U.S.-based Axiom Bank is expanding its business lending capabilities through the acquisition of Allied Affiliated Funding, reports said Thursday (Aug. 23). A press release announced the takeover agreement, which will see Axiom absorbing Allied’s asset-based lending and factoring offerings. The acquisition will also bridge Allied’s existing customers to the banking and cash management offerings of Axiom, the companies said.
Allied will be known as Axiom Factoring following the completion of the deal. Financial details of the takeover were not disclosed.
According to the press release, Allied targets small and middle-market companies with its invoice financing solution. The firm focuses on trucking, construction, manufacturing, staffing, oil and gas, and telecommunications borrowers, with financing ranging from $100,000 to $10 million. Its CEO, Clay Tramel, will remain in the position.
Invoice factoring is a growing part of the alternative business finance landscape, but not without its challenges. Last year, BlueVine discussed some of the industry’s top hurdles as alternative lenders OnDeck, CAN Capital, LendingClub and others hit several bumps in the road. According to BlueVine’s Chief Revenue Officer Eric Sager, the industry’s challenges can be traced back not to consumer skepticism, but to investor skepticism.
“I don’t think [the market] will dramatically improve right away,” Sager said at the time. “But if you provide real value to customers and partners that everyone can clearly measure and market, equity investors see that, and it makes a difference.”
According to another factoring company, Bibby Financial Services, the manufacturing space is a particularly prominent target for invoice financing, as loans are secured against hard assets like inventory or plants. Bibby’s head of operations Calum Williamson told PYMNTS that growth in oil and gas lies ahead for the factoring industry, as well as in verticals like HR and staffing, as organizations look toward financing to meet their payroll obligations.