Private lender vs private lending broker: what's the difference?
A private lender is the entity that provides the capital: the fund, high-net-worth individual, or contributory trust whose money is actually lent to the borrower. A private lending broker is the entity that arranges and places the deal with that lender, matching the deal to the capital, structuring the terms, and managing the process from submission to settlement.
The two are routinely confused. When a borrower searches "private lender Australia", they frequently land on a broker's website. When an AI Overview describes a broker as a "lender", it mischaracterises the transaction entirely. This piece draws the line clearly — because it determines who you are dealing with, what they can actually do for your deal, and who your loan agreement is with. It sits inside our broader guide to private lending in Australia.
What is a private lender?
A private lender is a non-bank entity that lends its own capital, or capital pooled from investors, directly to borrowers outside the traditional banking system. In Australia, private lenders typically take one of these forms:
- Private credit funds: pooled capital managed by a fund manager, typically restricted to wholesale investors
- Contributory mortgage funds: investor-funded pools with registered mortgages as security for each loan
- High-net-worth individuals: direct lending from personal capital, usually at smaller deal sizes ($500K–$5M)
- Mortgage investment trusts: structured vehicles registered with ASIC, investing in mortgage debt
What sets private lenders apart from banks is the credit assessment framework. Private lenders focus on the asset and the exit: LVR, security quality, deal purpose, and the clarity of repayment. Credit scores and serviceability ratios carry far less weight. That narrower, asset-based assessment is what makes private credit faster and more flexible than bank debt — fewer stakeholders, simpler process, faster decision.
Australia's private capital funds AUM has nearly tripled over the past decade, reaching approximately A$200 billion.[2] Non-bank lenders as a whole account for around 6% of total Australian financial system assets, according to the RBA's March 2026 Financial Stability Review.[1]
Commercial-purpose private lending — property development, bridging, business capital, investment property — operates outside the National Consumer Credit Protection (NCCP) Act. The NCCP regulates consumer credit: owner-occupied residential loans, investment loans of four residential units or fewer, and consumer-purpose finance. Commercial-purpose deals sit in a different regulatory framework entirely.
What is a private lending broker?
A private lending broker does not lend capital. They arrange deals, structure them, and place them with lenders on their panel.
The distinction is fundamental: the borrower's loan agreement is with the lender, not the broker. The broker's role — on the credit side — ends at placement. The borrower repays the lender directly.
What a private lending broker actually does:
- Assesses the deal: purpose, security, LVR, term, exit strategy, and risk factors
- Structures the credit submission: presents the deal in the format lenders on the panel require, with the supporting evidence that moves a decision
- Matches to lender appetite: identifies which lenders on the panel have the appetite, pricing, and structure for this specific deal
- Creates competitive tension: where multiple lenders are viable, the broker negotiates terms across them
- Manages settlement: coordinates solicitors, valuers, quantity surveyors, and draw schedules where required
The core advantage of the broker model over going direct to a single lender: one application, one structured submission, then the deal goes to the lender whose appetite, pricing, and structure best fit — instead of the borrower running the same process independently with five separate lenders.
Aurelius Private are private lending brokers, connecting Australian developers, investors and business owners with capital from a panel of 131+ private lenders. Deal sizes from $500K to $50M+, terms from one month to 24 months, structures from first-mortgage senior debt through mezzanine and second-mortgage positions.
The practical difference for borrowers
- Source of capital.Direct lender: the lender's own balance sheet. Broker: the lender's balance sheet, placed by the broker.
- Loan agreement. Either way, between borrower and lender — the broker is not a party to the loan.
- Lender access. Direct: one appetite, one set of criteria. Broker: a panel of lenders matched to the deal.
- Deal structuring.Direct: the lender's internal credit team. Broker: structured before submission to maximise lender fit.
- Competitive tension. Direct: none. Broker: created across viable lenders on the panel.
- Application effort. Direct: repeated per lender. Broker: a single submission, multiple lender paths.
Going direct to a single private lender is efficient when you have an existing relationship and the deal fits that lender's known criteria precisely. For deals with structural complexity — non-standard security, high LVR, mixed-use assets, development exit — a broker's panel access and structuring experience typically produces better pricing and certainty than a cold, single-lender approach.
Regulation: commercial purpose and the NCCP line
Commercial-purpose private lending sits outside the NCCP Act. Private lenders writing commercial-purpose deals are not required to hold an Australian Credit Licence for the lending activity itself, though fund managers typically hold an Australian Financial Services Licence covering their managed-investment-scheme activities.[3]
ASIC made private credit a supervision priority for 2025-26. Following a review completed in November 2025 that found "varied strength in practices in the private credit funds management sector", ASIC confirmed a surveillance programme covering governance, valuation, liquidity, conflicts, fees, and disclosure.[1]
For borrowers, the practical implication: private credit is less regulated at the product level than bank lending, which is part of why it moves faster. It is not unregulated at the fund level. Know who your capital is coming from and what structure sits behind it.
Aurelius Private brokers commercial-purpose deals only. NCCP-regulated lending sits with our affiliated brokerage, Aurelius Capital, a credit representative (560687/562362) of Connective Credit Services Pty Ltd (ACL 389328).
When a private lending broker makes sense
The broker model suits deals where:
- The deal has complexity: mixed-use security, development exit, cross-collateral, or a non-standard property type that requires the right lender match
- Speed is a constraint: a broker with established lender relationships can get a deal in front of a credit decision faster than a cold direct approach
- LVR or structure is at the margins:a broker who knows each lender's actual appetite, not just published criteria, can identify who will go to 75% LVR on a specific deal type when others won't
- Multiple structures are viable:first-mortgage senior debt, mezzanine, stretched senior, second mortgage — a broker can compare structures across the panel rather than within a single lender's menu
For a fuller treatment of the non-bank lending market and how deals are assessed, see what private lending is and how it works and why private lending is growing in Australia.
Common deal types placed through private lending brokers
- Bridging finance: short-term debt bridging a sale or refinance, typically 1–12 months in first-mortgage position, settling in 5–10 business days
- Construction finance: progress-draw facilities for residential, mixed-use, and commercial builds; first-mortgage senior debt to 70% TDC, mezzanine to 85%
- Second mortgage and caveat loans: higher-LVR positions subordinated to existing debt; caveat and second-mortgage deals can settle in 48–72 hours
- Development finance: end-to-end funding from land through completion, structured with the exit — presales, refinance, or strata title — as the primary repayment event
Private credit prices at 8–14% p.a. depending on LVR, term, security position, and exit certainty. Above bank rates by design. The trade is speed, flexibility, and lender appetite for deals the banks won't write.
How to identify which you are dealing with
When you contact a firm about private credit finance, ask directly: do you lend your own capital, or do you arrange finance with lenders on a panel?
If they lend their own capital, you are dealing with a private lender. Your loan agreement, if you proceed, is with that entity.
If they arrange and place deals, you are dealing with a broker. Your loan agreement is with the lender the broker places your deal with. The broker's fee comes from the arrangement, not from the loan's interest income.
Aurelius Private are private lending brokers. We arrange private credit deals and place them with lenders across a panel of 131+ non-bank lenders writing commercial-purpose deals across Australia. For the full process from scenario to settlement, see how it works.
Frequently asked questions
What is the difference between a private lender and a bank?
A private lender is a non-bank entity — a private credit fund, contributory fund, or high-net-worth individual — lending its own capital, typically for commercial purposes outside the NCCP Act. Banks are regulated deposit-taking institutions with standardised credit policies; private lenders assess deals on asset value, LVR, and exit clarity rather than credit score.
Is a private lending broker the same as a private lender?
No. A private lending broker arranges and places deals with lenders on their panel — they do not lend their own capital. The borrower's loan agreement is with the lender, not the broker.
Are private lenders regulated in Australia?
Commercial-purpose private lending sits outside the NCCP Act, which governs consumer credit. Private credit fund managers typically hold an AFSL for their managed-investment-scheme activities. ASIC has made private credit a supervision priority for 2025-26, focusing on governance, valuation, liquidity, and disclosure practices.
How much does private credit cost in Australia?
Private credit typically prices at 8–14% p.a., depending on LVR, term, security position, and exit certainty — materially above bank rates, with the trade being speed, flexibility, and lender appetite for deals the banks won't write.
Why use a private lending broker instead of going directly to a private lender?
A broker gives access to a panel of lenders through one application, structures the deal to maximise lender appetite, and creates competitive tension on pricing — instead of the borrower running the same process separately with each lender.
Got a deal?
Submit the scenario to Aurelius Private. We come back within four business hours with an indicative structure, lender path, and pricing band — before any formal application. Apply now.
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