Quick answer
A private lender is a non-bank lender that funds business loans from its own or investors' capital. Private lenders usually focus on security, the amount relative to the property and a clear exit, rather than the long checklist a bank applies. That's why they can move fast — property-secured amounts of $20,000 to $250,000 are possible the same day, and up to $5,000,000 within 24–48 hours.
Key points
- Non-bank lenders funded by their own or investors' capital.
- Assess security and exit rather than a rigid bank credit box.
- Fast: property-secured same day possible from $20k to $250k.
- Best as a short-to-medium step, with an exit planned.
- Amount
- $20k – $5m
- Focus
- Security and exit
- Credit issues
- Case by case
- Speed
- Same day possible
Why would a business use a private lender?
Usually because a bank can’t do the deal, or can’t do it in time. Banks are built for long-term, low-risk lending at scale. Their processes reflect that: full financials, tax returns up to date, clean credit, standard property, and weeks for assessment. Plenty of good businesses fall outside one of those boxes at some point — a late tax return, an ATO debt, a recent dip, an unusual property, or simply a deadline that’s next Friday.
Private lenders exist for those moments. They look at the deal in front of them and decide.
How do private lenders assess a business loan?
| What they look at | Why it matters |
|---|---|
| The property | Its type, location and what’s already owed on it |
| The amount relative to the property | The cushion protecting the lender |
| The exit | What repays the loan and when |
| The purpose | Business purposes only — and does the money solve the problem? |
| The borrower’s story | Credit issues explained, ATO position, trading context |
Notice what’s lighter: there’s less emphasis on years of tax returns and rigid servicing formulas. That’s where the speed comes from.
How fast are private lenders, really?
With property security, private lenders can work to timelines banks don’t attempt:
- $20,000 to $250,000 — possible the same day
- Up to $5,000,000 — possible within 24–48 hours
These are possibilities, not guarantees. They rely on a clean title, signatories being available and documents ready. The timelines hub explains what each window really involves.
When is a private loan the right step?
Private lending works best as a bridge to something rather than a destination. Strong examples:
- clearing an ATO debt now, then refinancing to a bank once returns are lodged
- buying a business or property on time, with bank finance to follow
- funding a large contract, repaid from the contract
- consolidating short-term debts that are choking cash flow (refinancing expensive debt)
Weak examples: funding ongoing losses with no plan to fix them, or rolling one private loan into another without the underlying problem changing.
An illustrative example
A transport company’s bank declines a refinance because last year’s tax return hasn’t been lodged and there’s an ATO payment plan in place. The business owns its depot. A private first mortgage refinances the bank and releases enough to clear the ATO debt. Over the next year the accountant lodges the outstanding returns, the business shows a clean tax position and the directors refinance back to a bank. (Illustrative only.)
Sound familiar? Start a confidential enquiry.
What should you ask a private lender?
- What’s the total cost of finance in dollars over the planned term?
- Are there fees for early repayment, or for extending?
- Can interest be prepaid or added to the loan, and how does that change the total?
- What happens if my exit is late?
- What security and guarantees are required?
Good private lenders answer these plainly. If you get vague answers, keep asking.
Private lender or second-tier unsecured lender?
If you don’t have property, private secured lending isn’t the lane — unsecured business loans and cash flow loans are. If you do have property and need a larger amount quickly, private secured lending is usually both faster and better value than stacking several unsecured loans.
How to choose a private lender
Private lenders vary widely. Things worth checking:
- Experience with business deals like yours — size, property type, purpose
- Clarity of costs — all fees, interest options and extension terms in writing
- Speed record — can they genuinely move inside your deadline?
- Exit flexibility — what happens if the sale or refinance runs late?
- Communication — will you deal with a person who answers the phone?
This is where a specialist helps. Rather than you approaching several private lenders yourself — each wanting documents and each potentially adding a credit enquiry — one person matches your deal to the lender most likely to fund it on time.
Interest options on private loans
Private loans often offer flexibility on how interest is handled:
- Monthly interest paid from cash flow, like a normal loan
- Prepaid interest, deducted at settlement so there are no monthly payments
- Capitalised interest, added to the loan and repaid at the end with the principal
Prepaid and capitalised options can suit a business whose exit is a single event — a sale or refinance — and whose monthly cash flow is already committed. Each changes the total cost, so compare them in dollars.
Is a private lender regulated?
Business lending has a different regulatory framework from consumer lending, but lenders and borrowers still operate under Australian law, including contract law and, for companies, directors’ duties. Read the loan documents carefully, get legal advice where appropriate, and borrow only for genuine business purposes with a realistic plan to repay.
Ready to skip the bank queue?
If timing or circumstances have put the bank out of reach for now, a private lender can often step in quickly — as long as there’s security and a plan out. Asking doesn’t involve a credit check, and we don’t scatter your details around; a real person looks at your situation and calls you back. Accurate answers about the property, what’s owed and the deadline let us tell you straight away what’s realistic. See if your business qualifies.
Frequently asked questions
What is a private lender?
A lender that isn't a bank. Private lenders fund loans from their own capital or from investors, and set their own lending criteria within the law.
Why are private lenders faster than banks?
They make decisions in-house, look mainly at security and exit, and don't run every deal through long credit committees. With property and clear documents, they can settle in a day or two.
Are private lenders more expensive than banks?
Usually, because they take on deals and timelines banks won't. The right comparison is the cost of the private loan against the cost of missing the opportunity or deadline.
Will a private lender look at bad credit?
Yes, case by case. Many private lenders focus on equity and exit, so past credit issues or ATO debt don't automatically rule a deal out.
How do I get back to a bank later?
Plan it from the start: use the private loan's term to fix whatever stopped the bank — lodge overdue returns, clear the ATO debt, build trading history — then refinance.