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Invoice finance and cash flow funding companies are providing accelerated funding for broker SME clients who have been impacted by Apricity’s administration.
Earlier this month, invoice financing group Apricity Finance Group Pty Ltd was placed into voluntary administration, with an Australian Securities and Investments Commission (ASIC) notice from 3 April showing Darren Vardy of Insolvency Options had been appointed as administrator.
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The invoice finance company, headed up by directors Andrew Meakin and Linden Toll (former chief executive), was originally founded in 2013 to offer debtor finance to small- and medium-sized businesses.
It provided SMEs that held outstanding invoices with up to 95 per cent of the invoice value, with Apricity’s credit assessment concentrated on the debtor rather than the supplier.
While details of why the administrators were called in have not yet been released, it is believed that the company had a large exposure to companies in the construction and building industry (which has been suffering from a series of collapses and wind-ups in the past year) and may have some shortfall in funds.
The move to place Apricity Finance Group Pty Ltd into administration came a week after funding specialist GCI Funds (FCI) appointed Alan Hayes and Wayne Marshall of Hayes Advisory as joint receivers and managers to Apricity Transasia Pty Ltd – a separate entity under Apricity Finance Group Pty Ltd.
GCI funded a single, specific funding vehicle of Apricity Transasia Pty Ltd and was the secured lender over all the assets of that entity. It therefore called in receivers to enforce its security over the Apricity Transasia Pty Ltd assets.
However, the full group has now entered administration and ceased trading, with the Apricity website now offline.
While neither Apricity nor the administrators and receivers had issued on-record comments to The Adviser on the matter at the time of writing, The Adviser understands Apricity’s loan book had been suffering due to the construction sector’s recent issues. Approximately $10 million is thought to have been on the books at the time of administration, covering approximately 50 clients.
Speaking to The Adviser, finance broker and advocacy chair of the Commercial & Asset Finance Brokers Association (CAFBA), David Gandolfo, said brokers had been working hard to support impacted clients who may have had facilities with Apricity Finance.
“As the trusted SME adviser, brokers are always ready to help SME clients understand their options and finance position. When a funder fails, brokers are best placed to refinance or replace these facilities with a suitable alternative, and help transition the client as seamlessly as possible,” he said.
“CAFBA members have a code of conduct to always step up whenever a situation like this arises, and they will assist clients to another appropriate lender. The same as brokers do during natural disasters or emergency situations, brokers offer service to their clients as the needs arises, it’s part of their value proposition.”
Indeed, given the closure of the invoice financier, members of the debtor finance industry have been accelerating their turnarounds for impacted broker clients.
Donelle Brooks, national partnerships manager at Earlypay, commented: “The cash flow finance industry is working hard to help the good of the industry and brokers should know that we’re all aware that there are Apricity clients out there that are going to be hurting and that we make to move at a quicker-than-normal pace for debtor finance for these clients.
“We are working as a priority to help these broker clients (who are factorable for us) to get funding lines back in place really quickly.
“We want to give brokers confidence that the best thing they can do is be proactive and talk to us, or another debtor finance lender, to help their clients access the funding they need.”
Nova Finance is also believed to be actively supporting brokers who may have Apricity Finance clients.
[Related: Apricity appoints COO]
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