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The debtor finance industry has a new look following the settlement of the acquisition by BA Venture of Scottish Pacific Business Finance from St George Bank and the merger of its operations with those of Scottish Pacific Benchmark Debtor Finance.
BA Venture is a joint venture between Balmain NB Corporation Limited and Allco Finance Group. BA Venture is also the majority shareholder in Scottish Pacific Benchmark Debtor Finance.
Scottish Pacific Benchmark and Scottish Pacific will continue to operate under their own brand names, with the combined operations gaining significant geographical spread and balance sheet strength.
CEO Peter Langham expects the merged operation to show significant growth in its market share. "Scottish Pacific and Scottish Pacific Benchmark are the two leading names in the provision of flexible debtor finance in the owner managed sector. This merger allows us to combine the strengths of both businesses, and their management skills, resulting in expanded products, new target markets and a greater capacity for effective marketing." said Mr Langham.
"It's an exciting time for us as a combined team, with the industry maintaining double-digit growth in turnover and client numbers," he said.
Latest figures from the Institute for Factors and Discounters showed the growth of debtor finance in Australia surged more than 21% in the June 2007 quarter compared with the same period last year.
The IFD's quarterly survey showed debtor finance providers handled more than $50.3-billion in turnover in the twelve months to June 2007. The number of Australian firms using debtor finance as an alternative to overdrafts and other instruments now exceeds 5,600 compared with 4,893 at the same time last year, an increase of more than 14%.
Mr Langham said the Australian market still showed room for further growth. He said the dominant growth was in invoice discounting, being the main product offered by the banks.
"The banks are very strong in the invoice discounting space, but we find we are able to dovetail nicely and assist where the banks can't."
"This is still a rapidly growing market in Australia," said Mr Langham.
"Debtor finance is one of the most flexible and cost-effective methods of solving the cash flow problems faced by many SMEs," he said, "With the current fall-out in the lo-doc residential mortgage market, which until recently had been a strong source of debt for many SMEs, we anticipate that the strong growth in demand for sensible receivables finance will continue."
The joining together of Scottish Pacific and Scottish Pacific Benchmark will create the largest non-bank debtor finance provider across Australia and provide the footing for further expansion.
CEO Peter Langham said the company's success in a competitive market was due to the commitment to customer service and being able to provide a flexible alternative to the banks.
The BA Venture partners
Allco
Allco is a fully integrated global financial services business listed on the Australian Stock Exchange which specialises in structured asset finance, funds management and debt funding. Allco's market capitalization is currently in excess of $4 billion.
Balmain
Balmain was established 25 years ago to provide borrowers with an alternative to bank finance for commercial lending. Balmain is now Australia's largest commercial debt originator with loan volumes exceeding $4bn per annum and a current loan portfolio exceeding $8bn.
In addition to its involvement with BA Venture Balmain has, in recent years, established proprietary lending products in the commercial mortgage sector (AllFinance, in partnership with Allco) and mortgage management businesses (Mirvac Aqua, in partnership with Mirvac).
Balmain currently operates in eight offices throughout Australia and New Zealand.
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