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Private lending has existed for as long as property has. Solicitors once matched clients with money to lend with clients who needed it, secured by mortgage. The modern version is more organised and much larger, but the principle is the same: private capital, lent against real property, on terms agreed for that deal.
Banks, non-banks and private lenders
| Bank | Non-bank | Private lender | |
|---|---|---|---|
| Source of funds | Deposits and wholesale funding | Wholesale and securitisation markets | Private investors, funds, own capital |
| Prudential regulator | APRA | None, but market and ASIC oversight | None, but ASIC and general law apply |
| Assessment | Servicing first | Servicing, with flexibility | Security and exit first |
| Speed | Weeks to months | Weeks | Days to weeks |
| Term | Years | Years | Months to a few years |
| Price | Lowest | Middle | Highest |
What private lenders fund
- Short term needs: settlements, tax debts, working capital gaps, deposits.
- Situations banks decline: incomplete financials, tax arrears, credit blemishes, unusual property.
- Second-ranking loans behind a bank, by second mortgage or caveat.
- Development, construction, land and residual stock.
- Larger first mortgages over commercial property where speed or structure matters.
How they decide
Three questions. What is the property worth and how much is owed on it? What is the money for? How and when will the loan be repaid? Income, credit history and financial statements are considered to varying degrees, but they do not drive the decision the way they do at a bank. This is asset-backed lending in its plainest form.
What it costs
Rates on this site start from 8% p.a. for first mortgages, 0.975% a month for second mortgages and 1.65% a month for caveat loans, with establishment fees from 1.5% to 2.5%. The rates and fees page lists every product. Pricing moves with loan to value ratio, ranking, property type and term.
Who can borrow
Private lenders in this market lend to companies, trusts and business borrowers for business or investment purposes. Most do not hold a credit licence for consumer lending and will not lend for personal, domestic or household purposes. See are private lenders regulated.
When private lending is the wrong tool
When the need is long term and a bank would say yes, given time. When there is no equity. When there is no exit. Private money is a bridge. It works well when both ends of the bridge are in sight.
How Lienhouse fits
Lienhouse takes your enquiry, matches it with a funder suited to the deal and emails you their introduction. Reply to it and the funder contacts you. The steps are on the how it works page.
We match you with a funder and email you their introduction. Reply to it and they’ll be in touch.
Get matched with a funderFAQ
Is a private lender the same as a non-bank lender?
Not quite. Non-bank lenders are larger institutions funded by wholesale markets, with set products and credit policies. Private lenders are smaller, funded by private capital, and assess each loan on its merits.
Where does the money come from?
High net worth individuals, family offices, mortgage funds, contributory mortgage schemes and the lender's own balance sheet.
Are private lenders safe to deal with?
Reputable ones are. Check who you are dealing with, never pay large upfront fees and have your solicitor review the documents. See the separate answer on scams.