TrailBlazer spinoff starting small with $3.2mln worth of funds deployable
A new private lender armed with $3.2 million of funds deployable is pouncing on the consolidation boom in the mortgage broking industry.
Broker Capital, whose founder Simon Lewis (pictured) comes from TrailBlazer Finance, is targeting mortgage brokers who want to leverage their existing trail book to raise funds for business expansion, portfolio mergers and working capital.
TrailBlazer has a similar offering, although Broker Capital, with its limited initial lending capacity, will be targeting smaller loans of around $250,000.
This is often an underserved segment, as the landscape for trail book lending opens up with the major banks once there is between $500,000 to $1 million at stake.
“Brokers’ trail books are becoming more and more valuable, yet it’s still hard to access capital, which doesn’t make sense,” Lewis told MPA.
Broker Capital does not at this stage have any clients on the books, but Lewis says “better technology” to help brokers access funds quicker will help Broker Capital establish itself on the market.
Down the track, Broker Capital wants to deploy this tech to offer lines of credit to help with working capital, business expansion and other cashflow needs.
When pressed, Lewis did not disclose what rates a broker might expect to get from Broker Capital, barring they are “priced to risk”.
In terms of applying a value to multiple to a broker’s trail book, Broker Capital will look at things like the run-off rate, growth rate and general quality of the book.
Broker Capital is currently a two-man job with $3.2 million of private investor funds deployable (both debt and equity) behind it.
But “once we have some loans in place and a track record, we will raise wholesale funding”, said Lewis. “We’ve spoken to other funders and they’ve expressed interest – we will get back to them once we have some loans on the book.”
