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A bank home loan is repaid a little each month for decades. A private loan is different. It typically runs for one to 24 months, interest is often prepaid or capitalised, and the principal is repaid in a single amount at the end. The lender is therefore less interested in monthly income and more interested in one question: what event repays this loan?
The common exits
| Exit | Evidence a lender looks for |
|---|---|
| Sale of the security property | Agency agreement, listing, price guidance that clears the debt, or a signed contract |
| Sale of another asset | The same, for that asset |
| Refinance to a bank or non-bank | A broker’s assessment, pre-approval, or a clear path to eligibility such as lodged financials |
| Completion and sale of a project | Feasibility, build program, presales or market evidence |
| Incoming funds | Contract, invoice, settlement statement, court order or grant of probate |
| Business cash flow | Trading figures that show the debt can be cleared within the term |
What makes an exit credible
- It is specific. “We will refinance” is a hope. “Our 2026 returns are lodged this month and the broker has confirmed we then meet the bank’s policy” is a plan.
- It fits inside the term. A sale that needs a 90 day settlement does not suit a three month loan starting today.
- The numbers work. The sale price or new loan must clear the private loan, the first mortgage and costs.
- It does not depend on things outside your control, or where it does, there is a fallback.
Matching term to exit
Borrow for longer than the exit should take. If the property should sell and settle in four months, a six month term costs a little more in interest and avoids default if the buyer delays. Most private loans can be repaid early. Check whether a minimum interest period applies.
Weak exits
- Refinancing to another private lender with no change in circumstances. Each round costs fees and erodes equity. If you are already in that position, see refinance a private loan.
- A sale at a price the market has not supported.
- A capital raise or investor with nothing in writing.
- Expected business growth with no trading history behind it.
Why lenders care so much
A private lender does not want to enforce. Selling a borrower’s property is slow, costly and bad for reputation. A good exit means the loan repays itself on time and everyone moves on. A missing exit means the lender is really lending against a forced sale, and a responsible one will say no.
If the exit slips
Talk to the lender before the due date. See can a caveat loan be extended and default interest rates for what happens next. The how it works page shows where the exit is assessed in the process.
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Get matched with a funderFAQ
Is a refinance to a bank an acceptable exit?
Yes, if it is realistic. The lender will consider whether the reason a bank would not lend today will be fixed by the end of the term.
What if my exit is delayed?
Tell the lender early. Extensions are often available for a fee where the exit is still on track. Silence followed by a missed repayment date is what leads to default interest.
Can I have more than one exit?
Yes, and it strengthens the application. A primary exit plus a fallback shows the loan can be repaid even if the first plan slips.