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THORN EQUIPMENT FINANCE TRADE & DEBTOR FINANCE

Thorn Business Finance (TBF) consists of Thorn Equipment Finance (TEF), Thorn Trade & Debtor Finance (TDF), and strategic partner, Cashflow It (specialist funder to the franchise sector).

Across its various businesses, Thorn Business Finance provides equipment loans, leases, debtor finance, trade finance and capital funding solutions, through direct customer relationships and Thorn’s multi-channel distribution network.

An investment in technology has streamlined processes across the different businesses, with all brands now under the Thorn Business Finance banner. This has enhanced the business finance offering, enabling cross selling of products and solutions to new and existing customers.

Strategic
Intent

Thorn Business Finance operates in niche markets underserviced by the banks, offering products and solutions to small and medium enterprises and the franchise sector.

Growth is driven by a very clear strategy around the market the business serves, the financial products it provides, and the relationships with brokers and white label partners. This combination is intended to support SMEs in their day-to-day operations and growth ambitions.

As Thorn strengthens its relationships with brokers and strategic partners, there is also an opportunity to bring additional financial products to SMEs, such as small business loans, to help them manage cash flow better.

DEVELOP
product offering to create cross-sell opportunities and drive organic growth
EXPAND
complementary acquisitions, partnership opportunities, and strategic alliances
ENHANCE
profitability and scale through synergies and leveraging broader business capabilities

Thorn Equipment
Finance

Thorn’s Equipment Finance division has grown significantly in FY17 mainly driven by a strong relationship with brokers and strategic partners, resulting in receivables growth of 80 per cent.

This division is now a significant contributor to earnings diversity within the group, gaining strong growth momentum and providing a growing proportion of group earnings. Equipment Finance grew revenue and EBIT strongly (up 58 per cent to $26.4 million and 83 per cent to $16.1 million respectively) with the support of brokers and partners and the success of franchise financing.

Equipment Finance provides a unique offering as a specialist source of funds for SMEs, a segment representing 99 per cent of Australian businesses which employ around 70 per cent of the entire Australian workforce. Equipment Finance provides SMEs with access to equipment they need to operate their businesses, from specialised medical equipment to information technology, commercial kitchen equipment, solar products, machinery and vehicles.

In FY17, Thorn has further tailored its offering to introducers and select brokers, driving organic growth and higher deal volume. Thorn has built a strong reputation in the equipment finance market, with brokers increasingly choosing TEF over competitors to assist their SME clients.

Thorn Equipment Finance’s diversity of assets and customers mean arrears and losses are well controlled. There is a moderate concentration of catering equipment and motor vehicles, and the average transaction is around $30,000.

CASHFLOW IT

Cashflow IT is an exclusive strategic partnership providing specialised lending solutions to the franchise sector. Working as an integral part of Thorn Business Finance, Cashflow It through Thorn provides equipment finance to some of Australia’s largest and best known franchise groups. Setting itself apart through a deep understanding of the challenges faced by both franchisees and franchisors, Cashflow It shows how expertise and a tailored approach can deliver a service experience beyond that of the banks, a feature highly valued by Australian businesses.

In FY17, the Cashflow It partnership continued to make a positive contribution, as the focus on the franchise segment increased. This translated into significant growth in the franchising model, with Thorn working directly with franchise groups as well as franchisees themselves.

In addition to the usual franchise groups operating in fitness and food, Thorn has seen growth in other industry sectors including health + wellbeing, real estate and newsagencies. The average loan in the franchise sector has increased as operators understand a stronger level of support is needed to succeed in a competitive market.

Where traditional lenders have NARROW requirements, the team at THORN understand the challenges of a growing BUSINESS and the NEED TO FINANCE GROWTH

partners
for growth

CUSTOMER STORY

Established in 1986, Oporto was founded on creating an authentic Portuguese taste. Today, Oporto has over 140 restaurants across Australia. Oporto is one of three franchise systems from Craveable Brands (formerly Quick Service Restaurant Holdings).

Cashflow It’s accreditation program offers Oporto franchise partners pre-approved funding for all of their asset finance requirements.

Through the use of new dynamic restaurant designs, new uniforms, a loyalty program, marketing engagement and ongoing social media campaigns, Oporto is ensuring it maintains its image as a young, engaged and dynamic brand.

Cashflow It has been able to assist Oporto with the roll out of the new restaurant design by providing finance to franchise partners for the costs associated with the refurbishment.

“Cashflow It has supported our franchise partners by providing an alternative to traditional bank lending. They provide a variety of finance options to our franchise partners from equipment finance, refurbishment and full store fit out. Their application process is simple, efficient and they also provide a great customer service.”

– Carl Tjandra, Franchise Analytical Manager

Thorn Trade &
Debtor Finance

Access to adequate capital is one of the greatest challenges faced by Australian Small and Medium Enterprises. Thorn Trade & Debtor Finance addresses this issue by unlocking the cash tied up in business-to-business sales, allowing SME’s to raise funds against invoices, specific debtors, or their entire debtors ledger. This flexible and scalable finance product provides our customers with the capital and cash-flow they need to invest in their businesses and to drive growth.

In FY17 TDF completed the transformation of its acquired Debtor Finance business, adding resources in key markets and aligning operations to better leverage the Thorn Group infrastructure. At the end of the FY17 year the business was more closely aligned with the fast growing Thorn Equipment Finance business, all under the Thorn Business Finance banner. This alignment of business streams supports Thorn’s strategy of being a niche lender to Australian SME’s, providing a broad range of financial products and services that allow those business customers to thrive.

Looking to the future Thorn is setting new benchmarks for flexibility and ease of implementation when it comes to financing invoices and debtors. The future of Debtor Finance for Thorn in Australia is bright, delivering simple and cost effective solutions to Australian SME’s, both directly and through our network of partners.

Running a small business in the building industry today

TDF Customer Story

Debtor funding has come a long way in the last 15 to 20 years, from what was historically quite a limited product with a number of negative connotations, to a modern incarnation as flexible and scalable source of business funding.

This has been a necessary evolution with market factors driving down prices and forcing businesses to operate on ever narrowing margins. Combine this with ever extending trading terms and the resulting slow cash cycle puts considerable restraints on business growth.

Poly-Tech Industrial Services was established in 1984 to provide practical solutions for the repair and protection of assets against the corrosive effects associated with all forms of industry, from mining and automotive engineering to food processing.

Thorn Trade & Debtor Finance (TDF) provides a modern and holistic approach to providing small businesses with a funding solution that is tailored to the individual needs of the business. Unlike banks or other debtor funding facilities, Thorn understands the processes of our business and has created a lending package which provides us with the flexibility to meet our needs. The company has a deep understanding of our business and our client base and so we have a business partner rather than a funding facility.

Client trust is very important in our industry and Thorn provides a very low-key interface with our clients. Poly-Tech clients are comfortable in knowing we have access to such a facility because it demonstrates we have sufficient cash flow to run our business.

– Steve Church, Founding Director, Poly-Tech