Grow Finance pulls out of invoice finance and trade finance

While the lender started as a trade finance and asset finance lender for small- to medium-sized enterprises (SMEs) in 2016 (and acquired debtor finance provider Australian Invoice Finance Limited in 2021), its executives have revealed that invoice and trade finance products now represent less than 3 per cent of its business.

As such, the lender plans to focus on scaling its asset finance, business term loans, and insurance premium funding products moving forward as well as launching new products.

Grow commented that while it believes its “funding costs and speed to market in these [aforementioned] products are industry-leading”, it did not have a similar “competitive advantage” for its bespoke invoice finance and trade finance products. It has therefore chosen to cease offering these products.

As of Friday (1 September), all existing invoice and trade facilities held by Grow have been taken over by debtor finance specialist ScotPac Business Finance (ScotPac).

Grow said the terms and conditions of the existing trade and invoice finance facilities will not change under the transition to ScotPac.

However, invoice finance clients will receive new log-in credentials from ScotPac to access the portal operating platform.

Grow flagged that ScotPac has over 35 years’ experience in invoice finance and around 14 years of experience in trade finance and was therefore well-placed to manage the facilities.

Speaking to The Adviser, executive director and co-founder of Grow Finance, David Verschoor, said: “Grow Finance is pleased to be working with a premium brand like ScotPac to find the best possible working capital solution for our clients.

“With ScotPac already doing a great job at invoice finance and trade finance, we were more than pleased to be able to transition our clients into, what I consider, very safe hands.”

Grow’s invoice finance and trade finance client relationship managers have been seconded over to ScotPac to help with the transition and are working alongside ScotPac’s operations manager for asset finance Dan Co (who had formerly been relationship manager at Grow).

ScotPac is reportedly writing to clients informing them that their facility is now active with ScotPac.

A spokesperson for ScotPac told The Adviser that it was “delighted” to be welcoming Grow’s clients “onboard”, adding: “We expect the transition to be as seamless as possible, with minimal disruption to clients.

“The relationship teams at both Grow and ScotPac have been working together to contact all clients affected by the change and ensure the transition is as smooth as possible.”

Grow set to launch new Mastercard offering

As well as focusing on its existing products, Mr Verschoor told The Adviser that Grow is set to expand its product offering.

According to Mr Verschoor, Grow recently entered into a “huge relationship” with Mastercard and is set to release a Mastercard credit card product for SMEs next month.

“We have to focus our resources on things that we could be really good at ... And we couldn’t be good at everything. So we decided that asset finance, business loans, insurance premium financing and credit cards were the areas that we wanted to focus on,” he told The Adviser.

The lender has already launched a partnership with Mastercard in which it has committed to supporting its Priceless Planet Coalition; a tree-planting initiative that aims to plant 100 million trees by 2025.

Grow has said it will commit to plant a tree for every loan it settles, with Mastercard matching that commitment.

Mr Verschoor said: “We’ll be helping plant two trees for every loan that we do to help create a better future for the current and future generation.”

To hear more about the offerings at Grow Finance and how brokers could diversify into SME lending and help business owners with asset finance and other funding needs, register for the free SME Broker Bootcamp 2023.

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• Wednesday 6 September: Rydges South Bank, Brisbane
• Tuesday, 12 September: Montage, Sydney
• Thursday, 14 September: Zinc, Melbourne

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[Related: Businesses must adapt to market conditions: Grow Finance]