CAN Capital, a struggling New York firm that offers high-cost credit to U.S. small businesses, is initiating a new round of layoffs.
The privately held lender recently disclosed to state officials in Georgia that it will lay off an estimated 55 employees in Kennesaw, Ga. The staff cuts come on the heels of additional layoffs and a shake-up of the firm’s executive team late last year.
CAN Capital has attributed its recent woes to certain loans performing worse than had been expected.
In a statement Tuesday to American Banker, CAN Capital said that the company has taken action to improve and streamline its processes, resources and staffing. “Our goal is to continue serving our small business customers for many years to come,” the firm stated.
CAN Capital, which was founded in 1998, is a provider of merchant cash advances, an expensive form of small-business financing that some critics liken to payday lending. Companies that use the product get an upfront sum of cash and then make daily payments based on a percentage of their daily revenue.
CAN Capital has defended its business model by noting that it offers an option for businesses that might be unable to qualify for mainstream credit.
Back in December, CAN Capital disclosed plans for some 136 layoffs in Georgia. At the time, a source familiar with the situation told American Banker that the firm laid off around 250 employees at multiple locations, which accounted for at least half of its total workforce.
Those layoffs came on the heels of the news in late November that CAN Capital CEO Daniel DeMeo had been placed on a leave of absence, along with two other top executives. Parris Sanz, previously the firm’s chief legal officer, took over as acting CEO.
Also late last year, the company said that it was suspending its efforts to sign up new customers.