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The SME lender has entered into an agreement to acquire the loan portfolio of a shuttered SME lending business.
Prospa Group (Prospa) has announced that it has entered into an agreement to acquire the loan portfolio of Zip Business, which closed down operations last year.
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The acquisition – which is expected to settle this week – includes all of Zip’s remaining performing business loans – believed to be held by 370 small businesses and equivalent to approximately $18.4 million of commercial loans.
The acquisition was valued at approximately $15.6 million and is being funded using Prospa’s existing warehouse funding arrangements.
Speaking of the deal, Prospa chief executive Greg Moshal said: “We are pleased to acquire the high-performing Zip Business loan portfolio, ensuring that the 370 small businesses can continue to get the financial support they need on the Prospa platform.
“The acquisition reflects our continued commitment to support Australian small businessses with tailored finance for their needs.”
Beau Bertoli, co-founder and CRO of Prospa, told The Adviser that any brokers who have Zip Business loan clients would not need to take any immediate action at this stage.
“Zip has reached out directly to customers, and your clients will continue to be debited in accordance with their current repayment schedule.
“Prospa will also service any brokers who used to refer customers to Zip. Reach out to your local Prospa BDM if you have any enquiries about business lending for your customers,” he said.
Mr Bertoli added: “We’re excited to be able to help even more Australian small businesses to get the financial support they need… we remain committed to providing fast, tailored lending and cashflow solutions that allow customers to unleash their potential.”
Zip Business closed its SME lending operations in Australia last year as a result of “ongoing efforts to simplify [the] business” of its parent company, ASX-listed buy now, pay later (BNPL) company Zip Co Ltd.
While the lender first launched into market in 2020 following the acquisition of Spotcap Australia and New Zealand, it closed these two trade products a few years later, as the group moved to focus on profitability.
As such, only Zip Business Capital – its unsecured business loan product ranging from $10,000–$500,000 – had remained in market under the Zip Business brand until this was also mothballed last year.
The BNPL group has been pivoting its strategy from a focus on “global growth” to a focus on “sustainable growth” in its core markets (including the US and Australasia) and accelerating a path to profitability.
[Related: Zip Business to close]
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