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Steven Uster, the CEO and co-founder of FundThrough is photographed in his Toronto office on May 6, 2016.JENNIFER ROBERTS/The Globe and Mail

Small-business lender FundThrough is getting a $24.6-million financial boost from some big-name Canadian investors, including an early backer of Shopify whose connection to CEO Steven Uster dates back to a high school scholarship nearly 20 years ago.

Toronto-based FundThrough says the financing will help it serve more small businesses that rely on it to fund their own companies between invoice payments.

"We wanted to ensure that we brought on partners who had experience in taking businesses with great ideas and scaling them up," Mr. Uster says. "We also wanted to bring on partners who understand the needs of small businesses and the challenges they face."

FundThrough gives businesses a cash advance on a value of their invoices. Companies go to FundThrough when they can't wait the average 30-to-90 days it can take to get paid by their customers.

It's the second round of financing for FundThrough, which has lent more than $50-million to hundreds of businesses since it launched in 2014. Of the $24.6-million, FundThrough will receive $4.6-million of equity and access to an additional $20-million in loan capital.

The lead investor is Scale Up Ventures, a $75-million venture capital firm launched earlier this year, backed by private industry including three yet-to-be disclosed Canadian banks, and a $25-million commitment from the Ontario government.

Scale Up was created by former Rogers Communications CEO Nadir Mohamed and past Ryerson University president Sheldon Levy, with a mission to support high-growth technology startups.

FundThrough is Scale Up's fourth investment and the second one it has made public, says general partner Kent Thexton, who has built up the fund.

"We are always looking for there to be a big market opportunity," says Mr. Thexton, who is also the chairman of Sierra Wireless and Redknee Solutions and former managing director of OMERS Ventures.

Mr. Thexton says Scale Up was impressed by high level of customer satisfaction at FundThrough, including data showing 85 per cent are repeat users.

"FundThrough has quickly established itself as a trusted solution for small businesses that gives them easy access to the capital they need to grow," Mr. Thexton said, adding, "the opportunity for rapid expansion is clear."

The idea to invest in FundThrough was flagged by John Phillips, a director and early investor in Shopify, among other startups, through his company, Klister Credit Corp.

Klister, which is also a backer of Scale Up, is part of the FundThrough financing alongside other key investors such as Hedgewood and OnWave Ventures.

"I really like the purpose of FundThrough. It has a social benefit, which is assisting companies that get stuck trying to collect from bigger companies," says Mr. Phillips, who also characterizes the predicament as "screwing the little guy."

Mr. Phillips met Mr. Uster about six years ago, but his connection dates back to when the FundThrough co-founder was a Loran scholar in 1997. Mr. Phillips is a past Loran director and a long-time donor to the scholarship fund for high-achieving secondary school students. Another FundThrough co-founder, Deepak Ramachandran, was Mr. Uster's Loran mentor.

Mr. Phillips says it's the first time he's invested in FundThrough, and expects it will be the last, as the company continues to grow beyond his funding capacity.

"I expect their growth trajectory will take them into Series A, Series B funding, which is outside Klister's scope," Mr. Phillips says.

Mr. Uster, who remains involved in Loran and is on its board, says the new FundThrough financing not only represents a "who's who from the banking and telecom world," but also will give the company some more strong partners to help it grow.

He said the new funds will be used to help build out FundThrough's technology, including improving its credit automation tool and overall user experience, as well as to boost its partnerships with cloud-accounting companies and hire more staff.

FundThrough's first financing was $2.2-million raised in 2015 by a group of investors led by Real Ventures.

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