Private lending is an increasingly popular form of finance in Australia, particularly for businesses and individuals looking to fund commercial projects, purchase commercial property, or meet other business-related needs. Unlike traditional bank loans, private lending provides a faster and more flexible solution, focusing on the value of the asset offered as security rather than rigid lending criteria like credit scores or financial history.
If you're new to private lending, understanding the process and how to secure this type of funding is crucial. In this guide, we'll break down the steps required to secure private lending in Australia, provide clear insights into what lenders look for, and explain how Innovate Funding can assist you at every stage.

What Is Private Lending for Business?
Private lending is non-bank financing where private lenders or institutions provide funds. The loans are typically secured against a property, which could be residential, commercial, or industrial. Private lenders assess applications based on the strength of the collateral and the borrower's repayment strategy, making this form of lending accessible to those who may not qualify for traditional bank loans.
Private lending is primarily used for business or commercial purposes, including:
Purchasing commercial real estate.
Refinancing existing debt.
Funding property development or construction.
Providing short-term bridging finance for cash flow needs.
Private lending's key advantages are its flexibility and speed. Loans can often be approved and settled within days, making it ideal for time-sensitive opportunities.
Step 1: Identify the Loan Purpose
To secure private lending, you must clearly define the purpose of the loan. In Australia, private lending is typically restricted to business or commercial purposes, so your intended use of the funds must align with these criteria. Common purposes include:
Commercial property purchase: Acquiring a property for business use, such as an office, retail space, or industrial site.
Property development finance: Funding for construction or development projects.
Business growth: Expanding operations, purchasing inventory, or acquiring equipment.
Debt refinancing: Consolidating or restructuring existing loans to improve cash flow.
Bridging finance: Covering short-term funding gaps while awaiting longer-term financing or the sale of an asset.
Clearly defining the loan's purpose is critical, as it forms the foundation of your application. Innovate Funding works with you to ensure your loan purpose is articulated and meets the criteria set by private lenders.
Step 2: Assess Your Financial Position
Although private lenders are more flexible than banks, they still require assurance that the loan will be repaid. Therefore, assessing your financial position is essential in securing private lending.
Key factors to consider include:
Collateral: Private loans are asset-based, meaning you must provide property as security. This could be a commercial property, residential property, or vacant land.
Loan-to-Value Ratio (LVR): Most private lenders offer loans up to 70–80% of the value of the secured property. Knowing the approximate value of your asset will help you determine how much you can borrow.
Repayment strategy: Private lenders emphasise how you plan to repay the loan. This might include future business revenue, the sale of an asset, or refinancing with a traditional lender.
If you're unsure about your financial position or the value of your collateral, Innovate Funding can help. Our team assesses your situation, provides accurate valuations, and helps develop a clear repayment strategy that will appeal to private lenders.
Step 3: Research and Choose a Private Lender
Not all private lenders operate the same way, and it's important to choose one that aligns with your specific needs. Some specialise in property development, while others focus on business loans or short-term finance.
When researching private lenders, consider the following factors:
Loan type: Does the lender offer loans for your intended purpose?
Reputation: Research the lender's track record and customer reviews to ensure you deal with a reputable institution.
Terms and conditions: Compare interest rates, fees, and repayment terms. Due to their flexibility, private loans typically have higher interest rates than traditional loans, so understanding the full cost is essential.
Speed of approval: If your funding need is time-sensitive, ensure the lender offers quick approvals and settlements.
Innovate Funding simplifies this process by connecting you with reputable Australian private lenders. With access to an extensive network of lending partners, we ensure you're matched with a lender that best suits your financial goals.
Step 4: Prepare the Required Documentation
Private lenders require documentation to evaluate your application. While they tend to have fewer requirements than banks, preparing the necessary paperwork will speed up the approval process.
The documents you'll typically need include:
Proof of loan purpose: Contracts, quotes, or invoices outlining why you need the loan.
Details of the collateral: Ownership documents, property valuations, and title deeds.
Business financials: Profit and loss statements, cash flow reports, or other records demonstrating your business's financial health (if applicable).
Repayment plan: A clear strategy showing how you'll repay the loan, including timelines and sources of repayment.
Innovate Funding assists in compiling and organising these documents, ensuring that your application is clear, complete, and ready for submission.
Step 5: Submit Your Loan Application
Once you've chosen a lender and prepared your documentation, the next step is to submit your loan application. Private lenders evaluate applications based on several criteria, including:
The value of the secured property.
The viability of your repayment strategy.
The purpose of the loan and its alignment with business or commercial requirements.
Innovate Funding is your advocate during this process, ensuring your application meets the lender's criteria and negotiating terms on your behalf. Our goal is to maximise your chances of approval while securing the best possible loan terms.
Step 6: Loan Approval and Settlement
Private loans are known for their fast approval times. Once your application is approved, the lender will provide a loan offer detailing the terms, including the interest rate, fees, and repayment schedule.
After reviewing and accepting the terms, the loan moves to the settlement stage. This involves finalising the legal agreements and transferring the funds, which can typically happen within a matter of days.
Innovate Funding oversees the settlement process to ensure everything proceeds smoothly and without delays.
Step 7: Manage Repayments and Exit the Loan
Once your loan is settled, it is important to manage your repayments as agreed. Private loans often have shorter terms than traditional ones, typically 6 months to 3 years.
If your repayment strategy involves an exit plan, such as selling an asset or refinancing, ensure you're prepared to execute it on time. Innovate Funding provides ongoing support to help you manage your loan, develop exit strategies, and secure future funding if needed.
Why Work with Innovate Funding?
Securing private lending can be complex, but it doesn't have to be overwhelming. At Innovate Funding, we simplify the journey by providing:
Expert advice: Clear, actionable guidance on securing private lending.
Lender connections: Access to a network of reputable Australian private lenders.
Streamlined applications: Assistance with documentation and application preparation.
Advocacy: Negotiation and support to ensure the best loan terms for you.
Ongoing support: Help with repayment management and future funding needs.
Final Thoughts
Private lending is a practical and flexible option for Australian businesses and commercial property investors seeking fast access to capital. By following these steps and working with experts like Innovate Funding, you can streamline the process, avoid common pitfalls, and secure the funding you need to achieve your goals.