Private Lending for Small Business Owners: Complete Guide
How small business owners can use private lending in Australia. Business owners needing capital secured against property. Learn about options, rates, and requirements.
Private Lending for Small Business Owners
Business owners needing capital secured against property. Private lending offers small business owners speed, flexibility, and accessibility that traditional banks often cannot provide.
Why Small Business Owners Choose Private Lending
Speed
Banks take 4-8 weeks to approve loans. Private lenders approve in 24-48 hours and settle in days. For small business owners, this speed can mean the difference between securing an opportunity and missing out.
Flexibility
Private lenders understand the unique needs of small business owners. They can structure deals that banks won't consider, including:
- Higher LVRs for experienced borrowers
- Interest capitalisation during projects
- Flexible repayment structures
- Creative security arrangements
Accessibility
Many small business owners don't fit standard bank criteria:
- Complex or irregular income
- Multiple existing loans
- Credit history issues
- Non-standard property types
Private lenders assess deals individually rather than through rigid automated systems.
Common Scenarios for Small Business Owners
Scenario 1: Urgent Opportunity
You've found a deal that won't wait for bank approval. Private lending provides the speed to act now and refinance later.
Scenario 2: Bank Decline
The bank said no, but you have a solid deal with good security and clear exit. Private lenders focus on these fundamentals.
Scenario 3: Complex Situation
Your income, property type, or circumstances don't fit bank boxes. Private lenders can think outside these constraints.
Typical Terms for Small Business Owners
| Parameter | Typical Range |
|---|---|
| Interest rate | 9% - 15% p.a. |
| LVR | Up to 75% |
| Loan term | 3 - 24 months |
| Establishment fee | 1% - 3% |
| Settlement time | 5 - 10 days |
What Small Business Owners Need to Know
Exit Strategy is Critical
Every private loan needs a clear exit. Common exits include:
- Property sale
- Bank refinance
- Other income source
- Additional security release
Documentation is Simpler
Compared to banks, private lenders require:
- Property details and valuation
- Exit strategy evidence
- Identity verification
- Basic financials (often minimal)
Costs are Higher
Private lending rates exceed bank rates by 3-8%. Ensure the opportunity justifies this cost. For short-term needs, the total cost often remains manageable.
Tips for Small Business Owners
- Know your numbers - Calculate total costs including fees and interest
- Have your exit ready - Document your repayment strategy clearly
- Compare offers - Get multiple quotes to find the best terms
- Use professionals - Experienced brokers and solicitors streamline the process
- Build relationships - Good borrowers get better terms over time
Frequently Asked Questions
How fast can small business owners get approved?
Most private lenders approve within 24-48 hours and can settle within a week.
What if my situation is unusual?
Private lenders assess deals individually. Explain your circumstances and they'll provide tailored feedback.
Can I negotiate rates?
Yes, especially with strong security, low LVR, or repeat business. Always compare multiple offers.
Get Started
Ready to explore private lending options? On Introducr, small business owners can post funding requests and receive competitive offers from verified lenders within 48 hours.
Private lending gives small business owners the tools to act fast and access opportunities that rigid bank processes would otherwise deny.
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