Private lending involves loans provided directly by individuals, investors, or organisations to borrowers, bypassing traditional banking institutions. It serves as an alternative financing option, offering borrowers access to funds outside the conventional banking system.
Types of loans offered include:
• Caveat loans
• Construction loans
• Refinance (1st and 2nd mortgage)
• Second mortgage
• Tax debt
• Urgent property settlement
• Financial separation
• Bridging
• Investment opportunities
• Business start-up
• Working capital
Security and servicing are typically asset-based only, covering a spectrum of property types including rural, residential, commercial, industrial, retail, and specialised properties. Loan terms generally range from 3 to 24 months.
In Australia, private funding often comes with higher interest rates compared to traditional lenders. This reflects the increased risk that private lenders take on by lending to borrowers with credit challenges or limited financial history. Private lenders also offer flexible fee structures, tailored to the specific terms of the loan agreement. Unlike traditional lenders who may impose application fees, ongoing account fees, or early repayment fees, private lenders usually adopt a more personalised fee approach.
It’s essential for borrowers to carefully review and negotiate the terms, rates, and fees with private lenders to fully understand the financial implications and make informed decisions. Rates and fees associated with private funding can vary significantly based on factors such as the lender’s policies, the borrower’s risk profile, loan amount, and other considerations.
At PLS, we are committed to finding the best solutions for our customers. We achieve this by comparing different private funding options, enabling borrowers to find the most suitable and cost-effective solution for their specific financial needs.