Fintech star Prospa's ASX debut was pulled hours before it was due after queries from ASIC

Greg Moshal and Beau Bertoli, co-CEOs of Prospa. Supplied

The ASX listing of small business lender Prospa has been postponed.

The fintech, which was due to list on the ASX at midday today, needs to first answer queries about its business loan terms raised by corporate regulator ASIC.

“Prospa are seeking to clarify queries raised by ASIC yesterday in relation to Prospa’s small business loan terms, in the context of an industry wide review into financial services small business loan terms,” the company says.

“Consequently the listing is expected to be postponed for 48 hours.”

The issue of unfair contract laws was raised last week at the financial services royal commission last week. ASIC was grilled as to why it hadn’t been enforcing unfair contract laws against the big banks.

Prospa is raising $146.5 million in the float at $3.64 per share, valuing the company at $576 million.

Venture capital investors Airtree and SquarePeg have tipped in additional funds to increase their stakes in the the six-year-old business. Entrée Capital will support the IPO to maintain its 34% stake in the company.

Airtree has invested an additional $3 million for 8.4% of Prospa, while SquarePeg put another $10 million in to increase its holding to 4.4% from 3.2%.

Prospa, founded in 2012 by Greg Moshal and Beau Bertoli, lends between $5000 and $250,000 to small businesses, with $200 million in loans currently on its books.

The lender says “small businesses are under-served by banks”.

Prospa’s net revenue almost doubled between 2016 and 2017, from $23.1 million to $53 million. It is forecasting $96.7 million net revenue this financial year.

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