CrowdLending (Business) - Canada | Statista Market Forecast

The total transaction value in the Crowdlending (Business) market market in Canada is expected to reach US$10.01m in 2024.
When compared globally, it is evident that the highest transaction value is anticipated China (US$16bn in 2024).
Canada's CrowdLending market is gaining traction as more businesses turn to alternative capital raising options amid traditional financing challenges.

Definition:

Crowdlending platforms, otherwise know as lending-based Crowdfunding enable small and medium-sized enterprises to get loans from single or multiple, private and institutional investors via an online brokering platform. On credit platforms such as Funding Circle, OnDeck, Kabbage and Lending Club, businesses can obtain small loans up to a set maximum value. As a rule, financing requests are analyzed by the provider via an internal scoring system and are checked against additional minimum requirements such as turnover. Subsequently, these financing requests can be invested in by private and institutional investors at an appropriate interest rate determined by the credit rating of the company. This makes it possible for SMEs to borrow quickly and easily, as the basic requirements for obtaining finance are more flexible compared to traditional bank loans.

Alternative financing for SMEs and freelancers (bank-independent loans)
Small business loans issued by single or multiple private and institutional investors (non-banks)
Online loan request, scoring and approval

Traditional bank loans
Consumer loans and credit card transactions
Business-to-Business credit scoring and rating services
Online marketplaces for consumer loans (see Marketplace Lending)

The CrowdLending (Business) market in Canada has been experiencing significant growth in recent years. This can be attributed to several factors, including customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Canadian businesses have shown a growing preference for alternative lending options, such as CrowdLending. This is due to the ease and convenience of accessing funds through online platforms, as well as the ability to secure loans without the need for traditional collateral. Additionally, many businesses appreciate the transparency and competitive interest rates offered by CrowdLending platforms.

Trends in the market: One of the key trends in the CrowdLending market in Canada is the increasing participation of institutional investors. As these investors recognize the potential returns offered by lending to businesses, they are allocating a larger portion of their portfolios to CrowdLending platforms. This trend has led to a greater availability of funds for businesses and has contributed to the overall growth of the market. Another trend in the market is the emergence of specialized CrowdLending platforms catering to specific industries or sectors. For example, there are platforms that focus exclusively on lending to small businesses, while others specialize in financing renewable energy projects. This trend reflects the growing demand for tailored lending solutions and provides businesses with access to lenders who understand their unique needs.

Local special circumstances: Canada has a well-developed financial sector, which has facilitated the growth of the CrowdLending market. The country's strong regulatory framework and investor protection laws have instilled confidence in both borrowers and lenders, making it an attractive market for CrowdLending platforms. Furthermore, the Canadian government has implemented various initiatives to support small and medium-sized enterprises (SMEs), such as tax incentives and loan guarantee programs. These measures have encouraged businesses to seek financing through alternative channels like CrowdLending, further driving the growth of the market.

Underlying macroeconomic factors: The Canadian economy has been performing well in recent years, with steady GDP growth and low unemployment rates. This favorable economic environment has created a conducive climate for businesses to seek financing and invest in growth opportunities. CrowdLending platforms have capitalized on this demand by providing accessible and flexible funding options to businesses across various sectors. Additionally, the low interest rate environment in Canada has made traditional bank loans less attractive for businesses. As a result, many businesses have turned to CrowdLending platforms, which offer competitive interest rates and more streamlined application processes. In conclusion, the CrowdLending (Business) market in Canada has experienced significant growth due to customer preferences for alternative lending options, trends in the market such as increased institutional investor participation and specialized lending platforms, local special circumstances including a strong financial sector and government support for SMEs, and underlying macroeconomic factors such as a favorable economic environment and low interest rates. These factors have contributed to the development and expansion of the CrowdLending market in Canada.

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Crowdfunding is the collective effort of a large number of individuals who network and pool small amounts of capital to finance a new or existing business venture. Each campaign is set for a goal amount of money and a fixed timeframe, each day is counted down and the money raised will be tallied up for visitors to follow its success. The size of the global crowdfunding market is growing and the largest markets are North America and Asia.