DirectMoney announces capital raising

The company said in an ASX statement that it is offering eligible shareholders the opportunity to participate in a pro-rata non-renounceable offer of one new share for every two existing shares held at an issue price of 4.2 cents per new share, with the aim of raising up to $5.7 million.

“The company intends to apply the funds to support key business objectives and growth projects”, DirectMoney said.

Specifically, DirectMoney plans to use $2 million of the funding for “additional lending to approved loan applicants”, while $1.8 million will go towards “general working capital” and $1 million will serve as “available capital to use as collateral for proposed future loan sale transactions to major Australian financial institutions”.

Over the next 12 months, the lender also plans to put $300,000 towards the marketing of its Personal Loan Fund, and $250,000 will be set aside to cover the costs of BDM and broker support, as well as broker channel marketing.

DirectMoney said the remaining $400,000 from the capital raising will cover the costs of the offer.

The announcement comes after DirectMoney signed a non-binding Term Sheet agreement with a major bank to establish a $20 million three-year loan sale facility.

[Related: DirectMoney inks loan referral deal with MyState]