Following this announcement, the transaction is expected to strengthen Spenda’s balance sheet, as well as reduce risk exposure and improve revenue generation through a new referral agreement with Grapple.
In addition, the companies will continue to focus on meeting the needs, preferences, and demands of clients and users in an ever-evolving market, while prioritising the process of remaining compliant with the regulatory requirements and laws of the industry as well.
Through this initiative, the sale of the loan book represents the first step in the company’s strategy to restructure its balance sheet and release capital whilst realising value through the process of bringing forward future cashflows. At the same time, with the software capable and proven in managing financing flows, credit processes, risk management, and payment reconciliation, the company will have the possibility to enable third-party lending products to be onboarded onto the platform via revenue sharing agreements as executed with Grapple.
In addition, the sale will release USD 2.3 million in first-loss capital, in addition to the USD 2 million sale proceeds. This move aims to recapitalise Spenda’s balance sheet, providing an additional USD 4.3 million in available working capital while generating operational savings of approximately USD 600,000 per annum.
Through the process of divesting its invoice finance loan book, Spenda is set to transition its income stream towards bundled Software-as-a-Service (SaaS) and payment tools, increasing margins while eliminating lending and credit risk. Although the sale is expected to result in a reduction of approximately USD 50,000 per month in gross profit, cost savings, and the growth of other product lines are expected to offset this impact and enhance overall operating margins.
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