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<\/a><\/p>\nMeanwhile, Ritesh Gupta, formerly the company’s chief customer operations officer, has been promoted to chief operating officer.<\/p>\n
The leadership shake-up stems from problems that emerged after the company expanded its product offerings several years ago, according to a source familiar with the matter.<\/p>\n
CAN Capital, which was founded in 1998, made its name as a provider of merchant cash advances. Small businesses that use merchant cash advances make daily payments to the company based on a percentage of their daily revenue. But if a small business does not make any sales on a particular day, it is not required to make a payment to CAN Capital on that day.<\/p>\n
The company started offering term loans in 2010, and sought to ramp up the new product’s growth in 2012, according to the source. The term loans require daily payments by the borrower, regardless of whether it made any sales on any particular day.<\/p>\n
Problems arose when CAN Capital used old systems, which were not designed to require daily repayments, to collect money owed by term loan borrowers, the source said. As a result, the lender was not collecting all of the money that it was owed by term loan borrowers, according to the source.<\/p>\n
CAN Capital alluded to the problems in an emailed statement late Tuesday.<\/p>\n