Beforepay CEO Jamie Twiss
Pay advance company Beforepay has achieved profitability and is now looking to expand, announcing the launch a B2B business that will provide its lending technology and risk models to third parties.
The new business has its own brand, Carrington Labs, and initially it will target offshore lenders.
Its first product is a decision engine that includes a risk management module that “uses alternative data to make quick, accurate lending decisions in a fully automated low-cost manner”.
Other features include pay cycle detection, a risk scoring model, personalised limit settings and repayment scheduling and debiting.
It also has plans to offer an end-to-end loan origination and servicing platform.
Beforepay released its December 2023 half results last week, reporting its maiden half-year profit. It made pay advances of A$359 million, an increase of 18 per cent over the previous corresponding period, and grew revenue 21 per cent to $17.6 million.
It cut operating expenses and its expected credit loss expense, producing a profit of $2.2 million, compared with a loss of $4.4 million in the previous corresponding period.
The company claims to have 235,644 active users – up 16 per cent year-on-year. Loans were for an average of $387, repaid over an average of 26 days.
The company has tightened its credit standards, with the result that gross defaults fell from 3.2 per cent of advances in the December half 2022 to 2.3 per cent in the latest half. Back in 2021 defaults were above 7 per cent.
In addition to the launch of the B2B business, Beforepay plans to apply for an Australian Credit Licence, so it can offer regulated credit products.
It is preparing to test different loan sizes and durations, and alternative pricing structures for longer-term loans.