Oak Street is ending its independent lending business


RIA financier Oak Street Funding has ended its practice of lending money to independent advisers, a source familiar with the matter said. Citywire.

Based in Indianapolis, Indiana, Oak Street Funding offers RIA loans to fund mergers and acquisitions, buy back stock to fund succession planning, or serve as general working capital. The company competes with other independent lenders such as Live Oak Bank and PPC Loan.

A spokeswoman for Oak Street Funding did not respond to multiple requests for comment.

Wirehouse’s independent advisers rely on lenders like Oak Street Funding for seed capital to hire advisers, acquire office space and build a technology stack, among other needs.

“It’s super risky,” an industry executive told RIA. “Oak Street is not a bank. If you don’t know how to take out a loan, it’s a [tough] Business.’

A source close to the situation said Citywire that Oak Street changed its lending policy to advisors who don’t yet have cash after a loan went bad, leaving the lender ‘under water’.

The independent lending field has a number of lenders with different backgrounds than groups like Oak Street and Live Oak. The RIA Dynasty Financial Partners platform, for example, offers independent advisors a wirehouse-style repayable loan and an income participation rating.

More recently, minority investor RIA and alternative asset manager Merchant Investment Management unveiled plans to launch its own independent lending business earlier this summer.

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