Private Funding Australia

Private funding is finance provided by private or specialist lenders instead of traditional banks. It’s typically structured as a short-term, interest-only facility secured by a registered mortgage over real property. It can suit situations where bank policies don’t fit the purpose, timing or structure of your requirement. PFGA helps you understand whether it may be appropriate for you.

It may suit time-sensitive opportunities, short-term needs such as bridging, or situations where a bank can’t help right now. It’s best used for short-term needs that fill an immediate gap. It’s usually not designed as a long-term solution, so it works best when there’s a clear plan for what happens next. We’ll tell you honestly if a bank or other option might suit you better.

Private funding generally costs more than bank lending. Private rates are typically higher than bank rates, and fees can include establishment fees, legal fees and sometimes exit fees. Costs depend on the lender, the security and the loan-to-value ratio. A responsible private lender should give you a clear indicative term sheet showing the rate, fees, term and conditions before you commit. PFGA compares the total cost of your options, not just the headline rate.

An exit strategy is your plan to repay the funding at the end of the term, for example by refinancing with a bank, selling a property or receiving a settlement. Because private loans are short-term, the viability of the exit strategy is the most important consideration. A clear, realistic plan can strengthen your application. We’ll help you think it through before you apply.

Private funding is usually secured against property. Common structures include a first mortgage, where the lender has first claim on the property, and a second mortgage, where another lender already holds the first. A caveat loan is another short-term option, secured by a caveat placed on a property title. The type of security affects the cost and the risk, so we explain the differences before you decide.

It depends on the lender, the security and how quickly we can gather documents. Private lenders can sometimes move faster than banks, but valuations, legal documents and due diligence still take time. We’ll give you a realistic timeline based on your situation and keep you updated at every stage.

Sometimes. Private lenders evaluate credit issues case by case, with greater weight given to the quality of the security and the viability of the exit strategy. That doesn’t mean approval is guaranteed, and the cost is usually higher. PFGA can tell you early whether your situation is likely to work.

Higher costs, shorter terms and security over your property are the main ones. If you can’t repay or refinance at the end of the term, you may face extra costs, and your property could be at risk. That’s why we recommend you read the terms carefully and get independent legal advice. Engaging a solicitor to review the loan agreement before signing is an important protection, particularly for borrowers new to private lending.

PFGA explains how we’re paid, and any fees that may apply, before you proceed, so there are no surprises. Lender costs such as establishment, valuation and legal fees may also apply, and these will be set out clearly before you commit. To talk through your situation, call us on 1800 574 055 or book an appointment.