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Refund Home Loans has gone into voluntary administration effective from 5pm yesterday.
According to a communication sent from the administrators SV Partners to Refund Home Loan franchisees, increasing pressure from creditors forced the company to call in administrators to complete a clean and quick sale of the business.
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Speaking to The Adviser, a spokesperson from Refund Home Loans said the administrators were currently working to protect the Refund Home Loans business, keep the business trading and secure a buyer for the business.
“As far as I am aware, there have been a number of companies that have expressed their interest in buying the Refund Home Loans business, but they are just waiting for the administrators to give them the green light,” the spokesperson said.
The spokesperson said the administrators were hoping to find a buyer that would keep the franchisee model intact.
“Right now it is business as usual for our franchisees. If there are any changes, the administrators will let them know in advance.”
According to the communication, up until the end of 2010, all costs for the growth of the company had been met out of cash flow.
At that point, it became apparent that further funding was required and the directors of Refund Home Loans expected to receive further support from the bank. However, the Queensland floods prevented that support being provided and the lack of further funding has left the company in the same position as before.
Whatever the outcome of this administration, SV Partners believes the directors may become bankrupt as a result.
According to the Refund spokesperson, administration of the home loans business will not affect the financial planning and real estate businesses.
