How Private Lending Works in Australia
Need fast finance when the banks say no? Private lending could be the solution.
Want to see if private lending is right for you?
Article by: Private Lending Australia, April 12, 2025 10:23am, AEST
What Is Private Lending?
Private lending is a type of finance where non-bank lenders - often individuals, private companies, or investment groups, lend money directly to borrowers.
There are over 1200 private lenders in Australia.
In Australia, private lenders operate under different rules than banks, which means they can offer faster, more flexible, and often short-term loans for people who don’t meet traditional bank lending criteria.
These loans are typically secured, meaning you offer an asset (like your home, commercial property, or land) as collateral. The lender’s main concern is the value of the security, not your credit score or bank statements.
Private lending is commonly used by:
- Business owners who need urgent funding and can’t wait 4–6 weeks for bank approval
- Property investors or developers needing short-term funds to secure a deal, renovate, or refinance
- Borrowers with poor credit or inconsistent income
- People who’ve been knocked back by banks but still have equity to work with
The process is often faster and simpler, with less red tape and more real-world problem-solving.
Why Choose a Private Lender?
Banks can take weeks or months to decide. And if your credit file isn’t perfect or your income is irregular, they often say no.
Private lenders focus more on the value of your security (like your home or commercial property) than your credit score or paperwork.
You may be a good fit if:
- You’ve been declined by a bank
- You need urgent funding
- You're self-employed or have low-doc financials
- You want a short-term loan (3–36 months)
- You have equity in a property
What’s the Catch?
Private loans are shorter-term (up to 3 years generally) and usually have higher interest rates than banks (often starting around 8% at time of writing) - but for many borrowers, the speed and flexibility are more than worth it.
They’re commonly used for:
- Bridging finance
- Business cash flow
- Development funding
- Paying out ATO debts
- Loan consolidation
- Buying property when time is tight
How it works (step-by-step)
Step 1: Initial Enquiry (5–10 mins)
You (or your broker) provide a basic overview of:
- How much you want to borrow
- What the funds will be used for (e.g. business use, refinance, bridging, development)
- What asset(s) you can offer as security (e.g. home, investment property, land)
- Your current situation (e.g. income, loan balances, credit issues, time sensitivity)
🕒 This part can often be done online or over the phone in under 10 minutes.
Step 2: Indicative Offer (Same Day – 24hrs)
Based on the details you give, the lender will issue a conditional or indicative offer. This is a non-binding proposal showing:
- Loan amount
- Interest rate
- Fees (including application, valuation, legal)
- Loan term
- Required security
- Settlement timeline
💬 You can accept, negotiate, or decline this offer - it’s obligation-free.
Step 3: Documentation & Valuation (1–3 days)
If you're happy to proceed, the lender will request:
- ID (driver’s licence or passport)
- Details of your security property (address, title)
- Evidence of property ownership
- Exit strategy (how you’ll repay or refinance the loan)
- Business info or supporting docs (if needed)
- They may also arrange a valuation of the security property, which can take 24–72 hours, depending on the location and type.
🔍 Some lenders accept desktop valuations (no physical inspection), which can speed things up.
Step 4: Loan Approval & Contracts (1–2 days)
Once the valuation comes back and all checks are done, the lender issues formal loan documents via email or a solicitor. You’ll:
- Review and sign the loan agreement
- Provide any final ID or trust/company documents
- Pay upfront costs (if any — sometimes taken from the loan)
Step 5: Settlement & Funds Released (Same Day – 2 Days)
After everything is signed and conditions are met:
The lender settles the loan (often through a solicitor)
Funds are sent to your nominated bank account or used to pay out existing loans directly.
⚡ In urgent cases, this entire process can be completed in as little as 48 hours, though 3–7 days is more common.
Common Questions
Do I need a perfect credit score?
No — private lenders focus more on your security.
Can I use my house or investment property as security?
Yes. Residential, commercial, and rural properties can be accepted. Generally up to 75% of the property value can be loaned.
How fast can I get the money?
If your documents and security are in order, sometimes within 24–72 hours. Though 3-7 days is more common.
How much can I borrow?
Most private lenders do loans from $50,000 up to $5M. We can do higher development finance loans up to $100M.
Want to see if private lending is right for you?
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