It is, basically, the process of borrowing funds from a non-traditional lender, in most usual cases, a private company or wealthy private individual that has extra cash or equity and who is looking to get a higher return on their excess funds.

Going through the conventional way of accessing funds through a bank takes considerable time and effort with all the paperwork and lengthy process involved. Private lending extends a more straightforward and often quicker process which would not necessarily require the rigourous paperwork banks request for and the hierarchy of corporate governance that causes many delays.

Typically, private loans are asset-backed (particularly, more often than not, with property) as opposed to bank loans, of which their approval in the first place depend largely on your financial history.

We offer commercial loans and development loans from $1M and above. These can either be short-term loans with a duration of 6 months or medium-term loans of up to 18 months.

Our process is pretty straightforward. Here's a bird's eyeview: You apply or register your interest for a loan. Then we do our due diligence with verifying your identity, confirming your eligibility, and doing all the necessary background checks. Once you're approved for a loan and all relevant paperwork is signed, we connect our investors to this opportunity and the loan is activated.

Property Investory has an excellent proven track record in the private lending route since 2020. Not only do we take care of both the investors and the property developers that we work with, but we also have successfully settled and closed property deals with win-win situations that have made both lenders and borrowers happy. It is worth noting that in a span of less than 5 years, we have funded over $35M+ worth of projects.

The interest rate will depend on a number of factors — which includes the type of the length of time taken to pay it back, location, and security. After an initial assessment of an application, a private lender should be able to set a good firm rate based on the relevant information provided.

Remember to be cautious of Indicative Offers that sound too good to be true, because the interest rate is, more often than not, higher when the actual loan offer comes back.

In general, private mortgages can be approved for up to 75% of the underlying security's value. However, an up-to-standard lender will assess every loan application in its entirety and treat it as a unique case, and can thus lend based on the individual or case-by-case circumstances.

There are significant benefits to private lending, of which the most notable are the following:

—Quicker turnaround time of the process

—Flexible repayment alternatives

—More flexible lending terms or criteria

—A broader range of loan options available

—Private lenders look at the property used as security or collaterals so there aren't any lengthy traditional background checks

—The developer and the lender have a direct relationship as they can talk to them about additional refinancing opportunities and/or project delays

Many private lenders use a networks of sophisticated investor to underwrite their loan advances, while other lenders raise funds from retail or wholesale sources that use an Australian Financial Services License (‘AFSL’).

In your own journey as a property investor, you can make finding a good mortgage broker your main priority. A professional mortgage broker can help you to navigate the hundreds of loan packages available, so you find the best one for you. Of course, mortgages aren’t the only form of finance available. You can also work with money partners, such as investors or joint venture partners, to fund your purchase. You must understand all the potential options relevant to your investment.