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  • Writer's pictureSteven Feng

What is Private Lending and Why Consider It?

Updated: Oct 15, 2021

Private lending, or peer-to-peer lending, is essentially borrowing money from non-bank creditors, usually private finance or lending companies, without involving of intermediary, such as investment banks.

While banks are the largest secured lenders that offer possibly lowest interest rate in Australia, strict lending criteria need to be satisfied and it will generally take more than a month to get the money. Many transactions rejected by the banks as they failed to meet the criteria, are still considered as creditworthy deals by private lenders.

When banks reject your application or urgent loan is needed, private lending may be a viable solution. Private lenders make more flexible judgements and avoid cumbersome approval process.

Advantages of Private Lending:

  • Easy Access: For private lendings, you will usually deal directly with decision makers and issues can be discussed directly, less paper work.

  • Flexibility: You can customize the loan and negotiate with the lender so it suits your requirements. Private lenders are also more flexible when it comes to security type and credit check.

  • Fast: Private lending works well when you need funds in urgent. Because private lenders are smaller than large banks, funds can be provided within weeks or even days if needed.

Common Purposes of Private Lending:

  • Bridging Loan

  • Renovation

  • Urgent Settlement

  • Business Development

  • Refinance & Second Mortgage

Why Consider Private Lending?

Private loans generally have higher interest rates and shorter loan period compare to bank loans, and you may ask why pay more with private lending?

​Fast turnaround time is the answer in most cases. Private lending is a loan product that serves very specific purposes. It normally takes 6 to 8 months for traditional lenders to approve a loan and if an individual need the money within weeks or days, private landings may be the only solution.

Policies for bank's loan also change from time to time and individuals may therefore fail to get a mortgage that they could before. If the date is close to settlement, private lending also comes in handy.

Why consider KBRZ?

At KBRZ we aim to distinguish ourselves with our speedy quote processing. To help clients enjoy greater profits, we are offering both 1st and 2nd mortgages for clients who need that extra bit of financial freedom. With options for higher LVR's* and highly competitive rates*, we aim to provide unique financial solutions that are tailored for our clients, all done through a fast and minimal hassle process. For brokers, we offer enticing brokerage fees, that are paid out of our competitive management fees, so no extra costs for your clients.

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