Quick answer
A private lender loan is business finance from a non-bank lender that funds loans from private or wholesale capital rather than customer deposits. Private lenders set their own credit rules, so they can approve property-secured loans quickly, accept complex income or past credit issues and structure repayment around a sale or refinance. Loans range from $20,000 to $5,000,000.
Key points
- Non-bank lenders set their own policy instead of following bank scorecards
- Decisions centre on the property and the exit, not servicing ratios
- Suited to deadlines, complex income, tax arrears and credit blemishes
- Usually short to medium term, with flexibility if the exit runs late
- Pricing reflects speed and flexibility; compare total dollar cost
What is a private lender?
In Australian business finance, a private lender is any lender that is not a bank and does not fund its loans from customer deposits. The capital usually comes from private investors, family offices, wholesale funds or the lender’s own balance sheet. Because they are not bound by bank-style credit scorecards, private lenders write their own rules. For property-secured business loans, those rules centre on two things: how strong is the security, and how will the loan be repaid?
Private lending has grown steadily as banks have tightened their appetite for anything outside a standard profile. The Reserve Bank has noted the growth of non-bank lending in its financial stability reviews. For business owners, the practical effect is choice: when the bank cannot help in time, there is another route that relies on property rather than paperwork.
How private lenders think about a deal
Security first. The lender looks at the property’s value, type, location and existing debt. Residential property in an established area, a tenanted commercial building or an industrial unit are all readily accepted. Vacant land and specialised property are considered case by case. No valuation is needed before approval; the property is assessed from market evidence.
Exit second. Private loans are usually repaid by a specific event. The lender wants to see it: a listing agreement or sale contract, a refinance approval or correspondence, or a contract showing an incoming payment.
Borrower third. Identity, entity structure and an honest explanation of the purpose and any credit or tax issues. Private lenders deal with imperfect situations every day; what they need is the full story up front.
When a private loan is the right tool
| Situation | Why a bank struggles | How a private loan helps |
|---|---|---|
| Settlement in days | Formal valuation and credit process take weeks | Assessment without a valuation, funds in as little as 24 hours once signed |
| ATO arrears | Banks often decline while tax debt exists | Clearing the tax debt can be the purpose of the loan |
| Irregular income | Servicing tests rely on stable history | Repayment comes from the exit, not monthly income |
| Recent credit issues | Scorecards treat defaults harshly | Considered case by case alongside security |
| Unusual property | Bank policy may exclude it | Assessed on its own merits |
Understanding the cost
Private loans cost more than a standard bank loan over the same period. That is the price of speed, flexibility and a decision based on security instead of a long application. The right way to judge it is the total dollar cost against what the loan achieves: a settled purchase, a tax debt cleared before a penalty, a contract delivered. Because terms are usually measured in months, the dollar figure is often smaller than people fear. Interest can be prepaid or added to the loan, and the bridging cost estimator shows the total from any quote.
Get a private lending quote to compare with no obligation.
How to choose a private lender
Not all private lenders operate the same way. Before you commit, check:
- who the lender is and whether their documents identify the entity clearly
- that every cost, including establishment, legal, and any ongoing or exit fees, is set out in writing
- what happens if the exit runs late, and whether default interest applies
- early repayment terms
- that guarantors receive independent legal advice where it is required
Our guides on private lender red flags and questions to ask before signing go deeper.
An illustrative private loan
Illustrative only. A medical practice owner has agreed to buy the building her practice leases. The bank approves the purchase loan but its settlement conditions include updated accounts that the accountant cannot finalise before the contract date. A private first mortgage settles the purchase on time. Three months later, with the accounts complete, the bank refinance settles and repays the private loan. The practice owner paid for three months of private funding to secure a building she might otherwise have lost to another buyer.
Moving from private to bank finance
For many borrowers a private loan is a stepping stone. It solves the immediate problem, and once the business is ready, a bank or lower-cost lender takes over. Planning that refinance from day one makes it smoother: keep financial statements up to date, lodge tax returns and BAS on time, and keep the private loan in good order. Our guide on preparing your bank refinance while on a private loan lists the steps.
Private lender, broker or bank: who does what?
It helps to know who sits where. A bank lends its depositors’ money under prudential rules and a standardised credit process. A private lender lends private or wholesale capital under its own policy. A broker or arranger matches the borrower with a suitable lender and manages the process. On this site, we arrange property-secured business loans and work the deal through from enquiry to settlement with one team, rather than broadcasting your details to a panel.
Whichever route you take, the same disciplines apply: a clear purpose, honest numbers, a documented exit and every cost in writing. Those four things make any lender’s decision faster.
Is a private loan right for you?
If you have property, a business need and a clear way to repay, a private loan may be the fastest and most practical route. Ask us for a realistic view before you commit to anything. Making an enquiry means no credit check at all, the information you give is not passed to a string of other lenders, and a specialist rather than a call centre gets back to you. Please describe the property, debt and exit as precisely as you can. Speak to us about a private loan.
Frequently asked questions
Is a private lender safe to borrow from?
Many reputable private lenders operate in Australia. Check who the lender is, read every document, get independent legal advice where required and make sure all costs are in writing before signing. Our guide to choosing a private lender lists the warning signs.
Why would I use a private lender instead of a bank?
Usually because of time, policy or flexibility. A bank may take weeks, decline on income grounds or refuse while tax arrears exist. A private lender can decide on the property and the exit.
Do private lenders check credit?
Yes, once you decide to apply. But past credit issues are weighed case by case rather than being an automatic decline. There is no credit check when you first enquire with us.
Are private loans regulated?
Loans made predominantly for business purposes sit under a different regulatory framework from consumer home loans. The loans described on this site are for business purposes only.
How do I exit a private loan?
By selling a property, refinancing to a bank or another lender, or from an incoming payment. When a refinance settles it repays the loan and the security is discharged.
Prefer to start now? Enquire here
About 60 seconds. No credit check when you first enquire, and a secured lending specialist calls you back.