What Is Private Lending? A Practical Guide for Australian Borrowers

What Is Private Lending?

Private lending is finance provided outside the traditional bank-lending process.

Rather than relying solely on standardised lending criteria, private lenders assess the individual transaction, the property offered as security, the purpose of the loan, the requested term, and the proposed repayment plan.

For Zantor Capital borrowers, private lending generally means a short-term loan secured against suitable property.

This may be useful when:

• Funding is required quickly

• A bank application is taking too long

• The transaction is more complex than a standard bank loan

• A borrower needs to refinance an existing facility

• Additional capital is required for a project

• A time-sensitive commercial opportunity has arisen

Private lending is not the right solution for every scenario. However, it can provide a valuable option when the borrower has suitable property security and a clear pathway for repaying the loan.

How Is Private Lending Different from Bank Finance?

Traditional banks usually work within strict lending policies, detailed documentation requirements, and established approval processes.

This approach can suit borrowers with straightforward circumstances and flexible timelines.

However, not every funding requirement fits neatly within a traditional bank process.

Private lending may offer a more commercially practical assessment by focusing on the overall transaction rather than relying on a one-size-fits-all approach.

The key factors generally include:

• The value and location of the property security

• The amount required

• The purpose of the loan

• The requested timeframe

• The borrower’s circumstances

• The proposed exit strategy

A private loan may still require valuations, legal documentation, and due diligence. The difference is that the assessment process can be more focused on the specific opportunity.

What Can Private Lending Be Used For?

Private lending may support a wide range of property, business, and commercial requirements.

Common uses include:

• Property purchases

• Urgent settlements

• Refinancing existing loans

• Bridging finance

• Business capital

• Commercial opportunities

• Debt consolidation

• Construction-related costs

• Development funding gaps

• Releasing equity from property

The right structure will depend on the purpose of the loan and the available property security.

Types of Private Lending

Private lending is not a single loan product. Different structures may suit different scenarios.

First Mortgage Loans

A first mortgage loan is secured against property, with the lender holding the primary registered mortgage.

This type of finance may be suitable for property purchases, refinancing, business capital, urgent settlements, or commercial opportunities.

Second Mortgage Loans

A second mortgage loan sits behind an existing first mortgage.

It may allow an eligible borrower to access available equity without replacing the existing first mortgage facility.

Construction Loans

Construction loans may help fund residential, commercial, or development-related projects.

Depending on the structure, funding may support new construction, project completion, renovations, cost overruns, or refinancing an existing construction facility.

Commercial Loans

Commercial loans may be used for business or investment purposes, including commercial property purchases, refinancing, business expansion, working capital, or releasing equity from property.

Emergency Funding

Emergency funding is designed for scenarios where timing matters.

It may be suitable for urgent settlements, refinance pressure, unexpected funding gaps, construction delays, or other time-sensitive requirements.

Short-Term Finance

Short-term finance may provide a practical solution when a borrower needs funding for a defined period.

It is commonly considered when a borrower is preparing to refinance, complete a project, sell a property, or receive funds from another transaction.

Mezz Funding

Mezz funding may help bridge a gap between an existing senior lending facility and the total capital required for a property project.

It may be relevant for developers or investors seeking additional funding for project completion, construction costs, or time-sensitive opportunities.

Other Private Lending Scenarios

Not every requirement fits neatly into a standard category.

Zantor Capital also considers other property-secured private lending scenarios where there is a clear funding requirement, suitable security, and a practical exit strategy.

What Property Can Be Used as Security?

Private lending is generally structured around suitable property security.

Depending on the scenario, this may include:

• Residential property

• Commercial property

• Industrial property

• Development sites

• Partially completed projects

• Investment property

The property type, value, location, existing debt, and overall transaction will be considered during the assessment process.

Why Is an Exit Strategy Important?

An exit strategy is the borrower’s plan for repaying the private loan at the end of the agreed term.

A clear exit strategy is one of the most important parts of a private lending application.

Depending on the transaction, the exit strategy may involve:

• Refinancing with a bank or another lender

• Selling the secured property

• Completing and selling a development

• Moving to a longer-term lending facility

• Receiving funds from another transaction

• Using business revenue or asset sales

The exit strategy should be realistic, clearly explained, and aligned with the requested loan term.

What Information Should You Prepare?

Providing clear information early can help the lender assess the scenario efficiently.

Before submitting an enquiry, prepare the following details:

• The amount required

• The purpose of the loan

• The property offered as security

• The estimated property value

• Any existing mortgage balance

• The preferred settlement date

• The requested loan term

• The proposed exit strategy

• Any relevant project or transaction details

For construction or development scenarios, it may also help to provide the project stage, construction budget, expected completion date, and any existing lending facilities.

How Does the Process Work?

1. Submit Your Enquiry

Tell us the loan amount, property security, loan purpose, and required timeframe.

2. Initial Assessment

We review the scenario and determine whether it fits our lending criteria.

3. Indicative Terms

Where suitable, we outline the proposed structure and the next steps.

4. Due Diligence and Settlement

Once the required checks and documentation are completed, the loan can proceed.

Is Private Lending Right for Your Situation?

Private lending may be worth considering when suitable property security is available and timing, flexibility, or complexity makes traditional bank finance less suitable.

The best way to understand the available options is to submit the key details of your scenario for an initial assessment.

Explore our private lending services or contact Zantor Capital to discuss your funding requirements.

Frequently Asked Questions

How quickly can private lending be arranged?

The timeframe depends on the property security, loan structure, complexity of the transaction, and how quickly the required information can be provided.

Do I need property security?

Zantor Capital’s private lending solutions are property-secured. The property type, value, location, and existing debt will be considered during the assessment.

Can I apply if the bank has declined my loan?

Yes. A bank decline does not automatically prevent you from obtaining private finance. Each scenario is assessed individually.

What loan amounts are available?

Zantor Capital provides private lending solutions from $500,000 to $5 million, subject to assessment.

Can private lending be used for business purposes?

Yes. Depending on the scenario, private lending may support business capital, refinancing, commercial opportunities, bridging requirements, or property-related transactions.

Do you work with finance brokers?

Yes. Zantor Capital welcomes enquiries from brokers seeking practical private lending solutions for their clients across Australia.

First Mortgage
Second Mortgage
Construction Loans
Commercial Loans
Emergency Funding
Short-Term Finance
Mezz Funding
All Other Private Lending