Small-Business Lender CAN Capital Replaces CEO, Promotes SanzBy and
CAN says it has underperforming assets, must fix collections
Sanz, a lawyer, joined in 2004 and heads executive committee
CAN Capital Inc., one of the first and biggest online small-business lenders, promoted Parris Sanz to acting chief executive officer as it identifies underperforming assets and moves to improve its collection processes.
CEO Dan DeMeo and “two other members of his team” are on leave of absence, Kayla Muller, a spokeswoman for the company at Prosek Partners, said Tuesday in an e-mailed statement. Ritesh Gupta was promoted to chief operating officer.
Sanz joined CAN Capital in 2004 and has been chief legal officer, chief compliance officer and executive vice president, Muller said. He oversees the company’s executive committee. DeMeo joined in 2010 as chief financial officer and was promoted to CEO in 2013, leading it through a period of rapid expansion for the industry. The firm was considering an initial public offering in 2014, people familiar with the matter said at the time.
Many of the largest U.S. online lenders struggled through 2016 after years of rapid growth. Shares of OnDeck Capital, CAN’s biggest competitor, are down 55 percent this year amid increased competition and concerns regulators will clamp down on the business model. LendingClub Corp. replaced its CEO in May, rattling debt investors already focused on an uptick in defaults. Avant Inc. slashed its target for new loans and reduced its workforce in June, eight months after its founder said he was building "the Amazon of financial services." And Prosper Marketplace Inc.’s CEO resigned this month over a dispute.
CAN Capital, whose financial backers have included venture-capital firm Accel Partners, makes short-term loans to small businesses, like restaurants or contractors. The firm said in April that it had arranged $6 billion in loans since it was founded in 1998. Last year, CAN Capital said it secured a $650 million credit facility from lenders led by Wells Fargo & Co. A spokeswoman for Wells Fargo declined to comment.