New lender to offer trail book loans for brokers

Broker Funder provides funding secured against trail income and is primarily designed to support acquisitions, business growth, and operational investment for brokers.

The new lender announced that Loan Market Group (LMG) is the first aggregator partner to offer the funding solution to its brokers.

Broker Funder will initially provide loans ranging from $50,000–$500,000, secured solely against trail income and assessed at a two times annualised revenue multiple, with up to 70 per cent LVR.

Funding is structured as a principal and interest loan over one to five years through a low-documentation process, with approvals and settlements often completed within as little as one week.

Broker Funder said that the structure differs from traditional commercial finance models, which often require property security, while also contrasting with unsecured lending products that can carry higher interest rates.

Broker Funder has been launched by alternative finance specialist Angus Young in collaboration with Trail Homes founder Nick Young, with the business targeting growing demand for capital solutions within the mortgage broking sector.

Founder and CEO Angus Young said the business was designed to support the next stage of growth across the mortgage broking sector.

“Broker Funder’s primary focus is supporting the next phase of industry growth through a ‘self-funded’ model that enables brokers to leverage their trail books to fund acquisitions, business expansion, staffing, working capital, debt consolidation, refinance tax liabilities, and so forth,” he said.

“This structure provides brokers with the dual benefit of a capital injection without encumbering other assets.”

Loan Market Group executive director and CEO Ewen Stafford said the launch comes amid increasing demand for funding solutions linked to succession planning and consolidation activity across the industry.

“Broker Funder gives brokers more flexibility at a time when many are planning for long-term growth,” Stafford said.

“Across LMG and the wider industry, we’re seeing strong momentum around succession and consolidation. Established brokers are exploring transition pathways, while a new generation of brokers is looking to acquire and grow existing businesses.

“This is driving demand for solutions that enable brokers to access funding and grow sustainably.”

Angus Young said the strongest interest to date had come from brokers pursuing trail book acquisitions.

“In particular, there’s been strong interest from brokers pursuing trail book acquisitions,” he said.

“The model can be structured using the trail from the book being purchased to fund the loan repayments, the ‘loan pays for itself.’

“For example, a broker with $10,000 in monthly trail looking to purchase another $10,000 per month trail book may be able to access upwards of $335,000 in funding to facilitate the purchase.

“With indicative P&I repayments of approximately $8,000 per month over a five-year term, this means the new acquisition is not only paid off by end of the loan term, but potentially the repayments are completely funded by the new trail book being acquired.”

Broker Funder said the facility also allows early repayments without significant penalties, providing brokers with additional flexibility where businesses grow or transactions settle earlier than expected.

He added that the structure could also create tax and cash flow advantages depending on how the funding is used.

“The facility may also provide attractive tax and cash flow advantages, particularly where the funding is used for acquisitions or growth initiatives – so it’s worthwhile discussing in collaboration with an accountant,” he said.

Looking ahead, Young said demand for specialist funding solutions tailored to broker businesses was expected to increase as the sector continued to evolve.

“As the mortgage broking industry continues to mature, access to tailored, purpose-built capital solutions will become increasingly important,” he said.

“We’re dedicated to supporting this next phase of industry evolution by enabling brokers to efficiently access and leverage the value of their recurring income streams.”

[Related: How are lenders adjusting servicing in the wake of the budget?]

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