- EarlyPay has settled a new AU$30 million securitised facility to enable product expansion.
- Earlypay Trade Finance is the company’s third secured SME loan product.
- The new facility offers an additional source of revenue, which can attract bigger transactions.
- Trade Finance offers a return on the purchase as well as sale side of a client transaction.
ASX-listed secured financing provider EarlyPay Ltd (ASX:EPY) serves SME businesses across invoice, trade and equipment finance.
EarlyPay set off its journey as a small business dedicated to providing finance solutions for fellow small business owners. Over the years, the company has expanded to have approximately 100 business finance professionals across Australia, serving businesses across various industries.
EPY settles new securitised facility
Recently, EPY settled a new securitised facility, the EarlyPay Trade Receivables Trust (ETRT), which is a special purpose vehicle secured by Trade Receivables.
The AU$30 million facility will offer capital to facilitate the expansion of Trade Finance, which is the third secured SME loan product of EPY. Offered to qualifying invoice finance clients, Trade Finance helps SMEs in purchasing stock and inventory.
The new facility will release over AU$20 million in cash to the Company, which can be used to fund the existing Trade portfolio.
The new facility is expected to further aid EPY in tapping organic and non-organic growth opportunities. Moreover, this facility offers EPY an additional revenue source and empowers it to attract large transactions while maintaining historical margins.
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Integration and Synergies
Trade and Invoice finance, when provided in conjunction, work as a complementary and attractive full supply chain finance solution to SMEs. This has delivered strong demand for the product since its initial launch in Q1 FY21.
Trade Finance can seamlessly integrate with the core Invoice Financing product of EPY and offers EPY a return on purchase as well as sale side of a client transaction. The Invoice Finance facility helps in mitigating the risk of loan amount outstanding as it repays the Trade loan when the stock is sold.
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EarlyPay believes that this facility is a milestone for the Company and signifies the successful development of its third secured SME loan product.
Moreover, as Trade Finance is closely in line with EPY’s core Invoice Finance offering and the Equipment Finance product, the Company believes that this will power growth through improved demand with substantial operational synergies.
Moving forward, EPY expects to increase the size of the facility, in line with the growth in Trade Finance, subject to the performance of the receivables pool.
EPY delivers ~25.5% YTD growth
EPY has delivered approximately 25.5% return to its shareholders in 2022, as of 24 May. The shares were trading at AU$0.540 in the early hours of 25 May 2022. Notably, EPY is trading close to its 52-week high price of AU$0.57.
EPY also paid an interim dividend (fully franked) of AU$0.014 in April 2022. The Company has a market capitalisation of AU$153.40 million.