RIPPLES from the fall of Allco Finance Group continue to work through the market, as the 'for sale' sign goes up at one of its investments, the Perth-founded debtor finance company Scottish Pacific Benchmark.
RIPPLES from the fall of Allco Finance Group continue to work through the market, as the 'for sale' sign goes up at one of its investments, the Perth-founded debtor finance company Scottish Pacific Benchmark.
It is understood Allco liquidators have been scouring the market for a buyer for several months, but have recently ramped up efforts.
Scottish Pacific, headed by local businessman Peter Langham, specialises in making cash advances to businesses backed by the value of their invoices. The company promotes itself as one of the largest independent providers of debtor finance in the country.
Mr Langham told WA Business News the proposed sale was supported by the major stakeholders.
“There's certainly no panic to sell," Mr Langham said.
“Basically, one of our stakeholders is linked to Allco and they would like to get their money. All other stakeholders agreed." A group called BA Venture - a joint venture between Allco and commercial property lender Balmain Commercial - is the holding company.
One industry participant said the proposed sale appeared to be withdrawn for a period, but had recently been more heavily promoted.
Allco was one of the country's biggest casualties of the financial crisis and was placed in liquidation earlier this year with debts of more than $1 billion.
Allco invested in the debtor finance sector through Benchmark Debtor and Scottish Pacific Group - the latter was bought from St George Bank - which were eventually merged.
Cash flow lending, which was for many years seen as a form of fringe finance for struggling businesses, is now generally accepted as a legitimate financing option, especially in tight credit markets.
Western Australia is the fourth biggest market in Australia in terms of debtor finance turnover, according to a report by the Institute for Factors and Discounters, behind NSW, Victoria and Queensland.
Gary Green, the WA state manager at UK group Bibby Financial Services, said the company and wider sector had benefited from tight credit conditions and the subsequent tightening of lending criteria among the banks, leading to businesses seeking other avenues of financing.
He said many small to medium-size businesses faced cash flow problems because invoices were now generally being paid after more than 50 days, as a result of the financial crisis.
“The 30-day payment is almost irrelevant now," Mr Green said.
BankWest and ANZ effectively exited the debtor finance sector in the past 12 months, opting instead to either set up referral systems with third parties or migrate clients to other products.
