Earlypay Secures A$18mn For Trade Finance Expansion

According to the latest reports on June 29th, 2021, Australian invoice & equipment financing services Earlypay has successfully raised a capital fund of A$18.8mn with an agenda to support the development of its new trade finance products following a constructive trial.

The Sydney-listed company stated in a stock exchange filing that over the last year, it has tested its lending product to boost small & medium-sized enterprises (SMEs) in the course of purchasing stock. At the point when the stock is sold, the debt converts to an invoice financing product.

As per chief executive Daniel Riley, “Without considering dynamic marketing, Earlypay has successfully established a A$10mn loan book over this period, with 15 to 20 active customers.” He further added, “On evaluating its current 450 invoice finance customers, Earlypay has figured out an extended opportunity to facilitate trade finance to this group. ”

According to chief executive Daniel Riley, “This augmentation of Earlypay’s product will deliver a full supply chain funding aid to current customers and Earlypay estimates solid take up, developed customer satisfaction and an increment in pay generation from the current client structure.”

While the preliminary product was supported from Earlypay's balance sheet, "the solid interest for the product has now depleted Earlypay's balance sheet limit" and the recently raised funding will go toward developing that piece of the business, the filing says.

The capital raising involves the issuing of approximately 45 million shares at A$0.42, demonstrating a 12.5% discount on the June 21 closing price.

According to the company, it will start progressing trade and invoice finance customers to a new A$50mn warehouse lending facility in 90 days, which will permit it to altogether grow its trade finance book.

Established in 2001 as CML Group, Earlypay last year rebranded under its existing name after obtaining non-bank lender Classic Finance Group in 2019 and invoice finance fintech Skippr in 2020.

The company’s filing explains that the transition to warehouse financing will free up cash that will be utilized to repay bonds and conceivable further acquisitions.

Riley explains that the company’s customers work in areas, for example, “air-conditioning import and installation, engine components, manufacturing, food production and more” and the company is not presently peering toward global development.