Why private lending is growing in Australia (and what it means for borrowers)

What private lending actually is

Private lending is exactly what it sounds like. Instead of borrowing from a bank, you borrow from a private lender — a fund, a high-net-worth individual, or a managed credit vehicle backed by private capital.

The loan is secured against property, just like a bank loan. You get a first or second mortgage, an agreed term, and a clear repayment structure. The difference is who sits on the other side of the table — and how they make decisions.

Banks run your application through a credit policy machine. Tick every box and you get a loan. Miss one and you don't. Private lenders assess the deal on its commercial merits. Security value, exit strategy, borrower track record. They look at the full picture, not just what a scorecard spits out.

Why the banks keep saying no

Australia's major banks have spent the last decade tightening lending criteria. Post-royal commission, post-COVID, and now under APRA's latest macroprudential measures — credit policy has never been more conservative.

That doesn't mean borrowers are riskier. It means the banks have less appetite for anything outside a narrow set of parameters. If your deal is complex, time-sensitive, or doesn't fit the standard template, you'll get declined. Not because it's a bad deal — because the bank's policy doesn't have a box for it.

Self-employed borrowers, property developers mid-project, business owners with lumpy income — these are the profiles banks struggle with. Strong assets, strong cash flow, but messy on paper. Banks see risk. Private lenders see opportunity.

The market has shifted

Five years ago, most borrowers only considered private lending after every bank said no. It was the last resort. That's changed.

More borrowers now come to private lenders first. They've done the maths. A bank process that takes eight to twelve weeks — with no guarantee of approval — can cost more than a slightly higher interest rate on a private loan that settles in days.

Property developers working to tight settlement deadlines can't afford to wait. Business owners chasing acquisition opportunities need capital now, not in three months. The speed and certainty of private lending has become a genuine competitive advantage for borrowers who understand the trade-off.

This isn't about desperation. It's about strategy.

Who private lending is right for

Private lending works best for borrowers who need capital quickly and have strong security to offer. That typically means property developers funding site acquisitions or construction, business owners bridging a cash flow gap or funding growth, investors acting on time-sensitive opportunities, and borrowers who've been declined by banks for policy reasons — not credit reasons.

If you've got equity, a clear exit strategy, and a deal that makes commercial sense, private lending is probably a fit. If you're looking for a 30-year owner-occupied home loan at 6%, it's not.

Speed and flexibility are the real value

The headline advantage of private lending is speed. Most private lenders can assess and approve a deal in 24 to 48 hours. Settlement can happen within days, not months.

But speed is only part of it. Flexibility matters just as much. Private lenders can structure loans around the borrower's actual situation — not force every deal into a standardised product. Capitalised interest, interest-only terms, staged drawdowns for construction — these are standard in private lending. At a bank, they require committee approvals and weeks of back-and-forth.

At Aurelius Private, we work with a panel of lenders across first mortgages, second mortgages, caveat loans, bridging finance, and development funding. That means we match the deal to the right lender — not the other way around. You can see the full range of products we arrange.

What to look for in a private lender

Not all private lenders operate the same way. Before you commit, ask a few questions.

What are the total costs — not just the rate, but establishment fees, legal fees, and exit fees? What's the actual settlement timeframe, and is it realistic for your deal? Does the lender have a track record with your type of transaction? And critically — are you dealing with a principal or a broker who has direct relationships with decision-makers?

Transparency matters. If someone can't give you a clear breakdown of costs and timelines upfront, walk away.

If you're considering private finance

Private lending is growing because it solves a real problem. Banks move slowly and say no to deals that make perfect sense. Private lenders move fast and back deals on their merits.

If you've got a deal that needs capital — or you've been knocked back by a bank and want a second opinion — start a conversation with us. No obligation, no pressure. We'll tell you straight whether private lending is the right fit.