ROADNIGHT MUSING – MAY 2024
LEVERAGING OUR DEEP EXPERIENCE IN FINANCING NON-BANK FINANCE COMPANIES
Roadnight Capital focuses on providing its borrowers with comprehensive and flexible capital solutions that help them grow and execute their strategic initiatives. While getting repaid means we must find another great investment, it is pleasing when our borrowers deliver on their business plans and effectively outgrow us.
We recently celebrated a significant success with the acquisition of privately owned BidFin, an innovative financier of software, hardware, and professional services for Australian businesses, by ASX-listed Humm Group. This successful transaction also involved Humm refinancing our facility.
In early 2022, we provided BidFin with a senior secured facility after being attracted to the quality of the company’s offering, clients, and management. Since its founding, BidFin has transacted with over 1,200 technology suppliers and enabled digital transformation for organisations and government entities.
Our initial loan involved an A$10m committed facility, with the borrower able to seek additional drawdowns to fund growth assuming certain conditions were met. BidFin took advantage of this option at the end of 2022, upsizing the facility and assisting in its transition/pathway to finding a larger wholesale funding warehouse facility.
Ross Simon, Founder of BidFin, when asked why he decided to partner with Roadnight Capital and how he found the interactions over the last 2-years, said:
“Roadnight was the ideal capital partner for BidFin as it provided us with flexible funding that let us focus on what we do best – sales and providing our clients with innovative financial solutions.”
For Roadnight, non-bank finance companies are a key area of expertise where we have:
Deep understanding of the various sub-asset classes (consumer, commercial, equipment and the like) and their credit processes.
Knowledge of the issues and risks associated with ongoing loan management and collecting payment.
Experience building the type of loan portfolio that could access cheaper capital using a warehouse/securitisation structure.
Unit economics and the challenges associated with scaling.
This expertise allows Roadnight to structure funding against collateral pools and ensure the appropriate loan and risk management structure are in place to protect against the downside and support the business in its growth objectives.
Roadnight utilised several pools of our capital to fund the facility, with the Diversified Income Fund and our Co-Investment partner platform participating. The investment’s return aligned with the overall return profile of the respective pools of capital and provided investors with a strong risk-adjusted return.