Finance

Loop Financial Review - Modern Banking for Small Businesses

Paul Sharpe, CPA, CA
/
November 24, 2023

Affiliate disclosure

Loop Financial Review - Modernizing Canadian SMB banking with multi-currency solutions, seamless global transactions, and innovative financial tools.

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Loop Financial - An Avalon Review

In today's fast-paced business world, Canadian banking for small and medium-sized businesses (SMBs) has struggled to keep up.  Many of the big banks are stuck in the past, running on systems that are antiquated and way behind other industries.

Enter Loop Financial, a trailblazer in modern banking, specifically designed for entrepreneurs.

Loop Financial Logo

Loop Financial, is a Toronto-based fintech company that has transformed the way Canadian small and medium-sized businesses handle their financial needs. 

Loop offers a range of innovative financial tools specifically designed for SMBs, including:

  • Multi-currency Business Credit Cards
  • Global Business Banking
  • Multi-currency Supplier Payments (Payables)
  • Multi-currency Customer Payments (Receivables)
  • Cost-effective Foreign Exchange Conversions
  • Custom Financing and Credit Solutions

Each service is aimed at empowering small businesses with modern banking and expense management tools.

This review delves into the details of Loop Financial’s products and services. It also discusses how Canadian businesses can use Loop to reduce costs, save time, and expand their global footprint. 

Loop Financial - Review Summary

Here’s a quick summary of our Loop Financial review. Read the full article below for details.

Loop Financial Review Score
Loop Financial Overall Score - 4.5/5

Loop Financial aims to modernize Canadian banking for small and medium-sized businesses (SMBs) by offering innovative and comprehensive financial solutions. 

Global Bank Accounts

As a one-stop financial platform, Loop provides digital bank accounts in major currencies (CAD, USD, EUR, GBP), enabling businesses to easily manage international transactions while reducing FX fees. 

Multi-currency Credit Cards

Its corporate multi-currency credit cards come with advanced spend management technology, simplifying expense tracking and budgeting.

Flexible Credit Cards

Credit cards can be either physical cards or virtual. Create spending rules and individual credit limits for cards and share them with team members who will be making purchases for the business.

You can also choose between prepaid credit cards where no credit check is required, or the traditional credit card model where you make purchases and then pay the card off each month.

Send and Receive Payments

Get paid quickly and save on credit card transaction fees by requesting payments from your customers or clients. 

You can also easily pay vendors in Canada or abroad and save on FX fees with Loop financial.  

Accounting Integration 

Loop offers seamless integration with Xero and QuickBooks Online (QBO), streamlining the accounting process.  

AP and AR workflows are also integrated with your accounting system to make supplier payments and customer collections easier.

Lower Currency Conversion Costs

Reduce expenses by taking advantage of Loop Financial’s reduced currency conversion costs. Save on FX fees not just when compared to the big banks, but also when compared to even Wise or OFX.

Replace Multiple Platforms

Loop's all-in-one approach aims to replace multiple platforms, offering a unified solution for banking, credit card management, foreign exchange, and accounting. 

This makes Loop an excellent replacement for a tech stack that includes services like Plooto, Dext, Float, and Wise.

Loop Financial Replaces Dext Wise Plooto and Float

Loop MasterCard

The Loop Card is an innovative solution for businesses navigating the global market. It's a corporate Mastercard that provides the flexibility of handling multiple currencies including USD, CAD, GBP, and EUR. 

This multi-currency feature eliminates foreign transaction fees, offering significant savings for businesses engaged in international transactions.

Loop Financial - Loop Mastercard

How Loop Card Works

Users of the Loop Card can effortlessly switch between different currencies, enabling them to spend and manage funds in the currency that best suits their business needs. 

This flexibility is particularly beneficial for businesses that deal with suppliers and customers in various countries. If you’re a Canadian business and are using a CAD credit card to transact in other currencies, the Loop Card can significantly reduce your foreign exchange costs.

Loop Card also streamlines business spending, expense tracking, and reporting by giving customers the best combination of accessibility, management, and automation.

‍The general steps to getting started with Loop Card are:

  1. Apply - Submit a 5-minute application and get approved in as little as one business day. 
  2. Fund Account - Loop prepaid cards operate on a prepaid model that is funded by your business bank account. Connect your bank account and quickly add funds to your Float account.
  3. Create Card(s) - Create and customize virtual and physical cards through the web application or mobile app.  Physical cards are shipped in just a few days.  Virtual cards can be instantly created.
  4. Start Spending - Once funded, you can start using physical cards just like any other credit card, or use virtual cards for online or over-the-phone purchases.
  5. Track Expenses - Using Loop’s web application or mobile app, you can track every transaction and receipt in real-time. You may also receive notifications for spend requests through email or Slack integration.
  6. Manage Cards - Add new cards, change card limits, add or remove employee access and set rules for each card’s spending. You can edit, approve, and deny requests, all through the straightforward online dashboard.
  7. Automate Receipt Collection - Loop’s OCR technology automatically matches your receipts to your transactions via SMS. Get rid of shoe boxes filled with receipts or scrambling at month end.

Rewards System

Loop offers a simple rewards system so businesses can earn rewards while saving on foreign exchange fees. Points can be redeemed for gift cards, with additional options becoming available within the year.

Loop Mastercard Rewards Program

Users of the free plan will receive 1 point per $1 spent on the credit card. Users of the paid plans earn rewards at a rate of 2 points per $1 of spend.  There are also bonus rewards available for completing various activities and milestones.

Loop Financial Dashboard

Loop Global Business Banking Platform 

Loop Financial's business banking platform is tailored for global business needs, offering multi-currency support and easy-to-use features.

Loop Financial Global Business Banking

How Loop Global Business Banking Works

Once you’ve funded your Loop account, you can easily open US, UK and EU domiciled accounts in just a few clicks so you can skip conversion fees, get paid faster and make free global payments.

Loop banking is based on real bank accounts and not just currency wallets like other similar service providers. This means you get local banking details in each currency that Loop supports. Collect payment from local customers or POS platforms directly into your account for the applicable currency.

  • One-Click Transactions - Make payments quickly with just one click.
  • Real-Time Balances and Cash Flow Tools - Keep track of your money with up-to-date balance information and tools to manage cash flow.
  • Integrate Business Accounts and eCommerce Platforms - Connect your business bank accounts and eCommerce platforms like Amazon and Shopify directly to Loop for streamlined transactions.
  • Multi-Currency Bank Accounts - Open bank accounts in USD, GBP, and EUR quickly and for free. Send and receive payments in other countries for free.
  • Efficient Payment Management - Loop chooses the best way to send money based on where it's going, like ACH for US suppliers and EFT for Canadian or UK suppliers.
  • No Account Fees - There are no minimum deposit requirements or limits on receiving money. For more features and lower rates, you can upgrade starting at $49 a month.
  • Cross-Border Payments - Send payments globally in over 37 currencies. Add details of people you pay often for quick payments, with recipients getting the money within 1 business day.

The platform provides Canadian small businesses with the tools they need for effective and efficient international transactions.

Manage Supplier Payments

Loop Financial offers an advanced platform for managing payables globally, with features designed for efficiency, security, and cost-effectiveness:

  • Global Payments - Businesses can send payments to over 180 countries in 37 currencies, offering a broad range of international transaction capabilities.
  • No Fee Transfers - Enjoy the convenience of unlimited, no fee global transfers, significantly reducing transaction costs for businesses.
  • Efficient and Fast - Loop identifies and uses the fastest possible route for payments, ensuring quick transactions without any wire fees.
  • Enhanced Security and Control - The platform is built with security in mind, featuring two-factor authentication and customizable approval rules. 

These features allow for secure creation and sending of payments, giving businesses greater control and peace of mind.

Efficient Receivables Management

Loop’s global banking also enhances the process of collecting payments from international customers.

  • Quick Collections - With Loop, businesses can receive payments rapidly, bypassing the delays often associated with traditional banking. Payments from international customers can be processed in minutes, not weeks, simplifying the collection process.
  • Global Billing Solution - Loop's global billing system eliminates costly credit card processing fees and wire fees, also shortening long payment timelines.
  • Real-Time Payment Visibility - Track the status of customer payments in real-time with highly traceable invoicing, providing clear financial insights.
  • Streamlined Payment Dashboard - Manage all customer payments through a simple, user-friendly dashboard. Loop’s integration with accounting systems allows for automatic reconciliation, ensuring accurate and up-to-date financial records.
  • Ease of Use - Collecting payments is made easy with a few clicks, doing away with the need for checks, branch visits, and long waits.

Loop’s approach aims to speed up the collection process and add a layer of efficiency and accuracy to the financial management of receivables.

Access to Credit

Loop Financial Credit for Businesses

Loop Financial also provides access to credit, crucial for businesses looking to grow and compete in the eCommerce market.

They offer flexible credit card limits based on your business’ credit history or they can even base it on your company’s sales data if you’re a new business.  Businesses can also obtain receivables financing to collect cash from invoices in advance.

  • Flexible Credit Options - Access credit in CAD or USD with limits based on your revenue, offering a versatile solution for diverse business needs.
  • Transparent and Fair Terms - Benefit from transparency with no dilution, royalties, or hidden fees. Competitive interest rates starting at 1.2% for Invoice Financing and 1.5% for PO Financing help businesses grow without sacrificing equity.
  • Use of Capital Services - Use Loop's capital services for a range of business activities like fulfilling purchase orders, launching in new markets, acquiring inventory, advertising, and team expansion.
  • High Credit Limit - Access credit of up to CAD $1,000,000 with flexible repayment terms. 
  • Innovative Financing Options - Including Purchase Order Financing (up to 70% of the order value) and Invoice Financing (up to 90% of the invoice value), helping businesses manage cash flow and take on more orders.
  • Affordable Borrowing Costs - Interest rates range from 1% to 2% per month on the outstanding balance, with a monthly access fee to maintain the financing solutions.
  • Capital Management - Distribute funds across your team and manage capital efficiently through the Loop dashboard, enhancing team efficiency and financial visibility.

Loop Financial Pricing

Loop’s pricing comes in three tiers: a free version, Loop Plus at $49 per month,  and Loop Power at $199 per month.

Loop Financial Pricing

Loop Free

The free version is a great option for early stage businesses or those looking for corporate credit cards, flexible foreign exchange, and multi-currency banking.

Loop Plus $49 per Month

Loop Plus offers a discounted FX rate, double the reward points on credit card spend and a lower processing fee on “request payments” AKA billing.

This pricing tier can further reduce FX costs for businesses converting a significant amount of currency.  It’s also great for those with higher monthly credit card spend because the reward points are doubled.

Loop Power $199 per Month

Loop Power offers a further discounted FX rate and custom credit card rewards. It’s not clear what “custom rewards” means, but I imagine it’s higher than Loop Plus.

Businesses using this tier will also get a dedicated support person to help take advantage of all of Loop’s features.

Who Should Use Loop Financial?

Loop takes Canadian business banking a few leaps in the right direction. It’s easy to set up, free to use and has some great features.  

Businesses Tired of Antiquated Canadian Banking

The Canadian banking system is behind the times when compared to other countries.  If you’re looking for a modern take on business banking, Loop is certainly a great place to start.

New Businesses Needing a Credit Card

New businesses without a credit history can obtain credit by using real-time sales data instead of credit history.

For businesses that are pre-revenue and have no credit history, prepaid credit card options are available. These businesses can fund their Loop Mastercard with cash from their bank account and then spend it as usual with their Loop Mastercard.

Business Earning Revenue in Foreign Currencies

Businesses are losing 2-5% of foreign revenues by having payouts sent to Canada. 

For example, Amazon, Paypal, Shopify etc. are doing forced conversions for CAD payouts. Loop allows these businesses to easily create foreign currency accounts and accept payment in CDN, USD, GBP and EUR without conversion costs.

These businesses can then spend those funds in foreign currencies or convert them to CDN at much lower rates than the banks offer.

Business with Expenses in Foreign Currencies

Businesses that have suppliers around the world can take advantage of efficient money transfers.

Loop allows you to wire money for free. Combined with market leading FX rates, Loop offers one of the most affordable ways to pay suppliers abroad.

How to Register for Loop Financial

Here is a short video tutorial showing a real-time registration for Loop Financial.

  1. Click here to start and then click "Open Account"
  2. Create an account
  3. Choose your account type
  4. Add information about your business
  5. Add information about business owners
  6. Provide verification documents (identification and proof of address)

That's it!  It took about 15 minutes to go through the registration process in real time.  Then another day or so for the verification documents to be processed.

Loop Financial FAQ

What is Loop Financial?

Loop Financial is a Toronto-based fintech company offering innovative financial solutions for small and medium-sized businesses. They provide multi-currency business credit cards, a cross-border business banking platform, foreign currency accounts, and tailored financing solutions.

What information do I need to Apply for Loop Financial?

To apply for Loop Financial, you’ll need some information about your business, including: 

  • Information about your business including where you transact with customers, what platform your online site is hosted on (if applicable), information about your payment processor (if applicable), 
  • Registered business name
  • Business address
  • Ownership details
  • The nature of the business
  • Details of linked accounts
  • The personal information of business owners including names, dates of birth and contact details
  • Identify verification documents (eg. Drivers License, Passport, Birth Certificate, etc)
  • Address verification documents (eg. Bank statements, Insurance documents, Utility bill, etc.)

How does Loop Card work?

Loop Card is a multi-currency corporate Mastercard allowing businesses to seamlessly switch spending between currencies like USD, CAD, GBP, and EUR. It helps eliminate foreign transaction fees and is designed for global transactions.

Does Loop Mastercard have a credit limit?

Yes, Loop Mastercard comes with credit limits that are based on the business's performance and revenue, offering up to CAD $1,000,000 in credit.

Is Loop Financial legit?

Yes, Loop Financial is a legitimate fintech company, originally known as Lending Loop, and has evolved to provide a range of financial services tailored to small and medium-sized businesses.

Does Loop integrate with accounting software?

Yes, Loop integrates with popular accounting software, including Xero and QuickBooks Online (QBO), for seamless accounting and financial management.

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Article by
Paul Sharpe, CPA, CA
.
Originally published
November 24, 2023
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