Deal worth $15.6 million
UPDATED:
SME non-bank lender Prospa Group Limited has acquired the Zip Business loan portfolio from Zip Business for approximately $15.6 million.
The deal, announced on the ASX website, will be funded using Prospa’s existing warehouse funding arrangements with settlement due to be complete this week.
The acquisition comprises all of Zip’s remaining performing Australian business loans, equivalent to approximately $18.4 million of commercial loans to approximately 370 small businesses.
Deal involves 370 small businesses
Prospa Chief Executive Officer Greg Moshal (pictured above) said in a statement on the AXS website that his team was pleased to acquire the high-performing Zip Business loan portfolio, ensuring that the 370 small businesses would continue to get the financial support they needed on the Prospa platform.
“The acquisition reflects our continued commitment to supporting Australian small businesses with tailored finance for their needs,” Moshal said.
The acquisition comes at a time when small regional businesses are doing it tough with a third rating their overall business health as poor, according to research commissioned by Prospa, an excellence awardee in the Australian Mortgage Awards 2023 PropTrack Fintech Lender of the Year category.
Prospa co-founder and chief revenue officer Beau Bertoli (pictured above right) said Zip’s loan customers would continue to be debited in accordance with their current repayment schedule.
“Zip has reached out directly to customers about this and once the transition period ends, Prospa will reach out to welcome customers and share more information,” Bertoli said. “This is an exciting moment for us as a business and signifies our intention to continue to build scale across our portfolio.”
“We’re pleased to acquire this high-performing loan book and for the opportunity to build relationships with these customers and meet their future cash flow needs.”
Bertoli said Prospa was able to service any brokers who used to refer customers to Zip and advised brokers to reach out to their local Prospa BDM if they had any enquiries about business lending for their customers.
Tough times for SMEs
In December, Prospa revealed findings from the latest SME Sentiment Report, conducted by YouGov, that surveyed about 500 small business owners across Australia.
The report revealed rowing concerns from the small business community around their business viability and the financial gap between metropolitan and regional businesses due to economic pressures.
Nearly nine in 10 (86%) Australian small businesses were experiencing mounting worries with the top three concerns being the rising cost of goods or services (58%), rising cost of utilities (48%) and lower than expected consumer spending (36%).
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