Australian lendtech Prospa has announced it will acquire Zip Business’s loan book for $15.6 million.
Announcing the buy-out to the Australian Securities Exchange (ASX), Prospa valued its newly acquired commercial loan portfolio from Zip, which covers 370 small businesses, at $18.4 million. The firm said it funded the purchase using existing warehouse funding arrangements.
Zip last May announced it would cease offering new loans as part of a windback of its wider business services offering, with the group opting to focus on its core retail buy now, pay later (BNPL) offering.
The Zip Business brand at the time specialised in unsecured business loans to small- and medium-sized businesses.
At the time of the announced wind back, Zip chief executive of ANZ Cynthia Scott, speaking to industry publication The Adviser, said the move was in line with the business’s “ongoing efforts to simplify our business and our strategy to reach cash group EBITDA profitability during 1H FY2024”.
Zip’s Business Line of Credit solution was offered following its acquisition of the Australia and New Zealand arm of Berlin-based SME lender Spotcap Global in 2019.
Prospa chief executive Greg Moshal said the firm was “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”.
He added: “The acquisition reflects our continued commitment to supporting Australian small businesses with tailored finance for their needs.”
Zip said it is currently working with Prospa on an orderly migration process for its customers.
