Why alt lending is no longer the last resort for brokers
“It’s as simple as that. And if you’re not thinking about it that way, you’re losing opportunity for yourself.”
A borrower profile that no longer fits a single box
The shift is structural, not cyclical. As qualification criteria at Canada’s major chartered banks have narrowed under regulatory pressure, a growing range of creditworthy clients — self-employed borrowers, entrepreneurs, holders of multiple investment properties, and those navigating divorce or Canada Revenue Agency obligations — have landed in the alternative channel not because of damaged credit, but because of how banks define qualifying income.
Grant Armstrong, chief growth officer at WealthONE Bank of Canada, offered a data point that reframes the conversation: the average FICO score among his institution’s alternative borrowers sits at 763. That’s a number that, he noted, outperforms some Big Six portfolios in certain segments.
“Banks have very, very specific ways of looking at income,” Armstrong said.
“That’s where the alternative lenders can come in and have a different risk appetite — to be able to say, we want to look at that cash flow of the business. Some of our clients have multiple properties — bank statement approach, investment properties, holdcos — stuff that’s just a little bit outside of what the traditional bank is.”
