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The financial services company has purchased the majority of the debtor finance clients of the Thorn Group.
Australian financial services company OptiPay has announced it has grown its invoice financing books by $10 million after acquiring the debtor finance clients of diversified financial services company Thorn Group Limited (Thorn) subsidiary Thornmoney.
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Thorn revealed that it expected to receive approximately $3.8 million from the sale.
The sale of Thorn’s debtor finance clients followed the sale earlier this year of the majority of its asset finance portfolio to non-bank lender Resimac Group Limited for approximately $15 million.
In the release yesterday (23 October), OptiPay’s chief executive Angus Sedgwick said the purchase was part of the organisation’s growth plan.
Mr Sedgwick stated: “We’re continuing to drive the growth of OptiPay to position ourselves as the leader in the invoice financing industry in Australia.
“Our new clients span across a range of industries including transport and logistics, manufacturing and labour hire and we’re looking forward to helping them manage their cash flow better.”
OptiPay revealed that its portfolio had grown at an average of 50 per cent year on year over the past four years and stated that “invoice financing [is] still an untapped resource for many Australians SMEs”.
Speaking to The Adviser, Mr Sedgwick said with the difficult economic conditions hampering businesses OptiPay has seen a “40–50 per cent increase in inquiry level on this time last year”.
He added that small businesses would likely have to endure another eight to 12 months of pain before a fiscal easing is seen at the beginning of the 2025 financial year.
Educating brokers about invoice financing
As OptiPay looked to grow its invoice financing books through the acquisition of clients from Thornmoney, Mr Sedgwick said the organisation was still focused on brokers and described them as “a key channel”.
However, he added that education for both brokers and their clients about invoice financing was key.
Mr Sedgwick commented: “It’s quite a nuanced solution, invoice finance because it does involve onboarding the client’s debtors and sending them letters and changing bank accounts for where the debtors pay their invoices, doing things like that.
“So we do find its quite nuanced in that a lot of brokers just don’t want to know about it or when they do they say it’s a bit too difficult.
“So part of our job as an invoice finance industry is to educate the market.”
He stated that while there is only a segment of the market that is eligible for invoice finance, those that have business-to-business creditors, he stated its benefit, enabling a business to bring forward its own cash secured by an unpaid invoice.
“We need to educate both the broker channel and the business community, the SME market generally, to understand how invoice finance works and the value of it,” Mr Sedgwick added.
As part of OptiPay’s effort to educate brokers on invoice financing and how it could work and be a part of their “armoury of solutions”, Mr Sedgwick said he would look to conduct broker education presentations through video calls to help brokers identify opportunities.
He added: “Invoice finance has huge potential among Australian B2B businesses looking to improve their cash flow.
“Invoice financing is commonplace overseas but here in Australia it’s less well known.”
[Related: Resimac moves to buy Thorn’s asset finance portfolio]
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