By Ryan Weeks on Wednesday 30 November 2016
Leading small business lender puts CEO and other members of management team on leave of absence.
CAN Capital, one of the largest non-bank lenders in the US, has announced changes to its management team. Kayla Muller, a spokeswoman for the company at Prosek Partners, announced the changes in an emailed statement, according to Bloomberg.
Per Ben McLannahan of the FT, the statement said that "some assets were not performing as expected and there was a need for process improvements in collections". CAN’s former chief legal officer Parris Ganz has been promoted to acting head of the company. Chief financial officer Arman Verjee and chief risk officer Kenneth Gang will join former CEO Daniel Demeo (pictured above) on a leave of absence.
CAN will also be hitting the pause button on lending at least until the end of the year, for now focusing on servicing existing customers. The platform expects to resume growth in originations next year. According to the FT, CAN also said in its statement that its business has “grown and evolved faster” than some of its “internal processes”.
This looks to be CAN’s “2016 moment”. The platform has thus far managed to steer clear of the negative headlines that have plagued the biggest beasts of the US online lending space for the past 12 months.
Speaking to AltFi in September, former CEO Daniel DeMeo said that there is a tendency to paint every platform with the same brush, “despite the lengthier track record of CAN Capital and some others”.
CAN has been in the business of non-bank lending for 18 years, and is responsible for over $6bn of lending. The firm has been profitable since 2007. CAN specialises in short-term loans for small business, and funds those loans using its own balance sheet.
DeMeo said in September that CAN sees itself as an alternative business finance provider, one that shouldn’t be lumped in with fintech. On the viability of the marketplace lending model, DeMeo said: “Quality of asset understanding is highest among those platforms that retain some balance sheet risk. But I can also see the benefits of diversification on the capital side, and the risks of being over-reliant on one or two funding source(s).”
DeMeo joined CAN in 2010 as chief financial officer, before being promoted to the role of CEO in 2013.