Unlocking Growth with Low-Leverage Private Credit in Australia

In Australia's evolving commercial lending landscape, private credit is emerging as one of the most versatile and attractive options for businesses seeking capital. Unlike traditional bank loans, private credit offers flexibility, faster approval times, and tailored financing solutions that better align with the needs of modern enterprises.

For brokers, accountants, and lenders, identifying and targeting low-leverage private credit deals ranging from $50K to $20M can be a game-changer. These transactions carry reduced risk while still delivering strong returns, making them highly sought after in today’s market.

This article explores the benefits of low-leverage private credit, strategies to source these opportunities, and how Innovate Funding can position itself as a leader in this growing niche.

Understanding Low-Leverage Private Credit

At its core, private credit refers to non-bank financing provided by private lenders to businesses or individuals. Within this category, low-leverage private credit focuses on loans with a relatively low debt-to-equity ratio.

This means borrowers contribute more equity relative to the debt they take on, lowering the lender’s exposure and improving loan security. For borrowers, it means retaining more ownership and control while still accessing capital to grow their business.

For example, a business with a property valued at $2M might only borrow $600K, representing a conservative 30% loan-to-value ratio (LVR). The lender’s position is secure, while the borrower enjoys competitive terms and quick access to funds.

Benefits of Low-Leverage Private Credit

Low-leverage private credit offers clear advantages for both lenders and borrowers:

1. Reduced Risk Profile

By lending against strong equity positions, lenders minimise the likelihood of default. This makes low-leverage deals a safer bet compared to high-LVR loans.

2. Flexible Loan Structuring

Private credit doesn’t follow the rigid frameworks of banks. Loans can be tailored to specific business needs — whether that’s interest-only terms, bullet repayments, or flexible drawdowns.

3. Speed of Approval

In private credit, speed is often the biggest differentiator. Many deals can be assessed and approved in a matter of days, compared to the weeks or months typical of banks.

4. Bespoke Solutions

Every business is unique. Private credit allows lenders like Innovate Funding to design solutions for acquisitions, working capital, refinancing, or development — without a one-size-fits-all approach.

5. Stronger Client Relationships

Because private credit is more personalised, borrowers and intermediaries (brokers, accountants) often develop stronger, longer-term relationships with lenders who deliver consistently.

The Australian Private Credit Landscape

Australia’s private credit market has grown significantly in the past decade, driven by several factors:

• Stricter bank lending policies have pushed borrowers to look for alternatives.

• SMEs and property developers increasingly seek fast, flexible finance.

• Institutional investors are allocating more capital into private credit, seeing it as a defensive yet profitable asset class.

This trend shows no signs of slowing. According to market analysts, private credit could account for over $50 billion in lending activity in Australia by 2030, making it one of the fastest-growing segments in finance.

Strategies for Identifying Low-Leverage Private Credit Deals

Finding the right deals requires more than waiting for opportunities to come through the door. Innovate Funding and its partners can leverage several strategies:

1. Build Strong Professional Networks

Brokers, accountants, financial planners, and solicitors often have first-hand access to clients seeking finance. Building referral networks ensures a steady pipeline of opportunities.

2. Attend Industry Events

Commercial lending expos, property conferences, and investment forums provide excellent access to potential borrowers in need of private credit.

3. Leverage Online Platforms

Several online deal platforms and private credit marketplaces now list financing opportunities. Subscribing to industry databases can help identify viable low-leverage prospects.

4. Direct Outreach

Target industries with strong growth potential — such as renewable energy, logistics, technology, and healthcare — and engage with businesses that may benefit from private credit funding.

5. Use Data and Analytics

Private credit is becoming more data-driven. By analysing property values, cashflow trends, and industry benchmarks, Innovate Funding can proactively identify low-risk, low-leverage borrowers.

Positioning Innovate Funding for Leadership

To lead in this space, Innovate Funding can adopt several key approaches:

• Thought Leadership – Publishing case studies, blogs, and market insights on private credit.

• Tailored Product Design – Offering products that adapt to unique business circumstances.

• Rigorous Due Diligence – Ensuring only the strongest low-leverage deals are funded.

• Speed and Service – Prioritising fast settlements and personalised support.

• Digital Marketing & SEO – Targeting high-intent keywords like “private credit Australia” or “low-leverage private credit” to capture search traffic.

Case Studies: Real-World Success in Private Credit

Case Study 1: Technology Business Expansion

A mid-sized technology firm required $1M to scale operations. Banks declined the deal due to fluctuating earnings. Innovate Funding provided a low-leverage private credit loan secured against commercial property, approved in under two weeks. The business grew revenues by 30% within 12 months.

Case Study 2: Healthcare Acquisition

A medical group sought $2.5M to acquire a smaller practice. With significant equity already in its property portfolio, Innovate Funding structured a 60% LVR facility, enabling swift completion of the acquisition and immediate revenue growth.

Case Study 3: Property Developer Bridging Loan

A developer required short-term funds to secure land while waiting for presales. Traditional lenders were too slow. Innovate Funding delivered a bridging loan secured at 55% LVR, allowing the project to move ahead without delays.

Risks and Considerations

While private credit offers clear benefits, both lenders and borrowers must remain cautious:

• Interest Rates – Private credit typically comes at higher rates than bank loans.

• Exit Strategy – Borrowers need a clear plan for repayment, refinancing, or project completion.

• Market Conditions – Property values and cashflows can fluctuate, impacting risk exposure.

By focusing on low-leverage private credit deals, Innovate Funding can mitigate many of these risks while still achieving strong outcomes.

Frequently Asked Questions (FAQs)

1. What is private credit?

Private credit refers to loans provided by non-bank lenders, offering more flexible and faster financing compared to traditional banks.

2. What makes low-leverage private credit attractive?

Low-leverage deals minimise risk for lenders, while giving borrowers better terms and faster access to capital.

3. Who benefits most from private credit in Australia?

SMEs, property developers, and businesses needing quick, tailored finance are the biggest beneficiaries.

4. How quickly can a private credit loan be approved?

Many deals can be assessed and funded within 3–10 business days, depending on the complexity.

5. Why choose Innovate Funding for private credit?

We focus on custom solutions, fast service, and low-leverage opportunities that deliver real outcomes for clients.

Conclusion

As banks continue to tighten lending standards, private credit is stepping up to fill the gap in Australia’s finance market. By focusing on low-leverage deals, Innovate Funding can reduce risk, enhance client outcomes, and cement its position as a trusted leader in this rapidly expanding sector.

With the right strategies in networking, due diligence, and market positioning, Innovate Funding has the opportunity to dominate the private credit space delivering growth not just for itself, but for the many Australian businesses it helps fund. To get indicative rates on your next deal submit your scenario.