Benchmark owner buys Scottish

SYDNEY investors that backed the national growth of Perth-based cash flow lender, Benchmark Debtor Finance Pty Ltd, have expanded their interests in the sector by purchasing Scottish Pacific Group. BA Venture, a joint venture between Balmain Commercial and Allco Finance Group, has bought Scottish Pacific from St George Bank for an undisclosed sum. This followed its acquisition of a majority stake in Benchmark in December 2005. The acquisitions mean that BA owns two of the largest independent players in the cash-flow lending sector. Scottish Pacific was one of the pioneers of cash flow lending in Australia and was an early employer of Peter Langham, who went out on his own in 1998 to establish Benchmark. Mr Langham moved to Sydney last year to drive Benchmark’s national expansion. Cash flow lending typically involves making cash advances to fast growing businesses backed by the value of their invoices. Scottish Pacific historically provided two forms of cash flow lending – invoice discounting and factoring. St George says the invoice discounting business has been integrated into the bank’s operation, leaving the factoring business available for sale. A St George statement said BA’s acquisition of Scottish Pacific “strategically complements Benchmark’s existing business as well as providing greater geographic exposure and improved economies of scale”. Cash flow lending, which was for many years seen as a form of fringe finance for struggling businesses, increasingly has been accepted as a legitimate financial tool to help business manage their cash flow, especially during periods of rapid growth. Major banks all offer cash flow lending, and BankWest entered the invoice discounting market last year, taking over an operation previously run by HBOS Australia’s Capital Finance arm. It provides advances of up to 85 per cent of outstanding invoices, with no requirement to have real estate as security. Mark Beyer