Earlypay acquires Melbourne fintech Timelio 

The lender revealed that the acquisition added a $40 million loan portfolio to its book predominantly made up of invoice (debtor) finance, with a small portion of trade finance, to Australian small and medium-sized businesses.

Earlypay stated that Timelio’s client base was across several industries, including labour hire and recruitment, transport and logistics, wholesalers and manufacturing. It confirmed that for Timelio’s invoice financing customers, the transition would be seamless as clients would maintain their existing Timelio relationship manager.

As part of the transition, the lender stated it was also acquiring Timelio’s Supplier Early Payment platform, which enables larger businesses to efficiently pay their supplier invoices early to help support the working capital needs of their suppliers and in turn benefit from a discount on the value of the invoices.

Earlypay’s chief executive, James Beeson, commented: “The acquisition of Timelio supports our aspiration to be Australia’s leading working capital financier. The additional scale in our core invoice financing product allows us to invest further in people and our market-leading software to better service Australian SMEs and their referrers.

“The addition of the Supplier Early Payment platform complements our existing invoice, equipment and trade financing products to offer SMEs a full suite of working capital solutions.

“We are also very pleased to have the talented Timelio team joining us to strengthen our capabilities across finance and treasury, technology and marketing, and continuing to offer Timelio customers the experience they love.”

Adam Pinkus, Timelio’s general manager, said: “Earlypay has been supporting SMEs for more than 20 years and this is a great opportunity to continue to support our customers with the resources of a larger business.

“At a time when many SMEs are in search of working capital solutions, we will be able to provide our customers with ready access to the invoice and trade financing they require as well as additional products including equipment finance, invoice collection services and trade debtor protection.”

In light of the acquisition with a significant debtor finance loan portfolio, Brendan Scotter, director at Commercial Point Finance, told The Adviser that brokers needed to do more to remove the stigma around the use of debtor finance, particularly for SMEs.

Mr Scotter stated: “This [debtor finance] is a very old-school product and has been around forever and ever. It’s huge in the UK and the states [US] but it’s just not overly huge in Australia.”

He added that while larger “more sophisticated” companies were aware of it and would look to use it, SMEs remained a minority.

“It’s a fantastic tool to help a company grow like crazy. It’s the only finance I can offer that will keep up with your growth. There’s an ending to overdraft and a business loan is secured by property predominantly and when the equity in the property caps out what are they going to be able to lend you?” Mr Scotter continued.

“Whereas as invoices go from $1 million a month to $2 million to $3 million to $4 million over a year, you can get a funder for three or four months and when suddenly it [debtors] jumps because of a contract for example they [the finance] will jump with you.

“They’ll do it with you when nothing else changes because they’ve got the debt so their security is sorted, they get paid before anybody so it’s a very good product for that.”

However, he found that negativity towards debtor finance was partly due to its assumed relationship with liquidators, as it is a key part of how administrators work to ensure they get paid when sorting a company.

Mr Scotter said many companies avoid the funding method as they do not want to be known for using debtor financing, worried that others will think their business is “going upside down”.

He added: “I holla from the rooftops about it [debtor financing] to clients, because it is another product in the suite, it is a good product and it does a good job for what it’s there for.

“The biggest struggle is that it’s just not well-educated.”

[Related: SME lender reinstates equipment finance product offering]