February 6, 2019
CLA rolls out transparency tool to SME lenders
TORONTO--The Canadian Lenders Association (CLA) in collaboration with Navigant and the Innovative Lending Platform Association begins to rollout the SMART Box™ program. SMART Box™ is a pricing disclosure model and comparison tool that will enable Canadian small businesses to better assess and compare their debt finance options. In 2018, SMART Box™ was successfully adapted by the CLA for the Canadian market.
SMART Box™ was introduced to the U.S. by the Innovative Lending Platform Association (ILPA) in October 2016 in response to a need for common language and standardization in pricing disclosure in small business finance. It includes clear and consistent pricing metrics, metric calculations, and explanations to help small businesses understand and assess the costs of their finance options. SMART Box™ was developed in consultation with key small business stakeholders, including lending platforms, policymakers, not-for-profit organizations, small business owners, and small business advocates. The CLA has modified the SMART Box™ templates to address the needs of the Canadian market and conform to Canadian regulatory requirements.
“The CLA is looking forward to collaborating with Navigant to expand the use of SMART Box in Canada and to serve and support our growing client base,” said Gary Schwartz, president of the CLA. “Combining the CLA’s tools to innovate, grow, and foster safe and ethical lending practices with Navigant’s know-how represents a significant opportunity for small businesses in Canada to better understand and assess the costs of their finance options.”
Navigant is working with Canadian commercial lenders who adopt SMART Box™ to validate that their annual percentage rate (APR) calculation methodology on small business instalment loans is consistent with the APR calculation methodology outlined in the Ontario Consumer Protection Act, 2002 as if such small business lenders were subject to that Act. Canadian lenders will benefit from Navigant’s experience with the U.S. SMART Box, which adopts the calculation methodology in the U.S. Truth In Lending Act as implemented by Regulation Z.
“We’re excited to work with the CLA to further expand the use of the SMART Box comparison tool to help standardize pricing metrics for small businesses in Canada,” said Christopher Sicuranza, managing director and co-lead of Navigant’s banking, insurance and capital markets practice within the Financial Services Advisory and Compliance (FSAC) segment. “This is a great opportunity to apply Navigant’s deep expertise in lending regulation to create a win-win both for lenders and for small businesses.”
Navigant’s FSAC segment advises banking, insurance, and investment management firms to enhance and streamline compliance, manage risk, safeguard reputations, and create competitive advantage. Navigant helps clients address issues related to regulatory compliance, risk management, process improvement, business model transformation, information technology, and outsourcing.
The Canadian Lenders Association (CLA) supports the growth of companies in the Canadian market that are in the business of lending, or providing other means of credit, to small businesses and individuals by non-conventional or innovative means. The CLA: facilitates the exchange of ideas to improve the lending sector; encourages principled and professional practices by innovative lenders; educates the public at large about innovative lending; encourages individual potential borrowers to be informed about the appropriateness of innovative lending to the borrowers’ circumstance; and advocates on behalf of, and represents the interests of innovative lenders. www.canadianlenders.org
Navigant Consulting, Inc. (NYSE: NCI) is a specialized, global professional services firm that helps clients take control of their future. Navigant’s professionals apply deep industry knowledge, substantive technical expertise, and an enterprising approach to help clients build, manage, and/or protect their business interests. With a focus on markets and clients facing transformational change and significant regulatory or legal pressures, the firm primarily serves clients in the healthcare, energy, and financial services industries. Across a range of advisory, consulting, outsourcing, and technology/analytics services, Navigant’s practitioners bring sharp insight that pinpoints opportunities and delivers powerful results. More information about Navigant can be found at navigant.com.
The Innovative Lending Platform Association (ILPA) is the leading trade organization representing online lending and service companies serving small businesses. United by a shared commitment to the success of small businesses in America, the ILPA advances best practices and standards that support responsible innovation and access to capital for small businesses. In 2016, the ILPA, in partnership with the Association for Enterprise Opportunity, introduced the SMART Box™, which stands for “Straightforward Metrics around Rate and Total cost,” in 2016. The SMART Box is a first-of-its-kind model pricing disclosure and comparison tool focused on empowering small businesses to better assess and compare finance options. The SMART Box is available for broader adoption by lending platforms.