Impact gets the lawyers on side

Specialist lender Impact Capital yesterday reported a loss of $296,000 for the year to June but the disappointing bottom line disguised the fact that Impact's underlying business grew strongly.

Impact lends against contingent assets - benefits likely to flow from personal injury claims, matrimonial settlements and inheritances. It also offers a line of credit to litigants.

Net interest income increased from $2.8 to $5.5 million. The company made a loss after taking a writedown of $2.4 million on a United Kingdom finance business in which it had a substantial investment.

Profit excluding impairment was $2.9 million, up from a profit of $100,000 in 2006.

Loans and advances increased from $18 to $39 million. The company put this down to what is described as "the ever-increasing acceptance by both the legal fraternity and the public of this type of funding."

The company said it had 300 law firms in Australia and New Zealand providing referrals for its family law product.

Impact said it had reduced its exposure to its loss-making UK investment, Impact Holdings (UK) from 21 to 15 per cent.