JustFund, a Sydney-based start-up providing financial support for divorce-related legal fees, has secured a significant $200 million debt facility from MA Financial. This funding is aimed at expanding its services, as demand for divorce financing continues to increase.
Founded in 2022 by former lawyers Jack O’Donnell and Andy O’Connor, JustFund has approved over $175 million in credit lines for more than 2,000 clients. The company targets individuals facing challenges in covering upfront legal costs associated with divorce, particularly those who do not qualify for traditional personal loans or whose assets are tied up during legal proceedings.
Addressing Financial Barriers in Divorce
According to JustFund’s executive chairman Craig Carroll, nearly two-thirds of its clients have reported experiences of financial control or domestic violence. He emphasized that divorce impacts individuals across various socio-economic backgrounds, stating, “Separation affects Australians from all walks of life, including those who appear financially comfortable on paper, but whose assets are tied up in property or frozen by virtue of the legal process.”
Unlike conventional lending practices that assess credit scores or income, JustFund’s in-house family lawyers evaluate each case based on the anticipated property settlement. Loans, along with associated fees and interest, are repaid from these settlements once finalised.
JustFund charges an interest rate of 9.85 percent on the amount drawn down. Additional costs include an assessment fee starting at $560 for credit lines up to $15,000, and a $49 monthly fee, which covers regular updates from its legal team to the client’s attorney.
Funding Growth and Future Prospects
In November 2022, JustFund secured a $75 million senior debt facility alongside $11 million in mezzanine funding from various family offices. Carroll noted, “We had outgrown our prior debt facilities, so this funding ensures the continued growth of the business. Debt is essentially the lifeblood that allows us to provide a solution to clients.”
The latest debt facility is provided through MA Financial’s $2.5 billion MA Priority Income Fund. Guy Kaufman, executive director of MA Financial’s global credit solutions team, expressed confidence in JustFund’s business model, citing its strong credit performance and a diverse portfolio of loans. “The nature of the underlying loans is very unique, and that’s why the platform is growing really well,” Kaufman remarked, adding that individual loans are typically small, often less than $100,000.
With this substantial funding boost, JustFund aims to enhance its offerings and support an increasing number of individuals navigating the complexities of divorce. The firm’s innovative approach to financing legal fees positions it as a key player in an evolving market, dedicated to helping clients access the necessary resources during challenging times.
