Debtor finance company Scottish Pacific is betting that the growth in its business resulting from several recent acquisitions will give it the size to beef up its marketing and increase awareness of debtor finance among Australian small and medium businesses.The company's challenge is to overcome the weakness of the debtor finance market, which has suffered from negligible growth and a shrinking customer base for almost a decade.It must also contend with the competitive challenge of marketplace lenders, some of which have targeted the sector.Scottish Pacific lists on the Australian Securities Exchange today, offering investors access to a debtor finance specialist. At the offer price of A$3.20 a share, Scottish Pacific will have a market capitalisation of $445 million.Initial public offer proceeds of $293 million come from the issue of 24.2 million new shares worth $77.3 million, and the sale of 67.6 million existing shares worth $216.2 million.Major shareholder Next Capital is reducing its holding from 38.2 per cent to 16.6 per cent and IFM Investors is reducing its stake from 28.5 per cent to 12.4 per cent.Under a debtor finance arrangement, the financier takes an assignment of receivables from a client business and advances a proportion (usually 80 per cent) of the value of the invoices, less fees. The balance is paid to the client when the invoices are paid.Scottish Pacific claims a 20 per cent share of the market, with 1600 business clients. Client turnover is around 20 per cent a year.It also offers trade finance, asset finance and bad debt protected facilities.It relies on a referral network that includes commercial finance brokers, accountants, banks and clients.According to a pro forma financial statement in the prospectus, Scottish Pacific's net profit for the year to June is expected to be $20.1 million, compared with $17.7 million in the previous corresponding period. The company has forecast net profit of $26 million in the 2016/17 financial year. How much of the expected growth is organic and how much comes from acquisitions is not spelled out.It is forecasting revenue growth of 16.5 per cent to $109.1 million in the 2016/17 year.It has a low-risk balance sheet, with an average loan-to-valuation ratio of 57 per cent over the past three years. Its loss ratio has averaged 0.44 per cent over the past ten years.The company has debt of $54 million. It said it had long-standing funding relationships with major banks that include a mezzanine facility and corporate debt facilities.Scottish Pacific has made several acquisitions in the past year. Last December last year it acquired the Australian and New Zealand businesses of Bibby Financial Services, a rival debtor finance provider. This year it has acquired the Australian debtor finance business of GE Capital Finance and Suncorp's debtor finance business.The company believes the debtor finance market is "underpenetrated" compared with other developed economies. It estimates that debtor finance penetration is four per cent of business finance in Australia, compared with 16 per cent in the United Kingdom.It believes its increased scale, after the Bibby GE and