Private Lending FAQs Australia
Assurity Capital provides property-secured private lending for eligible business, commercial and investment purposes across Australia. This FAQ explains how private loans, first mortgages, second mortgages, bridging finance, refinance and secured business loans work.
Private lending is not suitable for every situation. Each enquiry is assessed on the property security, existing debt, loan purpose, proposed term and a clear exit strategy. Assurity Capital does not provide consumer-purpose personal loans or owner-occupied home loans.
Private Lending Basics
What is private lending?
Private lending is finance provided by a non-bank lender rather than a traditional bank. In property-secured private lending, the loan is secured by real estate and is commonly used by business owners, investors, developers and commercial borrowers when timing, security type, borrower structure or lending policy makes mainstream finance unsuitable.
Private loans are generally structured as short-term funding with a defined repayment plan. Common exits include refinancing, sale of property, sale of another asset, settlement of a transaction or completion and sale of a development.
What is a private lender?
A private lender is a non-bank lender that considers finance outside the major-bank lending model. Private lenders may assess an application with a stronger focus on the security property, total debt position, purpose of funds and proposed exit strategy.
A private lender is not automatically a better or cheaper alternative to a bank. Private finance is usually used where speed, flexibility or a non-standard scenario is more important than obtaining a mainstream long-term loan.
What is the difference between a private lender and a bank?
Banks commonly rely on standardised credit policy, income verification, serviceability calculations, credit history and longer approval processes. A private lender can take a more scenario-based approach to eligible property-secured finance.
For Assurity Capital, the key considerations include the property offered as security, the amount of existing debt, the requested loan amount, the business, investment or commercial purpose, and the borrower’s realistic plan to repay the loan.
Is private lending the same as private credit?
Not always. “Private credit” is a broad term that can describe non-bank lending and private debt investments. “Private lending” in this context refers to property-secured loans arranged for eligible borrowers, rather than an invitation to invest in a private-credit fund.
Is private lending safe?
Private lending involves real financial and property risk. A borrower should understand the interest, fees, repayment obligations, security documents, loan term, default provisions and exit strategy before proceeding.
A loan secured by property may place that property at risk if the borrower cannot meet the loan obligations. Independent legal, accounting and financial advice may be appropriate before entering into any private-lending arrangement.
Is private lending regulated in Australia?
Whether credit legislation applies depends on the borrower, purpose and structure of the loan. The National Credit Code applies to certain consumer credit contracts, including credit provided wholly or predominantly for personal, domestic, household or certain residential investment purposes. Business, commercial and investment structures can require careful legal assessment.
Assurity Capital considers eligible business, commercial and investment-purpose scenarios only. It does not provide consumer-purpose personal loans or owner-occupied home loans. ASIC explains the National Credit Code and when it may apply.
Can I get a private loan for personal expenses?
No. Assurity Capital does not provide private loans for personal, domestic or household expenses.
Eligible enquiries must have a genuine business, commercial or investment purpose and be supported by acceptable Australian real-estate security and a clear exit strategy.
Can I get a private loan for an owner-occupied home?
No. Assurity Capital does not provide consumer-purpose owner-occupied home loans.
Private Mortgage Types
What is a first mortgage private loan?
A first mortgage is a loan secured by a first-ranking registered mortgage over property. The first mortgage lender has priority over other secured lenders in relation to the property.
A first mortgage private loan may be considered for eligible business, investment or commercial purposes, including refinance, urgent settlement funding, development, property acquisition, residual stock finance and working capital.
What is a second mortgage private loan?
A second mortgage is a loan secured by property that already has an existing first mortgage. The existing first mortgage lender ranks first; the second mortgage lender ranks behind it.
A second mortgage can allow an eligible borrower to access property equity without necessarily refinancing or disturbing an existing first mortgage. It may be considered for business cash flow, commercial obligations, investment opportunities, debt consolidation, ATO-related business liabilities or short-term refinance needs.
What is the difference between a first mortgage and a second mortgage?
The difference is mortgage priority.
A first mortgage has first claim over the property security. A second mortgage sits behind the first mortgage and is repaid only after the first mortgage debt has been satisfied. Because the second mortgage lender accepts a different risk position, pricing, leverage, term and approval criteria may differ.
Can I obtain a second mortgage without refinancing my first mortgage?
Potentially. A second mortgage may be considered where there is sufficient equity after allowing for the existing first mortgage and the proposed second mortgage.
The existing lender’s loan terms, the combined debt position, property value, mortgage priority, consent requirements and exit strategy can all affect whether a second mortgage is available.
What is a caveat loan?
A caveat loan is generally a short-term property-secured funding arrangement where a caveat may be lodged on title to protect a lender’s interest. It is not the same as a registered first or second mortgage.
Assurity Capital’s core product range is first and second mortgage private lending. If you need to refinance an existing caveat or private loan, submit the property details, current debt, required payout figure, purpose and exit plan so the appropriate structure can be assessed.
Can Assurity Capital refinance an existing private loan or caveat?
A refinance may be considered for an eligible borrower with an expiring private loan, caveat-related arrangement, second mortgage or other property-secured business or investment debt.
A refinance application needs to demonstrate how the new loan will improve, stabilise or transition the borrower’s position. The exit strategy must be credible; refinancing short-term debt without a sustainable repayment plan may not be appropriate.
Eligibility and Security
Who can apply for private lending?
Assurity Capital considers applications from eligible business owners, property investors, developers, companies, trusts and other commercial borrower structures.
Eligibility depends on the individual scenario. A bank decline, non-standard income, self-employment, impaired credit or an urgent deadline does not automatically prevent private finance, but neither does it guarantee approval.
Do I need property to obtain a private loan?
Yes. Assurity Capital’s private lending is secured by acceptable Australian real estate.
The property may be residential investment property, commercial property, industrial property, land, development property, mixed-use property or another acceptable security type, subject to assessment.
Can I use residential property as security for a business loan?
Potentially, provided the loan purpose is eligible and the security is acceptable. The property security and the purpose of the loan are assessed separately.
The loan must not be for consumer-purpose personal spending or an owner-occupied home loan. Legal and financial advice may be appropriate where business finance is secured by personal or family-held property.
Can commercial property be used as security?
Yes. Assurity Capital may consider eligible commercial, industrial, retail, office, mixed-use and other business or investment property security.
The type, location, marketability, tenancy profile, existing debt and valuation evidence can affect the assessment.
Do you lend on vacant land or development sites?
Eligible vacant-land, development-site and development-related scenarios may be considered where there is acceptable security, clear loan purpose, appropriate project information and a credible exit strategy.
Development finance can involve additional complexity. Borrowers may need to provide plans, approvals, project costs, sales evidence, construction information, existing debt details and the proposed repayment strategy.
What is loan-to-value ratio (LVR)?
LVR means loan-to-value ratio. It compares the total amount of debt secured against a property with the assessed value of that property.
For example, if a property is valued at $1,000,000 and the total secured debt after the proposed loan is $600,000, the combined LVR is 60%.
For a second mortgage, the combined LVR includes both the existing first mortgage and the proposed second mortgage. Acceptable LVR depends on the property, location, mortgage priority, loan purpose, valuation, term and exit strategy.
What is combined LVR?
Combined LVR is the total of all debt secured against the property, divided by the property’s assessed value.
For a second mortgage, it is not enough to look only at the proposed second mortgage amount. The lender must also consider the existing first mortgage, any other registered interests, current payout figures and the value of the security property.
How much can I borrow from Assurity Capital?
Assurity Capital considers property-secured finance from $50,000 to $5,000,000 and above, subject to assessment.
The available amount is not determined by property value alone. It depends on the existing debt, assessed property value, mortgage ranking, purpose, loan term, borrower structure and exit strategy.
Do I need a property valuation?
A valuation may be required depending on the loan amount, property type, location, existing debt, leverage and urgency of the scenario.
A valuation helps assess the property’s market value and the proposed LVR. In some lower-leverage or straightforward situations, another assessment approach may be considered, but this is not guaranteed.
What properties are not suitable security?
Not every property is suitable. Security may be more difficult to assess where there are title issues, poor marketability, significant condition concerns, unusual ownership structures, insufficient equity, unresolved disputes or conflicting registered interests.
The best approach is to submit the property address, title details if available, existing debt position and intended use of funds for an initial assessment.
Do I need perfect credit to qualify for private lending?
No. Private lending does not use exactly the same assessment model as a mainstream bank.
Credit history may still be relevant, but an impaired credit profile or bank decline does not automatically mean an eligible property-secured private loan is unavailable. Assurity Capital considers the full scenario, including security, purpose, existing debt and exit strategy.
Can self-employed borrowers apply?
Yes. Self-employed borrowers may be considered for eligible property-secured business, commercial or investment finance.
Private lending may be relevant where traditional income verification does not reflect the borrower’s current position, but the application must still demonstrate an acceptable purpose, security position and repayment plan.
Can a company or trust apply for private lending?
Yes. Eligible company and trust structures may apply. The required documents will depend on the borrower structure and can include company, trust, trustee, director, guarantor and beneficial-ownership information.
Uses for Private Loans
What can a private loan be used for?
Eligible uses can include:
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Stock, supplier or urgent commercial payments
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Bridging finance for an investment or commercial property transaction
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Refinance of an expiring private loan, caveat or business facility
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Eligible ATO-related business liabilities and creditor payments
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Urgent settlement funding
The proposed use must be genuine, clearly explained and consistent with Assurity Capital’s business, commercial and investment lending scope.
Can I use a private loan for business cash flow?
A property-secured private loan may be considered for short-term business cash flow or working capital where there is acceptable security and a realistic plan to repay the debt.
It may assist with a temporary timing gap, supplier payment, stock purchase, commercial obligation or expansion requirement. It is not a substitute for a sustainable long-term cash-flow strategy.
Can a private loan be used to pay ATO debt?
A property-secured private loan may be considered for genuine business or investment-related ATO obligations where acceptable real-estate security and a clear exit strategy are available.
ATO debt can have serious tax, legal and cash-flow implications. Borrowers should obtain independent tax, legal and accounting advice before proceeding.
Can I use private finance to pay creditors?
A private loan may be considered for urgent business creditor payments, provided the purpose is eligible, the property security is acceptable and the exit strategy is realistic.
The loan should form part of a sensible commercial solution rather than merely delay an unsustainable debt position.
Can I use private lending to buy commercial property?
Potentially. Private lending may be considered for eligible commercial property acquisitions, particularly where settlement timing is urgent, mainstream finance is delayed or a temporary bridge is required before longer-term refinance.
The lender will consider the property, transaction, available equity, borrower structure and proposed exit.
What is bridging finance?
Bridging finance is short-term property-secured funding used to bridge the timing gap between two financial events.
For example, an eligible borrower may need to settle on a commercial or investment property before another property is sold, before bank refinance is complete or before a development milestone is reached. The exit strategy is central and may involve sale, refinance or another defined source of repayment.
Can private lending be used for property development?
Eligible development and development-completion scenarios may be considered where the security, project information, debt position and exit strategy are acceptable.
Development lending is higher complexity than a simple refinance. The assessment may consider planning approvals, build status, cost-to-complete, presales where relevant, existing financiers, residual value and the project’s proposed repayment pathway.
What is residual stock finance?
Residual stock finance is property-secured funding for developers or investors holding completed but unsold residential, commercial or development stock.
It may help release equity or refinance debt while the borrower sells remaining stock or transitions to longer-term finance. A clear sales and exit strategy remains essential.
Can I use a private loan to refinance another business loan?
Potentially. Assurity Capital may consider refinance of eligible business, commercial, investment or private-lending debt secured by property.
A refinance must make commercial sense. The application should explain the debt being repaid, current payout figures, why refinance is required and how the new facility will be repaid at or before term expiry.
Application, Approval and Settlement
What information do I need to provide?
For an initial assessment, provide as much of the following as possible:
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Property address and security type
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Estimated property value
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Existing mortgage balances and payout figures
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Requested loan amount
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Loan purpose
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Borrower entity or ownership structure
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Required settlement date
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Proposed exit strategy
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Relevant supporting documents, contracts, valuations or financial information
Clear information early in the process helps identify whether a scenario may be suitable and what further documents are required.
What is an exit strategy?
An exit strategy is the defined and realistic plan for repaying the private loan at or before the end of the loan term.
Common exits include a property sale, refinance to a bank or non-bank lender, sale of another asset, settlement proceeds, development completion and sale, or another documented source of funds. A private loan should never be entered into without a credible exit plan.
What is the difference between indicative terms and formal approval?
Indicative terms are preliminary terms based on initial information. They are not a binding commitment to lend.
Formal approval occurs only after full assessment and satisfaction of relevant conditions, which may include valuation, legal due diligence, borrower documents, mortgage documents, insurance, existing lender information and other security requirements.
How quickly can Assurity Capital provide indicative terms?
Many eligible scenarios can receive indicative terms within 24 to 48 hours after sufficient information is provided.
Timing depends on the quality of the initial information, property complexity, existing mortgages, valuation requirements, legal matters and the clarity of the exit strategy. Indicative terms are not formal approval.
How quickly can a private loan settle?
Some straightforward private loans can settle in as little as three to five business days, but settlement timeframes are never guaranteed.
Settlement timing depends on security review, valuation requirements, legal documentation, borrower entity documents, mortgage discharges, existing lender requirements, solicitor availability and final approval conditions.
Can a private lender settle an urgent property purchase?
Potentially. Private lending can be useful for eligible urgent settlement scenarios where the security and exit strategy can be assessed quickly.
Submit the contract, settlement date, property details, loan amount, existing debt and exit plan as early as possible. Urgency alone does not replace the need for full legal and security assessment.
What happens during legal documentation?
Once terms are accepted and conditions are satisfied, legal documentation is prepared for the borrower and relevant guarantors to review and sign.
The documents set out the loan amount, term, interest, fees, security, repayment obligations, default provisions and other conditions. Borrowers should obtain independent legal advice before signing.
Will the existing first mortgage lender need to be involved?
For a second mortgage, the existing first mortgage and its payout position must be considered. Depending on the structure and existing lender’s terms, consent, priority arrangements or other documentation may be required.
This can affect timing, so it is important to disclose existing mortgages from the beginning.
Interest, Fees and Repayment
What interest rate will I pay on a private loan?
Private-loan interest rates vary by scenario. They depend on the property security, first or second mortgage position, total LVR, loan amount, term, borrower structure, urgency, loan purpose and exit strategy.
Private finance often costs more than mainstream bank finance because it is commonly short-term, property-secured and structured for scenarios that may not fit standard bank policy. Always review the full cost of the loan, not only the headline interest rate.
What fees apply to private lending?
Fees vary by transaction and may include establishment, legal, valuation, settlement, brokerage, discharge, extension or other transaction-related fees.
The relevant fees should be disclosed in the proposed loan terms and legal documents. Ask for a clear explanation of each fee, when it is payable and whether it is refundable before proceeding.
Can interest be paid monthly?
Whether interest is paid monthly, prepaid, capitalised or otherwise structured depends on the approved transaction and legal documents.
Borrowers should understand how interest is calculated, when it is due and how the chosen structure affects the total amount repayable at the end of the loan term.
What is capitalised interest?
Capitalised interest is interest added to the loan balance rather than paid by the borrower as a separate monthly payment.
It can assist cash flow in some short-term scenarios, but it increases the amount repayable at the end of the loan. It is not available in every transaction and must be assessed and documented.
What happens at the end of a private loan term?
The loan must be repaid, refinanced or otherwise satisfied in accordance with the loan documents.
A borrower should begin working on the exit strategy well before the loan maturity date. Extensions are not automatic and may involve further assessment, fees, legal work and revised terms.
Can I repay a private loan early?
Early repayment rights and any associated fees depend on the loan terms and legal documents.
Ask before proceeding whether there is a minimum term, notice requirement, discharge fee or early-repayment cost.
Risks and Important Considerations
What happens if I cannot repay the loan?
If a borrower cannot meet the loan obligations, the lender may enforce its rights under the loan and security documents. This can include default interest, enforcement costs and action against secured property, subject to the relevant legal process and documents.
If you believe repayment will be difficult, seek legal, accounting and financial advice immediately. Do not wait until the loan expires.
Can I lose my property with a private loan?
A property used as security may be at risk if the borrower defaults and the debt is not resolved. This is why private lending should only be used where the borrower fully understands the obligations and has a realistic exit strategy.
Independent legal advice is strongly recommended before signing loan and mortgage documents.
Is a private loan suitable for long-term debt?
Private lending is usually designed for short-term or transitional funding, rather than as a permanent replacement for lower-cost long-term finance.
It may be useful while a borrower completes a sale, refinance, development, restructuring or other clearly defined event. The long-term funding plan should be considered before entering into the loan.
Should I get legal or accounting advice?
Yes, where appropriate. A solicitor can explain the legal documents, mortgage security, guarantees, default provisions and property risks. An accountant or tax adviser can help assess the business, tax and cash-flow implications.
Assurity Capital provides general information and assesses lending scenarios. It does not provide legal, tax or personal financial advice.
Working With Assurity Capital
Does Assurity Capital lend Australia-wide?
Yes. Assurity Capital considers eligible property-secured business, commercial and investment lending scenarios across Australia.
Does Assurity Capital provide unsecured business loans?
No. Assurity Capital’s core lending is secured by acceptable Australian real estate.
Can mortgage brokers refer a client?
Yes. Mortgage and finance brokers can submit a scenario with the property details, loan amount, purpose, existing debt, required timing and proposed exit strategy.
Can accountants and lawyers refer clients?
Yes. Accountants and lawyers may refer eligible business, commercial or investment clients where property-secured private finance may assist with a transaction, refinance, ATO-related business liability, creditor matter, settlement or restructuring need.
How do I submit a private-lending enquiry?
Call 02 9389 1077 or email scenario@assuritycapital.com.au.
Include the property address, requested loan amount, purpose, existing mortgages or debts, required settlement date and exit strategy. Assurity Capital will assess whether the scenario may fit its lending criteria.
General information only. Finance is subject to assessment, acceptable security, genuine business, commercial or investment purpose, lender criteria, fees, legal documentation and approval. Terms, rates, fees, loan amounts and settlement timeframes vary by transaction.
Assurity Capital does not provide personal loans or consumer-purpose owner-occupied home loans.