One-On-One with Neil Wechsler
Neil Wechsler, the Chief Executive Officer at On Deck Canada had a chat with us to talk about the programs that his company provides to entrepreneurs, the initiatives he put in place since working for the company and the best product he recommends taking advantage of.
After graduating from McGill University with degrees in Civil and Common Law. Neil briefly practiced law before becoming President and CEO of Optimal Group Inc. (formerly Optimal Robotics Corp.) where he grew the company from a technology start-up to a leading NASDAQ-listed self-checkout and payments company. Today, Neil is CEO, OnDeck Canada, a leader in online small business lending.
Can you provide some background information on the newly merged entity of OnDeck Canada and how the collaboration came to be?
OnDeck Capital was founded in 2007 in New York. OnDeck expanded to Canada and in April 2019 combined operations with Evolocity Financial Group to form the new OnDeck Canada. Since 2015, we have funded combined over CAD$440 million to SMEs nationally. We had seen a trend internationally of funding small businesses with alternative financing solutions that are quick, easy and accessible to SMEs and address their needs in real-time. We were one of the first to launch in Canada by leveraging experience in the payments business (previously Mercantile Advance) and starting to offer financing services to merchants who were processing payments with us. In that business (which was a cash advance business to those merchants) sooner or later morphed into not only creating multiple products but into Evolocity Financial Group which offered both merchant cash advances and short-term business loans. As we became more successful, more visible in the Canadian market and started establishing some relationships with significant distribution partners, we decided to combine with OnDeck, a leader in online small business lending internationally, to combine our local knowledge in Canada, and our infrastructure and team with leading technology and an ever-evolving product platform. We’re now one family as the new OnDeck Canada, and we’re prepared to transform the market of alternative lending online to small businesses.
As CEO of OnDeck Canada, what can you tell us about the programs and products that the company offers for SME owners?
By joining forces and becoming the new OnDeck Canada, we are in a position to offer the broadest array of SME, non-bank, online lending products currently in the market. [This] means daily pay, weekly pay, our new Flex Funds (merchant cash advance) product and a line of credit. At the end of the day, the small businesses across Canada will have access to both fixed funds and flexible funds and we aim to provide SMEs with access to financingfrom a trusted provider who is fast and efficient. We’re looking forward to leveraging both our Montreal and Toronto teams across Canada and all the assets OnDeck brings to the table on an international scale to be the new OnDeck Canada as we go towards the back half of this year.
What makes OnDeck Canada stand out from other similar financial groups? Why should entrepreneurs choose OnDeck Canada as opposed to another company?
OnDeckhas provided over $12billion USD of small business financing internationally across the U.S., Canada, and Australia in over the last 10 years, and has also helped 100,000+ SMEs. OnDeck is a pioneer in financial technology and an international leader in small business financing. What that offers small businesses throughout Canada is not only a trusted lender on an international scale, but quick, easy, fast access capital in a way that traditionally has not been available to Canadian businesses. We use proprietary data-modelling as a form of AI decisioning that reviews real-time data based on the overall health and performance of a business. Technology has allowed us to be at the forefront of being able to provide those types of financing products that haven’t been previously provided to small merchants across Canada. I would also note if you look at various geographies across the globe, Canada lags in terms of small businesses knowing that there are non-bank alternatives. We intend to be a leader in terms of providing that knowledge to small businesses that we exist and we’re here to provide you with access to that growth capital in a very efficient manner.
You have over two decades of entrepreneurial experience in helping companies grow and increase their profits. Can you tell us about some of the initiatives you’re hoping to implement at OnDeck Canada?
We’re very proud of the fact that we’ve been able to grow profitably over the course of the last five years. We’ve done that with, what I would call, a laser-beam focus on ensuring that the customer and merchant always come first and that we are living up to what our values are. [Our values include] responding in a very effective way and flexible manner to merchants’ needs. As we’ve grown, we’ve maintained that focus on the merchant, customers and of course, our partners, and being able to deliver that same kind of merchant experience and journey that we hope. I think that’s always the most important thing that as you grow as a team to provide coast-to-coast service and expertise and being able to offer merchants in every single province a similar type of experience which is not only trusted but is a really good experience. Merchants who become not only customers but repeat and renewal customers are evidence to delivering that kind of success and in realizing your business vision is growing.
What do you believe are the biggest challenges that entrepreneurs face and how can OnDeck Canadahelp them overcome these challenges?
I think knowledge is key and providing merchants that there are alternatives available to them, wherein previous years or decades, the normal refrain was to visit a financial institution and go through the lengthily, non-automated, paperheavy and delayed process of trying to obtain capital to grow business. It’s challenging when a business owner has to do it all to a large extent. They have to deal with the normal day-to-day [operations], everything else going on in their establishment or store, doing the books, raising capital, or may have an event happen and they need to access to capital to buy a piece of equipment or deal with a cash flow issue. They need to have the knowledge there are alternative options to traditional financial services. [They need to know] we’re here to serve, we’re a trusted lender and we’re able to do it because of technology platform that’s able to deliver that kind of experience.
What is the best product that OnDeck Canada offers for startups?
In terms of startups, we focus on businesses who have been around for at least six months to be able to assess a history of credit and business performance. We do offer some startup services depending on the industry that they’re in. If it’s a startup with seasonality, for example, our variable product, Flex Funds, may be more conducive to their type of business if they accept credit cards or have a PoS system. If they accept monthly payments, we can design a product around it as well. Although we are not focused on startups, we do have ways to deal with them that address their particular type of industry they might be in.
Having worked with business leaders for several years, you’ve most likely come across entrepreneurs who have made mistakes that have significantly jeopardized the success of their business. In your expert opinion, what is the biggest mistake that entrepreneurs make and what strategies can they implement to prevent these mistakes?
A lot of small businesses are often undercapitalized. In other words, they don’t have the ability to access the capital they require in a time sensitive situation or when a [sudden] opportunity presents itself. They don’t have a rainy day fund should there be an event. In that regard, I would always say it’s not a bad thing to have excess capital to balance cashflow. I would always recommend, to a certain extent, to not be over-capitalized, but it is also critical to not be under-capitalized. Ensure you’re positioned well as far as availability of growth capital.
You have a strong reputation of helping startups turn into leading organizations in their industry. What are some of the strategies you use that have helped you create strong leading organizations?
It’s always about people – having good people around you, investing in your people, listening and responding to those people and helping them achieve whatever it is they’re [hoping] to achieve in furtherance of the success of the enterprise you are trying to build. We’re very fortunate here of having the support of really good people to focus on executing what the business vision is. We not only [speak] internally about this, but try to spread the word to all the small business owners that you’re only as good as your people and of course, your products and services you are delivering.
What was the deciding factor that led to the combination of the newly merged entity OnDeck Canada?
Becoming OnDeck Canada (formerly Evolocity Financial Group), a large focus was in terms of the people, there was a nice cultural fit. In any type of transaction, if there’s not a good cultural fit then the odds of being successful go down tremendously. So, we started there. Ultimately, it’s about commonality of vision and bringing two organizations together that are absolutely complementary in terms of the services and products they’re providing. We really believe that 1 plus 1 is going to bring you to a 3 and beyond. The objective here is clear. It’s [about] becoming the leading provider of online financing to small Canadian businesses and we’re well on our way to achieving that objective. I think there are many years ahead of us of doing this well, growing the market, taking advantage of the market opportunity for us and being the leader in Canada, providing services to small businesses that they’re looking for.
How do you believe the new OnDeck Canada will benefit SME owners?
[SME owners] are going to have access to working capital and growth capital that they traditionally did not have as much access to or awareness of prior. Traditional financing options are essential, but sometimes you need that little bit extra [funds] in a short period of time to be able to deal with cash flow issues, special projects, capital improvements or to focus on growth. We [offer] that financing that is able to scale as a coastto-coast resource Canada. The newly combined entity of OnDeck Canada will accelerate this resource and awareness of alternative online lending in the Canadian market. I think we will see a [rapid] increase in the adoption of fintech solutions.
What advice can you give to business owners who are looking to grow their company?
Don’t be under-capitalized, focused on people and make sure you have access to capital to grow. If you execute your business in a way that only you know how to do, having access to that capital will allow you to reach your objectives. Capital, people, product – those are the things I believe to be important.
What does the future of OnDeck Canada look like? Where do you see it heading 10 years from now?
I like to think in three-year plans. What I can tell you is you’re going to see OnDeck be the leader in Canada; helping small businesses to grow by providing a variety of financing solutions. What we’re proud of is that we are going to have one of the broadest array of small business finance products available in an online world and that offering is going to continue to grow as the next three-year plan rolls out. There are additional products on the horizon that we’re going to offer, but we’re going to be doing this on a focused way to ensure merchants have a very positive experience by coming to OnDeck Canada.
Prior to choosing the path of entrepreneurship, you were a practicing lawyer. What made you decide to change your career path?
I don’t regret at all having a legal education and background. I can say that I use it almost every day even thought my legal career was short-lived. I started as a startup and then a small business entrepreneur. What has been most gratifying, as I’ve grown different businesses, is watching those businesses grow and having great people around bringing all different skills to the table. What drove me to do that is I knew that is what I wanted to be doing every day. Obviously, not every day is sunny out. For the most part, if you’re going to choose to spend as much time as we all do in our daily lives working, you have to enjoy it. I really enjoy the people I have around and I enjoy learning from them. Hopefully, we’re sharing experiences, as well being successful in what we do. We build on the foundation that we have and we try to grow personally and professionally, and that’s what’s gratifying to me. Over the last 25 years, it’s been relatively successful and I’m proud of that.