Private Lending in Australia: A Complete Guide for 2026

Private lending continues to grow across Australia in 2026, offering a faster, more flexible solution for borrowers needing funding outside the traditional banking system. Whether you’re a property investor, business owner or developer, understanding how private lending works can help you move quickly when opportunities arise.

In this updated guide, we cover what private lending is, how it works in 2026, and why it’s becoming a go-to finance option across the country.

What Is Private Lending?

Private lending refers to loans funded by non-bank lenders or private investors. These loans are typically secured against real estate and are assessed based on the value of the property and the strength of your exit strategy — not just credit scores or serviceability. In 2026, private lending plays a critical role in:

• Bridging finance for property purchases

• Short-term capital for businesses

• Development funding

• Equity release via first or second mortgages

Why Private Lending Is Booming in 2026

Several key trends are driving demand for private lending in Australia:

• Stricter bank lending rules post-2024 interest rate changes

• Growing property investor activity in metro and regional markets

• More business owners needing fast capital for expansion or cash flow

• Increased refinancing demand for borrowers exiting fixed-term loans

Key Advantages of Private Lending

Private lenders offer unique benefits that traditional banks can’t match:

• Fast turnaround: Some loans settle within 3–5 business days

• Flexible criteria: Income, credit history and documentation are reviewed case-by-case

• Custom loan terms: Loan length, repayment types and structures can be tailored

• Asset-backed lending: Borrowing is based on equity and security value, not income alone

Most Common Private Lending Solutions

1. First Mortgage Loans

A first mortgage is the primary loan secured against a property. Ideal for borrowers needing to:

• Settle quickly on a property

• Refinance out of a bank loan

• Access equity without delays

Explore first mortgage options

2. Second Mortgage Loans

A second mortgage sits behind your existing loan and unlocks property equity without refinancing the first loan. It’s popular with investors and business owners who need short-term capital. Learn more about second mortgages

3. Bridging Loans

Bridging loans are short-term facilities that help you finance the gap between buying and selling property. They’re perfect for auction purchases, urgent settlements or transitional periods.

4. Secured Business Loans

These are business loans secured by real estate, ideal for SMEs needing working capital, asset finance or funding for expansion. View secured business loan options

5. Caveat Loans and Short-Term Lending

For urgent funding where timing is critical, caveat loans and short-term private loans can deliver funds within days. Often used for tax debts, business emergencies or time-sensitive deals.

Who Uses Private Lending in Australia 2026?

Private lending is used by a wide range of borrowers:

• Property investors needing to act quickly in competitive markets

• Developers securing site acquisition or construction finance

• Business owners unlocking equity in commercial or residential property

• Self-employed borrowers without traditional proof of income

• Anyone declined or delayed by a bank

What Do Private Lenders Look For?

Unlike banks, private lenders are focused on:

• The value and location of the property used as security

• The exit strategy (how you’ll repay or refinance)

• Borrower experience or credibility

• Loan-to-Value Ratio (LVR), typically 60–75%

How the Private Lending Process Works

1. Initial assessment – Speak to a private lender or broker about your needs

2. Valuation and review – Lender arranges valuation and reviews supporting docs

3. Conditional offer – You receive indicative terms, including rate and fees

4. Loan docs issued – Legal documents prepared and signed

5. Settlement – Funds released, often within 5–7 business days

Real Case Example: Bridging Finance in Brisbane

In late 2025, a Brisbane-based developer needed $800,000 in bridging finance to secure a townhouse site while their previous project settled. A major bank declined the deal due to timing. Innovate Funding assessed the property, offered a short-term first mortgage, and funded within 6 days allowing the client to retain the site and avoid losing the opportunity.

Pros and Cons of Private Lending

Pros:

• Fast approvals

• Flexible loan terms

• Tailored solutions for complex situations

• Asset-based, not income-based

Cons:

• Higher interest rates than banks

• Shorter loan terms (3–24 months)

• Fees and charges vary by lender

• Requires strong exit strategy

Is Private Lending Right for You?

Private lending isn’t for everyone — but it’s often the right choice when:

• Timing is critical

• Your loan needs don’t fit a bank’s model

• You need funds for a short-term opportunity

• You want fast access to your property’s equity

If you’re unsure, speak to a specialist who can guide you through the options and risks.

FAQs About Private Lending in 2026

What is private lending in Australia?

Private lending is non-bank finance secured by real estate. It offers faster, more flexible access to funds than traditional lenders.

How fast can I get a private loan approved?

Approvals can happen within 24–72 hours, and funds may settle in 3–7 business days.

Are private lenders safe?

Yes, as long as you work with reputable lenders and review the terms carefully with legal advice.

Do private lenders check credit scores?

No, lenders will mainly assess the LVR, purpose and exit strategy.

How do I get started?

Start by contacting a private lending expert who can assess your situation and propose solutions. Contact Innovate Funding

Final Thoughts

Private lending in Australia continues to be a powerful tool in 2026 for borrowers who need flexible, fast, and asset-backed funding. From first and second mortgages to bridging and business loans, private lenders offer solutions that banks simply can’t.

Want tailored advice on your situation? Contact Innovate Funding today and speak with a private lending expert. Book your consultation here