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SME finance fintech Butn saw originations hit a new record in July, after $31.7 million of loans were lodged – up 59 per cent year-on-year.
Cash flow financier Butn has released a trading update, revealing that its 2023 financial year commenced with a new record in originations.
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Following consecutive record origination months in April, May and June 2022, the fintech lender achieved record monthly originations again in July, totalling $31.7 million. This represents an increase of 59 per cent on the previous corresponding period (pcp).
The funder’s July 2022 platform originations accounted for almost 20 per cent of the total monthly originations, at around $6 million for the month.
Butn’s co-founder and co-chief executive, Rael Ross, claimed that the strong start to FY23 “shows SMES have a real need for Butn’s affordable and accessible finance solution”.
“The current macro environment presents challenges for SMEs who are increasingly looking for more flexible ways to manage their cash flow and growth,” Mr Ross said.
“We expect the need and attractiveness of our integrated, platform driven on-boarding, credit and risk assessment, funding and collections to continue to increase and be more relevant to our partners and their business customers.”
The lender’s receivables book exceeded $60 million, up 80 per cent on the pcp.
Butn’s revenue totalled $0.7 million in July, up 79 per cent on the pcp, with revenue margin rising 0.3 percentage points to 2.3 per cent in FY2022.
According to Butn, this reflected an improvement in industry mix to higher margin segments and increased contribution of higher margin platform originations.
Additionally, the non-bank lender revealed that it had secured a further $5 million of debt funding (class A notes) from noteholders under the 2019-1 bond. According to the funder, these funds will be used to purchase eligible receivables, which will position Butn for further origination growth.
This funding provides for approximately $30 million of additional annual origination capacity, based on the funder’s “fast turning receivables book".
The business-to-business funder counts MYOB as a substantial shareholder, as it owns 19.9 per cent of the business. In addition, MYOB and Butn have a long-term strategic partnership agreement, offering an in-software, invoice finance solution to MYOB business users integrated into businesses’ workflows.
It has noted that ANZ recently announced it was in acquisition talks with MYOB, but stated that “the parties are yet to reach agreement on the acquisition and there is no certainty it will proceed”.
“Butn will continue to monitor the situation, and update the market as required,” it said.
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