MLC is to launch a loan package for financial planning firms in conjunction with sister company Clydesdale Bank.
The MLC Strategic Partner Funding Program bases lending against a financial advisory firms cash flow stream as opposed to the traditional method of security over assets.
MLC and Clydesdale Bank, both members of the National Australia Bank Group, say they are the first financial institutions to form such an alliance to offer a loan facility specifically for financial planning firms.
The loan facility will provide firms with the opportunity to borrow money to fund the expansion of their business either by management buy-out or acquisition.
MLC head of IFA distribution Peter Smith says: “It has long been an issue for IFA businesses looking to use debt financing for growth, that banks have not generally understood the IFA business model and the attractive revenue streams that a well structured one can generate.
We believe the MLC Strategic Partner Funding Program will be well received by IFA firms looking to use debt finance to grow their business as it is designed specifically with the IFA sector in mind and uses business cash flow as a key lending security.”