All The Private Loans: First and Second Mortgages, Caveat Loans, and Bridging Finance

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In the ever-evolving financial landscape of Australia, private lending has emerged as a powerful force, accounting for an ever-growing percentage of loans provided to businesses. This surge in popularity is largely due to the flexibility, speed, and personalised service that private lenders can offer, making them an attractive alternative to traditional banks. As a leading expert on private lender solutions to the Australian business market, this article will provide an understanding of private lending, including first and second mortgages, caveat loans, and bridging finance for different loan solutions.

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Understanding Private Lending

 

Private lending is a rapidly growing sector in Australia, with private loans now equating to over a quarter of all loans. This growth has been fuelled by the tightening of business lending practices by conservative bank lenders, making bank loans increasingly harder to secure. As a result, many Australian property developers and business owners are turning to private lenders for their financing needs.

Private loan lenders offer a range of finance options, including first and second mortgages, caveat loans, and bridging finance. These loans can be used for a variety of purposes, such as working capital, property development, purchasing land or commercial properties, buying a business, equipment finance, and consolidating multiple business debts.

There are a number of key differences about private loans that make them an attractive alternative to typical loan products.  This includes an application process that doesn’t usually require financials and doesn’t have a credit score.  This means the approval process is faster than a traditional loan provided by a bank and they don’t discriminate against applicants with bad credit who can find themselves locked out of other loan solutions.

Read Next: Keeping Your Head Above Water With Private Lending

First and Second Mortgages

A first mortgage is the primary loan secured against a property. It takes precedence over all other mortgages, meaning that in the event of a default, the first mortgage must be paid off before any other creditors receive payment.

A second mortgage, on the other hand, is a loan that is subordinate to a first mortgage. While it carries more risk for the lender, it can provide borrowers with the ability to access equity in their property without having to refinance their first mortgage.

Caveat Loans

Caveat loans are a type of short-term business loan that can be secured quickly, often within 24 hours. They are typically used for urgent business needs and are secured against a property. The key feature of a caveat loan is its speed, making it an ideal solution for businesses needing quick access to funds.

Bridging Finance

Bridging finance is a short-term loan that helps cover a gap.  That gap could be while waiting for a property to sell or in the case of business lending providing fast funding while you’re waiting for bank credit to settle. This is a valuable tool for property developers and business owners alike, providing the necessary funds to move forward and execute on your opportunities.

Why Choose Private Lending?

Private lending offers a host of benefits over traditional bank loans. The application process is faster and more straightforward, with same-day settlement possible with some lenders. Private lenders also offer personalised service, understanding that each client’s circumstances are unique and tailoring loans to suit individual needs and goals.

Moreover, private lending is becoming increasingly mainstream, with more and more Australians recognising the benefits of non-bank loans. The 2019 Banking Royal Commission’s exposure to the poor conduct of major banks has only served to boost the popularity of private lending as many applicants have become disillusioned by the banks.

Private Lending Solutions Across All Parts of Australia

In a financial landscape where traditional banks are tightening their lending practices, private lending offers fast flexible solutions and personalised alternatives. Whether you’re seeking a first or second mortgage, a caveat loan, or bridging finance, private lenders can provide the solutions you need to achieve your property development or business goals.

Contact us today to learn more about how we can assist you with your financing needs. darkhorsefinancial.com.au offers flexible finance loan solutions for clients all over Australia, including Sydney, Melbourne, Brisbane, the Gold Coast, Adelaide, Perth and even rural locations. If the bank says no talk to an expert and contact us here.

If the bank says no talk to an expert and contact us here.

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