Summary:
In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, and host interviews Cato Pastoll, CEO at Lending Loop, an alternative lender to small businesses. Cato Pastoll talks about personal and business credit ratings as well as his work at Lending Loop.
Episode Highlights:
● 00:39 – Jason Pereira introduces Cato Pastoll.
● 01:00 – Cato Pastoll describes who he is and what he does.
● 01:50 – What are personal credit scores, how do you get them, and what impacts them?
● 05:50 – What is a healthy credit utilization amount?
● 08:48 – Payday loans can hurt your credit more than loan-term bank loans.
● 09:38 – What are the differences between a soft hit and a hard hit to your credit score?
● 11:31 – The length of your borrowing history also affects your credit score?
● 13:18 – What advice does Cato have for people to maintain a good credit score?
● 15:53 – Check for errors on your credit report.
● 16:30 – Have accounts and credit cards with different banks and lenders.
● 18:23 – What goes into a corporate credit score and how does it differ from personal credit scores?
● 21:20 – What is firmographic data?
● 22:32 – Businesses that have liens against them represent risk to lenders.
● 26:15 – Collections and judgements do come into play on corporate credit scores.
● 28:43 – Lending Loop is the first of its kind in Canada.
● 31:22 – Lending Loop helps businesses establish credit and sources of financing.
● 32:27 – How do they onboard people and provide them with information on quotes?
● 34:50 – Lending Loop is handling loans from anywhere between $5000-$500,000.
● 35:14 – Their interest rates range from 5.9%-26.5%.
● 36:33 – How much can lenders offer a business and what is the process?
● 38:38 – Cato Pastoll discusses Lender Loop’s proprietary risk score.
3 Key Points
1. The 5 factors that impact your personal credit score are payment history,
utilization amount, credit history, inquiries, and the length of your borrowing history.
2. Set up pre-scheduled credit card payments to prevent being late.
3. Keep credit utilization under 35%.
Tweetable Quotes:
● “Lending Loop is an online marketplace lending platform. What we do is connect small businesses that are looking for an affordable source of financing with investors that want to lend money to their businesses.” – Cato Pastoll
● “Being diligent with your payments, it’s not just going to help your credit score, it is actually going to help when lenders or other people look at your credit report. Is this someone who is reliable?” – Cato Pastoll
● “A lot of business owners when they get started will either borrow against their personal home equity or they will borrow on personal credit cards, and that actually doesn’t necessarily benefit their business credit.” – Cato Pastoll
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Cato Pastoll’s Linkedin
● lendingloop.ca – Website for Lending Loop
● getloop.ca – Free Personal and Business Credit Scores from LendingLoop
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