Grow Finance holds investor meetings for ASX listing

Grow Finance plans to capitalise on the challenges facing small and medium businesses seeking loans with big banks.

Grow Finance is believed to be moving forward with plans for an initial public offering, hiring E&P Corporate Advisory to work on the float.

The company is currently holding early investor education meetings to test the appetite for a raise of about $50m in the coming months.

Grow Finance plans to capitalise on the growing challenges facing small to medium enterprises that want loans with the major banks.

With a strong management team in place, the company has so far been successful in gaining scale, which has been helped by the acquisition of a commercial lending book from Eclipx about two years ago.

The Sydney-based company’s founding director and joint boss, Greg Woszczalski, has led the business in providing asset and trade finance, business loans, invoice finance and insurance premium finance to small and medium companies.

It has funded $723m over the past five years and has a current outstanding portfolio of $160m, despite the impact of COVID-19 last year.

Management is targeting an active loan and finance book of $1 billion in three years as it ramps up expansion plans to meet pent-up demand amid the economic recovery.

Mr Woszczalski earlier told The Australian that he wanted to eventually capture 5 per cent of the addressable unfunded small and medium business market, which he estimated to be about $60bn.

While the non-bank lending sector is increasingly crowded, Mr Woszczalski knows the space well after founding 180 Group and growing it into the nation’s third-largest invoice finance firm before selling to ASX-listed CML in 2016.

Prior to that, he was a small business consultant and banker at Merrill Lynch.

Grow has plotted its strategic plans, drawing on a proprietary technology platform, and has also expanded via acquisitions in the past two years.

It snapped up Australian Invoice Finance in July, after the purchase of the Eclipx Commercial business in 2019.

Mr Woszczalski said the firm had been profitable for several years since it started lending.

Last year, Mr Woszczalski said about 1.5 per cent of Grow’s lending and finance portfolio is in hardship, saying a large proportion of that reflected business borrowers in Victoria who were subjected to a prolonged second lockdown.

Grow has funding lines with domestic financial institutions and superannuation funds.

Mr Woszczalski earlier said that Grow would continue to assess buying opportunities.

It has 50 employees across Sydney, Brisbane, and Melbourne and has growth aspirations for the West Australian market.

While Grow deals directly with customers, the lion’s share of its new business comes via brokers.