PROACTIS agrees collaboration with Inspired Capital

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Walker Morris lawyers advise PROACTIS on agreement to develop an innovative accelerated payment solution

Specialist commercial and technology lawyers at law firm Walker Morris have advised AIM quoted PROACTIS Holdings PLC on its exclusive collaboration agreement with Inspired Capital plc to develop an accelerated payment facility (APF) for UK SMEs.

Wetherby-based PROACTIS is a global spend control and eProcurement solutions provider.  The collaboration agreement with Inspired Capital, a leading provider of customer-focussed financial solutions, will enable the parties to work together to develop an innovative market leading solution.

PROACTIS’s eProcurement Platform is a Global Trading Network (GTN) that enables collaborative electronic trading between buyers and suppliers.  This platform will underpin the newly developed APF and Inspired will accelerate the settlement of suppliers’ pre-qualified invoices. PROACTIS estimates that its c.500 blue-chip buying organisations are spending £60-80 billion per annum across c. 1 million SME suppliers, thus representing a significant market opportunity.

Research conducted by the Federation of Small Businesses (FSB Dec 2014) suggests that almost one in five UK SMEs are affected by a ‘serious deterioration of payment practices’.  The research suggests that buying organisations are increasingly exerting power on their supply chain with SMEs experiencing the adverse effects of extended terms of trade. This trend presents a significant opportunity for the provision of supply chain finance for SMEs, whilst allowing buyers to maintain their working capital position. The APF is an effective counter to this growing pressure on SMEs and will offer a solution to cash-pressurised companies at an affordable price.  As a result, PROACTIS and Inspired believe that the APF will have a high level of take-up within UK SMEs.

The APF is expected to be launched to potential customers later this year.  A commercial agreement, with a minimum term of 12 months, will be finalised ahead of market launch.

Rod Jones, PROACTIS’ CEO commented:

“The market place is rapidly changing. Whilst our core principle of driving efficiencies in the procurement and settlement processes remains the same, the PROACTIS business is evolving from a buyer led software author to now include supply chain finance enablement. We are particularly pleased to be working with Inspired and believe it is a high quality partner for this collaboration. We are enthused by the value creation opportunity and look forward to realising that over the coming months and years.”

Brian Cole, Inspired’s CEO commented:

“We are pleased to announce our collaboration with PROACTIS and it is an important step in our ambition to achieve scale in the UK market. More than ever, UK SMEs are being squeezed by larger players in the supply chain. This new product will provide a powerful cash-flow management tool for companies in the UK and form a key part of our financing proposition for SMEs, further supporting a heavily underserved market.”

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