New fund to target UK divorce lending market
Novitas Loans has launched a fund seeking to make a return from the rising cost of divorce and the lack of available bank credit.
The Novitas Divorce Litigation fund has been developed “to create an alternative lending source for individuals who need help to pay for the financial burden of a divorce”.
Loans of up to £250,000 will be offered to clients of approved solicitor firms to help cover the cost of divorce. The redemption of this loan will typically be settled after the legal process has ended and will be met from matrimonial assets.
Investors in the fund, which has a minimum investment of £20,000, will receive an annual return of 8%.
Jason Reeve, founder and lead manager of the fund, says: “The reduction in banking credit, coupled with the government cut backs to legal aid, means that people seeking a divorce can face a hefty financial burden.”
Novitas says the total size of the UK divorce lending market is estimated to be about £100m a year. The average cost of a divorce is £40,000 each side in London and £13,000 elsewhere in the UK.