SmartPay chases major investors

File photo / Martin Sykes

SmartPay is looking to attract investors with at least $500,000 to provide funding lines for its growing rental business.

The company provides products and services to merchants, mainly related to eftpos, and uses subscription rental agreements under which customers contract for a fixed term, paying fixed monthly amounts.

SmartPay securitises those contracts to generate working capital for its operations.

The company said its bulk funding finance offer would augment funding for contracts in its rental book that it already had with Kiwibank, Finance Now and some third party lenders.

SmartPay managing director Ian Bailey said the company was looking to provide significantly higher interest rates than those provided by banks, possibly about 12 per cent, depending on how much an individual invested.

At the same time that would be significantly less than the rates the company was paying in some cases now, with part of the aim of the offer being to reduce SmartPay's overall interest bill.

He did not have a target for the number of investors being sought, but said that if the company attracted 20 to 30 investors it could raise $10 million to $15 million.

SmartPay said debt related to funding for its rental book had grown from $4.6 million in March to $11 million at the end of September, and was expected to grow to more than $30 million by next March.

- NZPA