With tax season just underway One Click Group (ASX:1CG) has seen a fast start to the busy tax lodgement season, including strong demand for its Next Day Refund product that was first established last financial year.
The Next Day Refund product provides approved customers the ability to receive an advance cash payment of up to $1,000 of their tax refund the day after lodgement of their tax return. The product costs $207 for a tax lodgement, a premium to a standard tax lodgement of $99. Customers will only qualify for the product if their tax lodgement history and tax payments are up to date as well as a number of other conditions to ensure the company’s default risk is minimised.
The product was initially developed in response to customer demand for timely and efficient access to their tax refund. Following the commercial success and strong uptake of the product last year, the company is pleased to have now finalised a short-term loan note facility of $4.4 million which will allow it to meet the growing demand for the offering.
The additional revenue premium charged for the product more than covers financing costs. Further, the tax refund is typically received from the ATO into One Click’s Trust Account circa two weeks after the lodgement meaning the advance is only funded for a minimal amount of time.
The company’s wholly owned subsidiary, Mobile Business Devices (MBD) has issued 4.4 million loan notes under the facility, which are repayable in 60 days, with an option to extend for an additional 30 days, at MBD’s sole discretion. An Establishment Fee of 3% is charged on monies drawn along with a coupon of 12% p.a. on the outstanding amount.
Depending on demand for the Next Day Refund product, MBD has reserved the option to increase the amount raised under the Facility over the three-month period to 30 September 2024 to up to an aggregate of $5 million.
The company’s directors and related parties have contributed $815,000 to the facility on the same terms as non-related party investors. There are no third-party fees payable in connection with facilitation of the facility.
“We are pleased to be able to again offer new and existing customers convenient and efficient access to their tax refund via our Next Day Refund product,” Managing Director Mark Waller said.
“The Next Day Refund product provides a valuable point of difference to lodge your tax return with One Click Life, receiving your refund quicker.
“With the Facility now in effect, the company is well placed to deliver strong results for the tax season where we expect strong growth on the last Financial Year and we look forward to providing investors with regular market updates in the coming months.”