JustFund, a Sydney-based start-up that offers loans to individuals facing up-front legal fees for divorce proceedings, has successfully secured a substantial $200 million debt warehouse facility from MA Financial. This funding marks a significant milestone for the company, founded by former lawyers Jack O’Donnell and Andy O’Connor, as it aims to expand its services to those in need.
Since its launch in 2022, JustFund has approved over $175 million in lines of credit for more than 2,000 clients seeking assistance with family law fees. The start-up primarily targets individuals who are ineligible for traditional personal loans or whose assets are tied up in property or frozen during the divorce process. Notably, nearly two-thirds of JustFund’s clients have experienced financial control or domestic violence.
As JustFund’s executive chairman, Craig Carroll, highlighted, the challenges of divorce affect a wide range of Australians. “Separation affects Australians from all walks of life, including those who appear financially comfortable on paper, but those assets are tied up in property or frozen by virtue of the legal process,” he explained.
Innovative Lending Approach
Unlike conventional lending practices that rely on a client’s income or credit score, JustFund employs in-house family lawyers to evaluate each case. This unique assessment provides clients with access to credit based on the anticipated property settlement from their divorce. Loans, along with fees and interest, are repaid from the settlement once finalized.
JustFund charges an interest rate of 9.85 percent on the drawn amount and an assessment fee starting at $560 for credit lines up to $15,000. Additionally, clients pay a monthly fee of $49 to facilitate regular meetings between JustFund’s lawyers and the client’s legal team for ongoing case updates.
Carroll, a fintech investor who supported JustFund with an initial $7 million debt facility, along with co-founders O’Donnell and O’Connor, retains majority ownership of the start-up. The company’s share register also includes notable figures such as Dom Pym, founder of digital bank Up, and Luke Howes, founder of Proviso.
Future Growth and Strategic Partnerships
In November 2023, JustFund secured an additional $75 million senior debt facility from a private credit provider, alongside $11 million in mezzanine funding from various family offices. Carroll noted the importance of this new funding, stating, “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 recent debt facility was provided through MA Financial’s $2.5 billion MA Priority Income Fund. Guy Kaufman, executive director of MA Financial’s global credit solutions team, remarked on JustFund’s appeal, citing the start-up’s strong credit performance and diverse portfolio. “The nature of the underlying loans is very unique, and that’s why the platform is growing really well,” Kaufman stated. Each individual loan typically amounts to less than $100,000, making the funding model distinct in the financial landscape.
JustFund’s innovative approach not only addresses the immediate financial needs of individuals going through divorce but also highlights a growing recognition of the complexities surrounding family law and financial independence. As the company continues to expand its reach and capabilities, it stands poised to make a significant impact on the lives of many Australians navigating the challenges of separation.
