Say goodbye to the Banks. Say hello to Private Lending (and why you should consider it)
As we enter a period of uncertainty and the threat of an economic downturn, traditional lenders such as banks are tightening their purse strings and increasing requirements. In such times, private lending may be the perfect alternative for you. Read on to discover why private lending is a viable and advantageous option.
The ins and outs of private lending
With the threat of an economic downturn looming and skyrocketing property prices, traditional lenders have tightened their lending requirements and have reduced their appetite for commercial finance credit. As a result, many borrowers may need to find viable and safe lending options. There are safe, transparent, and viable lending options available.
What is private money lending?
Private money lending involves borrowing money from non-traditional lenders like individuals or companies. Private mortgage lending, on the other hand, refers to borrowing money for a mortgage from a private lending source. Private mortgage lending operates similarly to a traditional mortgage, with the borrower signing an agreement to repay the loan with interest within a specified time period, using the purchased property as collateral.
The benefits and risks of private lending vary depending on the chosen lender. However, with the right structures in place, private lending can be a safe and transparent option for your next project, home, or commercial endeavour.
Why consider private lending?
Unlike traditional lenders who have strict ‘one-box fits all’ lending parameters, private lenders have the freedom to set their loan requirements and checkpoints based on the solutions they are providing. Before selecting a private lender, it is essential to conduct due diligence to ensure their safety and transparency.
The benefits of private mortgage and commercial loans
Private lending for property or commercial projects offers greater flexibility and accessibility than traditional lenders. Some key benefits include:
Private lenders can tailor loans to accommodate the unique credit histories or borrowers’ financial circumstances.
Private lenders can offer faster approval processes than traditional lenders as they have streamlined processes and are less bound by the regulatory requirements of conventional lenders.
- Greater accessibility
Private lenders are often able to supply loans to individuals or organisations who do not meet the stringent requirements of traditional lenders. Making it possible, for example, for asset-rich individuals with limited cash flow to secure a loan.
- Creative financing options and exit strategies
Private lenders can offer personalised financing options such as interest-only loans, bridge loans, or flexible repayment schedules. They can also provide a range of flexible exit strategies based on the borrower’s needs and unique circumstances.
- Personalised service
Private lenders, often smaller institutions, can offer their clients next-level personalised service and support, including a more hands-on approach to the mortgage process.
- Diverse loan and investment opportunities
Private lenders often create diverse loan and investment opportunities that are otherwise unavailable through traditional channels, including offering loans for unconventional or specialised projects and attractive, diverse portfolios for investors.
A comparison: Private lending vs traditional lending
|Private lenders||Traditional lenders|
|Lending requirements||Set their own lending criteria, making loans accessible to people who otherwise would not qualify for a loan.||Regulatory bodies and a low-risk appetite set strict requirements.|
|Creative loan options||Can tailor loans to personal or commercial circumstances requiring more flexibility or options than traditional loans offer.||Loans are very structured and may have strict covenants making it harder for some individuals or companies to get a loan.|
|Terms and conditions||Flexible terms can be negotiated to meet individual or commercial needs and circumstances.||Inflexible and highly structured payment terms make it far easier to default.|
|Payment terms||Can offer a greater variety of payment terms, including shorter terms than traditional loans||Standardised payment terms depending on the type of loan.|
Why choose Australian Securities?
Australian Securities offers you a safe and low-risk private lending environment.
With its origins dating back to 1925, Australian Securities is a private, licensed mortgage securities lender and investment firm. Our dedication to effective oversight helps Australians achieve their financial independence, even in tough times.
When you apply for finance with us, whether it’s for a commercial endeavour or a residential property, you can rest assured you are working with a trusted and experienced player in the private lending market. We specialise in creating loans tailored to your unique circumstances and needs.
- Trusted and Experienced: With Australian Securities, you work with a trusted and experienced player in the private lending market. We specialise in creating tailored loans that suit your unique circumstances and needs.
- Competitive Interest Terms: We offer competitive interest rates, including fixed-rate options for 1 to 3 years with pre-approved client rollovers.
- Flexible Payment Terms: Our borrowers enjoy flexible payment options, including the choice to repay the entire loan or reduce the principal within 30 days of providing notice.
- Transparency: We believe in transparency, ensuring there are no hidden provisos, fees, or charges.
- No Loan Recalls or Business Interruptions: Our loans have no loan recalls, restrictive business covenants, or interruptions.
- Certainty in Loan Applications: We won’t progress a loan application if we’re certain we cannot get it done, and we won’t change your loan requirements mid-term.
Say goodbye to banks
Whether you are looking for a tailored mortgage loan, complex loan, or to refinance your clients, Australian Securities has you covered. Our Finance team will work closely with you to create a loan that meets your needs.
Still not sure…
Call us on 1300 275 275 to talk to one of our Finance Managers or Lending Executives. We prioritise direct communication and personalised support for our clients.
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