Profitable debt solutions business Debtmatters will join AIM in late June following a placing to raise £5.2m, including £3m of new money, to ramp up marketing and advertising efforts.

Bolton-based Debtmatters provides consumers in debt with a permanent solution to their problems in the form of Individual Voluntary Arrangements (IVAs), a fast-growing market. IVAs, legal agreements between creditor and debt-laden consumers, involve the consumer paying an agreed amount into a trust account supervised by Debtmatters’ insolvency practitioners.

IVAs are proving popular because they provide the consumer with a conclusive, and usually reduced, debt solution that avoids bankruptcy and its associated stigma and aggravation, and the creditor gets a percentage of the money owed cost effectively, rather than nothing at all. Chief executive Ges Ratcliffe explains that ‘we only get paid if we successfully achieve an IVA, and we achieve an IVA in excess of 90% of our cases’.

Debtmatters, which will join rivals Debt Free Direct and Accuma on AIM, has 7% of a massive market – in the UK last year, consumer debt passed the £1 trillion level and, apparently, it is rising at a rate of £1m every four minutes! Ratcliffe argues the company has an efficient model, targeting IVA clients via local radio and national newspaper advertising. Ratcliffe also claims the group processes IVA cases quicker than rivals and, unlike them, offers the option of a home visit.

Charles Stanley is adviser and broker to the forthcoming float.