It was only a couple of months after Allegra Shaw and Shirin Soltan launched their sustainable clothing label, Uncle Studios, when they hit cash flow issues.
They had used their own funds to start their brand in late 2017, and much of that went to manufacturers. The duo had hoped a bank loan would cover marketing and other costs in order to scale, but lender after lender turned them down.
“When you’re an entrepreneur and you’re young, banks don’t trust you with loans,” said Shaw, who is based in Toronto. “We weren’t eligible to get enough money.”
Months later, Shaw and Soltan received an unusual offer: a financial services firm, Clearbanc, was willing to provide Uncle Studios money to spend on social media ads. The brand would pay back the funds, plus a 6 percent flat fee, via monthly payments taken out of its revenue.
Clearbanc, now called Clearco, has