Montreal’s favorite point of sale startup turned scaleup turned public company is now offering loans to certain customers it pre-qualifies. Lightspeed (LSPD.TO) stock is mixed in early trading this morning after reporting a $20M loss for the first quarter and releasing the news that it is now in the money lending business, along with its partner, Stripe.

“Lightspeed retailers have always outperformed the broader industry and this has been more apparent than ever during COVID-19 as these innovative merchants have leveraged omnichannel solutions to meet customer demand,” said Dax Dasilva, CEO of Lightspeed. “The introduction of Lightspeed Capital is one more tool to help them digitally transform their business and continue to outpace the industry.”

In a written statement, the company explains that it’s hoping to help retailers struggling amidst the Covid-19 pandemic, which is the company’s core customer base. The new Lightspeed Capital product is designed to help merchants in the U.S. only to buy inventory, invest in marketing, or manage cash flows. It is available for retailers using Lightspeed Payments in the U.S. and provides financing of up to $50,000 USD per retail location.

No information was available regarding interest rates, or which lenders the program may be working with. Stripe will be facilitating the actual payments for the loans. A company spokesperson told MTLinTechnology that the loans will have a fee which will be based on 10% of the loan amount, with a percentage of merchants’ daily sales repaid automatically. No further detail was made available on the exact cost of these loans.

The Lightspeed Capital initiative came about because the company has been a longtime partner of Stripe’s, and together they decided to launch this new program to support SMBs with financing and help them scale-up their businesses. Leadership at Lightspeed is open to potentially expanding the program to other, non-US markets down the road, but is not ready to do so at this time.

It remains unclear when the first loans will be made available or when loan applications will start to be accepted. The Montreal headquartered company is however staying true to its fintech roots, and plans to offer a digitized approval process when that day does finally come. Retailers seeking these loans will enjoy:

• A fast and efficient approval process with approved funds typically deposited the next day
• Automated and flexible repayments, with a percentage of daily sales will automatically repaid
• Accessible reporting lets retailers review how much has been repaid in real time, providing a single platform to manage it all
• Data-driven eligibility, with approval based on a retailer’s history with Lightspeed Payments. (Questions regarding how long a retailer must be a Lightspeed customer before enough data can be collected for them to qualify were not answered.)

Losses Doubled on Quarterly Earnings

Following last night’s announcement, the company released its quarterly earnings report this morning. Results for Q1 (ended June 30) showed a loss of 20.1 million or 22 cents per share, versus a loss of $9.1 million or 11 cents per share for the same period a year ago. Meanwhile revenue was up more than 50% to just over $36 million. The street had expected Lightspeed to come in with about $31 million in revenue and a loss of 14 cents per share.

The company said in a separate statement that it had experienced setbacks initially due to Covid-19, but that after a time more and more merchants began adopting their contactless, online payment solutions. This in turn led Lightspeed to the best quarter in its history by transaction volumes processed.

Lightspeed also provided an outlook for the second quarter ending September 30th, anticipating revenue of $38 - $40 million and adjusted EBITDA of approximately $7 to $8 million.

“The small- and medium-sized businesses we built Lightspeed to serve have risen to overcome historic challenges prompted by the global pandemic. Their resourcefulness and willingness to innovate has spurred an unprecedented digital transformation, proving why this nimble segment is the backbone of thriving economies all over the world,” said Dasilva. “As they streamline their operations and reinvent the commerce experience, Lightspeed is their technology partner of choice. We remain committed to providing them the tools and tactics they need to remain leaders in their industries.”