1. The security
What is the asset, where is it, and how quickly could it be sold? Metropolitan residential and standard commercial property is straightforward. Specialised assets — service stations, childcare, rural holdings, vacant land — take longer to sell and attract lower LVRs. Title is searched, encumbrances identified and an independent valuation instructed from the lender's panel.
2. The equity buffer
The lender calculates LVR on total debt, using the loan balance at the end of the term if interest is capitalised. It then stress-tests that: if the property sold in a soft market with selling costs and enforcement expenses, is the debt still covered? The answer to that question decides both approval and price.
3. The exit
How does the lender get its money back, and when? Ranked from strongest to weakest: an exchanged unconditional sale contract; a formal refinance approval; contracted receivables; pre-sales; an agent's appraisal on a listed property; and an intention to sell. Vague exits are the single most common reason a private deal is declined.
4. The sponsor
Who is borrowing, what have they completed before, and are they credible? Track record matters most on construction and development transactions. Credit history, current litigation, ATO positions and other lender relationships are checked — not to find perfection, but to make sure the story is consistent and disclosed.
5. Purpose and structure
The loan must be for business or investment purposes. The borrowing entity's power to borrow and grant security is confirmed, guarantors identified, and the facility structured — ranking, term, interest treatment, drawdown mechanics and conditions precedent.
What makes a deal fast
Complete information provided up front: full property details, an accurate debt position, a clear purpose, an evidenced exit, entity and ownership detail, and honest disclosure of anything adverse. Surprises found in diligence cost more time than the same facts disclosed on day one.
Key points
- Order of assessment: security, equity, exit, sponsor, purpose.
- LVR is measured on the end-of-term balance, not day one.
- Weak or vague exits are the most common reason for a decline.
- Full disclosure up front is the fastest path to terms.
Frequently asked questions
Do private lenders require tax returns?
Often not, where the loan is repaid from a sale or refinance rather than trading income. Low-doc structures are standard in private credit.
How quickly can I get indicative terms?
Typically within one business day of receiving a complete deal snapshot.
Does bad credit rule me out?
Not automatically. Adverse history is assessed in context alongside the security position and the strength of the exit.