seasoned professionals.”

Which is the quietly interesting part. The credit judgment on these files is made by people trained to make it at institutions where the answer would now be no — not because the analysis differs, but because the cost of capital and the regulatory perimeter do.

The Whole Business Runs on Referral

Read the published transaction list and one sentence keeps recurring. “We were introduced to Pivot through a trusted advisor,” says the CEO of a mechanical contractor. “Pivot was referred to us by an existing client in the branded consumer products space,” says a gelato manufacturer’s chief executive. Accountants, restructuring advisors, investment bankers, past borrowers — that is the origination engine. Slow to build, hard to copy, and self-disciplining: an advisor who sends over a bad file stops being a source.

The deals themselves are unglamorous and specific. A $2.1-million revolving and term facility for a waste disposal company in August 2025, requiring a debt restructuring. A $3.5-million line for a beer importer refinancing its incumbent lender. A $1.5-million revolver for the gelato maker, alongside co-lender Farm Credit. Speed of execution is demonstrated where the files demanded it.

Raising It Before Lending It

Lending is only half the operation. The company calls itself “an asset manager that deploys funds on behalf of institutions, retail investors, high net worth individuals, its management team and shareholders” — it must raise the money before it can place it. Its investor page is as blunt about entry points as the borrower page is about rates, starting at $25,000 for accredited investors and running to $2 million for portfolio managers and family offices.

Flaro has named that side as the binding constraint. “Raising capital has been an ongoing challenge,” he said. “The private debt market in Canada is not nearly as mature as it is in the U.S.” Demand is not the problem. Canadian SMEs whose banks have lost interest are not in short supply. The scarce inputs are money and seasoned bankers who are passionate about helping SMEs — when asked about growth, Flaro talked about the second one first.