Fintech lender Tradeplus24 has restructured a quarter of a billion dollars to underpin a debt facility and reduce funding costs.
SME lender Tradeplus24 Australia has restructured $25 million of its existing debt facilities to underpin the execution of a debt transaction of over $100 million and reduce its cost of funding by 4 per cent.
As a result of the transaction, Tradeplus24 is structuring a $100 million growth debt facility at terms that it said would enable it to “rapidly scale”, and offer small businesses lines of credit at rates “comparable” to residential property-backed loans.
Adam Lane, managing director of Tradeplus24 Australia, commented: “This new debt deal is an important reflection of the strong confidence the debt capital markets are showing in our unique structure.
“With this cheaper debt, we hope to eliminate the need for more business owners to put their family home at risk to remain solvent, especially when they should be scaling up and growing the Australian economy.”
Alternative asset investment company iPartners secured the senior debt position while boutique investment manager Wentworth Williamson took the remaining mezzanine debt position alongside other existing debt providers.
Travis Miller, managing director of iPartners, stated: “iPartners is very happy to be supporting Tradeplus24 through its next stage of growth. We can see a very bright future for their unique invoice financing model to change the game for Australian SMEs.”
Rob Harmer, portfolio manager at Westworth Williamson, continued: “We have been looking for a quality lender to partner with following the growth of our fund and we have found that in Tradeplus24. They have a quality team, great product and sophisticated debt structure.
“We look forward to partnering with Tradeplus24 to deliver returns for our investors while also helping the wider economy.”
The debt restructuring comes as Tradeplus24 builds its Australian lending volumes following the $25 million raise to fund the ‘rapid expansion’ of its Australian and European operations.
Mr Lane added that the lender hoped to “stamp out unfair industry practices”, which he suggested included “price discrimination”, and prevention of SME clients from taking on other sources of debt, “enforcing purposefully complex fee structures, and locking SMEs into contracts of up to two years, despite the invoices being funded having an average term of around 40 days”, he suggested.