Millbrook's Overdue Loans: Why Borrowers Should Rely on Accredited Brokers

More than a quarter of the loans in Millbrook’s private lending fund are overdue, posing risks for investors in the firm known for lending to Sydney’s high-profile figures. Despite acknowledging this in regulatory documents, Millbrook has often failed to mention overdue loans in its investor updates.

Millbrook, which has lent to notable figures such as Geoffrey Edelsten and Jon Adgemis, has been criticized for not disclosing financial troubles of some borrowers. This lack of transparency comes amid increased scrutiny of the private credit sector by the Australian Securities and Investments Commission (ASIC), which is pushing for better clarity on how private capital providers value their assets.

As of March, Millbrook reported $58.3 million in overdue loans, up from $10.4 million the previous year. Despite this, the company's managing director, David Lyall, has seen his earnings and the firm’s profits rise. Most of Millbrook’s revenue comes from fees, not interest payments.

Instances of insufficient detail in investor communications include a loan for a commercial property in Melbourne, where crucial information about the borrower’s previous legal issues and Millbrook's involvement was omitted.

Millbrook continues to face challenges with overdue loans and legal disputes, without always disclosing these issues fully to investors. Despite the firm's current profitability, its reputation has been affected by these practices.   Given Millbrook’s issues with overdue loans and transparency, borrowers should use trusted brokers and financial advisors for:

Transparency: Brokers ensure you understand the full financial picture of potential lenders.
Credibility: They vet lenders to avoid firms with poor practices.
Complexity: Brokers simplify loan terms and agreements.
Negotiation: They secure better terms and conditions.
Support: Brokers assist with any disputes or issues.

Always select a broker accredited with the MFAA or FBAA—if they aren't, steer clear!