The Business Leadership Podcast

You are listening to the Business
Leadership Podcast with Edwin.

Paul: Today's guest is Rethinking
Small Business Lending by rewiring

the lending process for the AI era.

Fred's Den is co-founder of Ruby Loans,
uh, platform designed to streamline and

modernize the small business loan process
through AI powered borrower interviews

and real-time credit risk assessment.

With over 30 years of experience in
financial services, Fred brings deep

industry insight to the challenge
of transforming a paper heavy.

Labor intensive system into a seamless,
borrower driven digital experience at

a time when SME lending remains one of
the most underserved and inefficient

segments in the financial services.

Fred and his team are building the tools
lenders need to scale while empowering

borrowers to take control of the process.

Welcome to the show, Fred Zan.

Here you go, Edmond.

Edwin: Thanks a lot, Paul.

Fred, first off, welcome to the
Business Leadership Podcast.

Welcome to Web Summit Vancouver.

Super excited to have you.

I just start off, how,
how are you doing today?

Fred: I'm doing great today.

Thank you very much.

How are you enjoying the show?

It's been, uh, thus far.

I've been terrific.

Edwin: Oh, amazing.

Amazing.

I guess let's just jump right in.

Sure.

Fred, if you could tell us and share
with us more about what Ruby Loans is in.

Specifically, what are the problem you're,
you're looking to solve within the small

business lending and financial services?

Fred: Okay.

I think I'd rather start
with the problems first.

Yeah.

Set the stage.

Yeah.

No, I love that.

So the industry that, you know, supports
small business lending, uh, has been

through tremendous change over the years
and small business lending or credit

granting for small business is one of
those areas that hasn't really evolved.

And the process that.

Most traditional lenders are
engaged in is very labor intensive.

It's very documentation heavy, it's very
time consuming, very inefficient and is

not a a customer friendly experience.

So it

Edwin: sounds like old school still.

Fred: It is,

Edwin: yeah.

Fred: Without trying to offend anyone.

It is very

Edwin: much old

Fred: school.

Yeah.

And a lot of that is also because many,
the individuals involved in that process.

Are also aging out.

Right.

And there hasn't been a, a really
strong emphasis on success succession

planning or changing the way they do
business to meet the changing market.

Edwin: Mm.

Got get, 'cause the market

Fred: is also changing.

Mm-hmm.

You know, 90% of business
in Canada are, are.

Uh, small business, right?

And that industry is growing very quickly
and it's a challenge for those business

owners or credit seekers to even access

Edwin: right,

Fred: small, uh, small business credit.

'cause they may not have a relationship
in place with, uh, a traditional lender.

So that's kind of sets the stage
for why the timing is right, we

think for Ruby loans to, uh, to
change or disrupt the market.

Edwin: Oh, that's amazing.

Um.

I guess when it comes to what we are
curious and what we're passionate about,

Fred, I'd love it if you could just
share what your unique point of view

is and what do you, you and the team
bring, and specifically you as the bi,

as the leader, you know, to this problem.

Fred: Okay.

I've been, I've spent about 30, 30
plus years in, uh, this industry.

Yeah.

In various capacities.

I've been in, uh, you
know, in credit granting.

I've been, uh, executive
responsible for credit granting.

I've also spent the last part
of my career in, in consulting

services to financial services.

And I, I spent a lot of time.

In, uh, operational
effectiveness and efficiency.

Mm-hmm.

And in fact, the genesis for Ruby,
Ruby Loans actually came from a

client discussion about five years
ago saying, wow, there has to be

a better way for us to do this.

So my point of view is that

we have to find a better way for the
industry to a gather, uh, new leads

and new opportunities in this segment.

But change the way internally that we,
uh, operate this segment so that we can

be, you know, more efficient, uh, more
effective, be more customer focused.

Mm-hmm.

Um, and, uh, uh, prepare us for,
or prepare the industry for.

What's coming next,
including open banking.

'cause that's also a very big piece
of what is coming down the pipe.

Edwin: Yeah.

To actually, I mean just, just for
the benefit for our audience and even

myself and Paul, like when you talk
about open banking, like what does

that mean to let, let's not just say
that the industry, but what does it

also mean to the small business owners
and, and, and how will that benefit?

And, and I'm really like, how
different will that create?

This experience for us as a us me, I'm a
small business owner, you know us as well.

Okay.

Fred: So that's a great question.

Yeah.

And I think that's really where,
you know, uh, where, where

all of us need to be thinking.

But um, right now in the traditional
space, you have a relationship

potentially with a lender or a bank
or a credit union or a trust company

that you would go to to seek, uh.

Credit or, or your, your business needs.

Mm-hmm.

Financial needs in, in the
open environment, open banking

environment, that relationship
doesn't necessarily exist.

Mm.

Because you then have the
opportunity to access.

Uh, on a much broader base mm-hmm.

The services that you need.

And so that relationship with
your lender or with your bank

suddenly starts to diminish

Edwin: mm-hmm.

Fred: Yeah.

And becomes much more competitive
for the landscape, for the business,

for the lenders themselves.

Edwin: Oh, wow.

So tell me, and then I'll,
I'll, I'll let Paul jump in.

Um, so when it comes to Ruby Loans
and the solution that you're not

only developing but bringing to
market, how does that really reflect?

Back to your point of view, your POV,
the way you look at the industry.

Fred: Okay?

So what I didn't talk about was
what is review reviews, right?

And I really should do that.

Mm-hmm.

So what we've done is, is
we've changed the dynamic from

being a lender driven process.

Mm-hmm.

Whereby if you apply for a loan as
a small business owner, I mean, not

that different from a, from a personal
situation, the lender is driving

the process with you to provide them
with the information that they need.

Mm-hmm.

To do that assessment of your credit risk.

Mm-hmm.

Or your, your, your, the
strength of your borrow position.

Yeah.

So what we're, what we've designed.

Is rather than me waiting for a lender
to drive the process myself, as a

small business owner who's looking to
seek credit, I initiate the process.

Mm.

So I go to, uh, the Ruby Loans web link,
and I start, initiate an inquiry process.

Mm-hmm.

That generates with the assistance of
ai, a validated, uh, uh, uh, verified.

Inquiry for the lender.

Mm-hmm.

The lender receives that and they
know that it's come through this

process that has verified it for them.

20 minutes, 20 questions is what
is what we're talking about.

Nice.

Yeah.

That's our, that's our tag.

I like

Edwin: that tag.

Fred: And, uh, the lender then knows
that whether know immediately if

there's enough to go to an application.

'cause the application is
the meat of this process.

Mm.

It's, it's where all the information
is gathered and evaluated,

assessed, uh, put into some.

A format that the lender then
uses for a credit approval.

So if I generate the inquiry as a
borrower, then I go back in, uh, with

the authorization from the lender
to say, Edwin, we know would like

you to provide us with all of this
information that we need, uh, to, so

that we can prepare the application.

Edwin: Right.

Yeah.

So again, it's

Fred: back on you as the borrow.

Edwin: Mm-hmm.

Mm-hmm.

Which

Fred: again, frees up time
and effort of the lender.

It engages the borrower in the process
and it, um, you know, uh, eliminates

much of the time and effort that
the lender is spending because if

they have more than one of these
going on at once, which they would,

Edwin: yeah.

Fred: You can appreciate that.

It's a very, uh, circus-like
environmental times.

Edwin: I can't even

Paul: imagine.

I can't even imagine.

So, so Fred, like, why do you,
why do you care about this?

What, what really drove
you to change this process?

I.

Fred: You know, I've seen, I, I've seen
and felt the pain, and I know from talking

to clients even now and potential clients,

they get it.

They know they need a solution
to change the way they operate.

Mm-hmm.

They know that they're
facing increased competition.

They're struggling to reach the
market that is growing because if,

if they're people younger than me who
are looking for credit and running a

small business, I don't have the time.

I think to go in and spend my
time, multiple appointments,

phone calls, et cetera, et cetera.

So there's a, an appreciation I
think that, that we need to change.

Mm-hmm.

And, um.

I, I just find that really invigorating
that we could be part of that solution.

Paul: And, and so you've seen it on,
on both sides, like as, as in seeking

the credit or just providing, or,

Fred: it's funny you say that.

'cause I have, uh, when I ran
my consulting practice, and I

won't say who I was dealing with.

Yeah.

But we did have to go for, you
know, for an operating loan and, uh.

It was a, it was a very challenging
process to get, get through, and

it was not like we were looking
for an exceptional amount of money.

Mm-hmm.

But, um, and if you, you know, it's funny,
I met somebody this morning on the way

in and they asked what I was doing and,
and what we do and he said, you know, I'm

a small business owner and I just went
through a whole, very rigorous process

for a very simple operating, uh, facility.

And I don't understand why,
why it has to be that way.

So.

I think there's a lot of
validation in the market.

Paul: Yeah.

And I guess all the, all the time
you spent in, in the industry

and seeing it from all angles.

Um, you know, so what, um, I mean,
you said you, you're taking a paper

heavy and like cumbersome process.

Mm-hmm.

And now, now that it's super
straightforward, easy 20 minutes, like

what does that look like for, for SMEs?

Uh, like what, what do you think
is gonna change 'cause of that?

Fred: I think a, having the access.

To a process that won't be reliant on me.

Having a relationship with an
individual or, or a, or a perspective

or a particular lending institution
is a big thing because if I'm a small

business owner, uh, and I've got a
million things on my plate, I may not

get to this till 10 o'clock at night.

As an example, I know that I could, with
Ruby Loans, I know that I could go in,

start my process, however it suits me.

And I think having that access
is, is really a game changer.

Paul: Well it is really offering this
potential of growth and, and, and

just, you know, ability to, to take on
challenges to these, these businesses.

Fred: Right.

And for the lenders as well, because
it gives them a new opportunity

or, or a, a different opportunity
to gather new business leads.

Paul: And then the whole
relationship really changes.

'cause that that dynamic of the, you
know, of the power really, uh, is

Fred: the power shift or is it that
I'm now engaged in my own process?

Because in the, in the
traditional approach, the

lender is driving the process.

I'm waiting for the lender to get to me,
to ask me for the plethora of information

that they're gonna need from me.

And then they say, oh, and
by the way, we need it.

By now.

Yeah.

Yeah.

Versus if I'm driving the process, I
can say, okay, I will get that to you.

Or I can have my, my, my business
resource get that to you.

And we've designed this so that
it's any format, any, uh, you know,

just get it to us electronically
whenever format it's in, because our

engine can read anything at this.

Edwin: Yeah.

That, that's amazing.

Thank, thanks for sharing all that, Fred.

And when, what we're looking for and
the, the missions and the visions

and the stories and specifically
the future of, of the founders.

When we talk about future narrative,
I'm really curious as what do you see,

um, what, what does the future look
like when Ruby Loans is there providing.

The small business owners a
very quick loan operating loan.

Like, like how does, what's
the impact that it creates?

Let's

Fred: not say it's a quick loan.

Okay.

It's not quick loans.

There's still a very
thorough process Okay.

That the lender is, has to go through.

Sure.

But what the difference is,
is that customer experience I.

Really increases.

Mm-hmm.

I mean the, or the, the,
the, uh, the customer, uh,

friendliness of that experience.

Okay.

Definitely increases.

I mean, I think the opportunity
for a lender to create a new

relationship with the small business
because of the pleasantry of that

experience is a real positive.

But I think as well, just the
support of a small business for

a small business, knowing that.

I have the access mm-hmm.

To at least start this process.

Mm-hmm.

Um, without the going
through the traditional

method.

Edwin: The method is Yeah.

I

Fred: think the key.

Edwin: Yeah.

And what, what does that mean
to, to those entrepreneurs?

Like what does their world look like?

Is it because, and I'm just talking
from my own experience and maybe all

of our experiences being consultants,
small business owners in the past, um.

Does it allow, and I don't wanna, I don't
wanna put, you know, the words in your

mouth, but does it allow when in the
future, I know as an owner I'm like, oh,

you know what, that's, that check mark is
actually easier to do now versus like an

overwhelming like mountain to even start.

Fred: Well that's a, that's
a really great point.

And you know, this isn't changing
the world of credit risk assessment.

Mm-hmm.

This is not changing the way that
lenders need to evaluate credit risk,

Edwin: because that can't change.

That doesn't, well,

Fred: that, that's really
dependent on a lot of variables.

Right.

Who, who the lender is, what their
requirements are, what their policies

are, what, how they're regulated.

I mean, there's a whole underpinning
of policy and compliance

that they need to maintain.

Right?

Right.

But what it does provide,
I think, or we think is.

The access mm-hmm.

And the ability for the small business
lender to seek it much easier.

Paul: So, so you're, um, you're
providing a solution to lenders Yes.

All over to, um, to do this.

So you, I mean, you, you're changing,
you're changing things on, on both sides.

Right.

Then

Fred: we are B2B, we are
intending to be B2B at this point.

So our client at this point is a lender.

We don't see providing this necessarily
at this point to the open market

where B2C, where we could then.

Feed opportunities to a lender.

That's, that's not on
our radar at this point.

We're B2B,

Edwin: it's not like a B
two, B2C type of operation.

Correct.

Right.

That's correct.

Paul: And, and then earlier you
were just telling me like, you, you

guys are really well connected and
you're just waiting to, uh, to get

things to, to get things out there.

And, um, so, and I mean, I'm just thinking
like, so you, you know, that there's

something really new you're bringing
to the table or, and you just wanna.

Yes.

See it, um, starting to take hold.

Yeah.

Fred: Hope Business partner,
uh, his name is George Hink.

He and I both have fairly extensive,
uh, contacts and, and, uh, connections

in the financial service industry in
North America, and we've spent a lot of

time talking this up, uh, and canvassing
our connections and potential clients.

Mm-hmm.

To say what if.

And we did an exercise last fall, uh, at a
conference that, that we were both at and

took the time to invite selected contacts
of ours who were going to be there to

say, can we have tenancy of retirement?

Just talk about what we're thinking.

Mm-hmm.

And the feedback was tremendous.

It was, you know, a number of
'em said, when can we have this?

So, and some nuances on that
too, because working within, um.

And because of the technology platform,
using it internally as a, as a process

versus not just being external helps
organizations be more efficient,

helps 'em with their training and
succession and all that good stuff.

But even working in, in multi
uh, multi uh, um, language.

I can't think of the the word, but you
know, if I'm working in a, in a segment

of the market where I'm not speaking
English, that's my first language.

We, we could translate that, you know,
and have it much more accessible or

readily available to that, um, unique
market and break down some barriers.

So that was a, a really neat,
uh, uh, outcome of that session.

Well,

Paul: you really, you really are
providing a lot more access to mm-hmm.

To something that was cumbersome and,
and it's just, with ai it's, it's

offering, uh, so many different ways
to improve that customer experience.

So, um, it's, it's great to see how,
uh, just all the industry experience

that, that you bring, um, at this point
in time can really reshape how, how

loans are, are being applied for and
making that experience customer centric.

Edwin: Um, Fred, just before
we wrap up, I'd love it.

Um, it might be a, a two-prong
approach, but I'd love it if you could

first off, share any advice or final
thoughts for those who are listening.

And the, the context I kind of want to
put it is not only as a startup, um.

You know, the importance of you
to tell your story at events

like Web Summit and, and why you
felt like coming here was really

important for you and your platform.

Fred: I think one of the things I've
been really focused on is making

sure I knew what I was talking about.

Mm-hmm.

And I've done a, George and I have
done a lot of research and a lot

of DI engaged, lot of dialogue.

To make sure that we were bringing
something forward that not only

had value but meant something
to the potential customer.

And I've, I've really tried to
focus on that and, you know, it's

really easy to get carried away
with the technology and how mm-hmm.

Finding exciting and innovative this can
be, but if it didn't solve that problem.

I, I think that's, that's been
key for me all the way through.

Stay focused on the problem.

Edwin: I, I love that.

And, and the one thing, but before we
let you go, Fred, and I just wanted to

really, really ask you, you talked about
this conversation to get the language

correct, so you're telling the story.

Um, how was that important?

How did you and George do this?

Was these internal conversations,
was it also being within conversation

with clients and community?

Fred: Personal.

Yes.

To all the above.

Yeah.

One, um, we, we spent a lot of
time together, uh, again, 'cause

we've got a really, uh, diverse
but yet intersected backgrounds.

Mm-hmm.

Um, but largely was with,
uh, trusted connections.

Okay.

Uh, who, who, who will become clients.

I'm pretty convinced of that.

Great.

Because relying on them to tell us that.

We were valid in what?

In what we were saying or thinking

Edwin: was

Fred: key.

Edwin: For Airbnb.

That's awesome.

Well, Fred, this is amazing.

I hope you the best of
luck on uh, Ruby Loans.

We're excited to see you know, this, just
as business owners streamline help us

as well as the B two, B2C type of view.

But, uh, thank you for joining us
on the Business Leadership Podcast.

Fred: My pleasure.

It was great.

Thanks guys.

You are listening to the Business
Leadership Podcast with Edwin.