What is private credit?
Private credit is lending that happens outside the traditional banking system. Instead of a bank deposit funding the loan, capital is provided directly by wholesale investors — high-net-worth individuals, family offices, superannuation funds, and institutional allocators — through managed investment schemes, contributory mortgage funds, or direct participations.
In Australia, most private credit is secured against real estate. Loans are typically for business or investment purposes and fall outside the National Consumer Credit Protection Act 2009 (Cth) ("NCCP"). This is a deliberate structural feature: the private credit market exists to serve commercial borrowers, developers and investors — not consumers.
How does a private credit loan work?
A commercial finance broker (or the borrower directly) presents a deal. An originator like Envision Private analyses the transaction, orders an independent valuation, reviews the sponsor's track record and financial position, and issues indicative terms — usually within 24 to 72 hours.
Once terms are agreed, formal credit approval follows, legal documentation is prepared, and the loan settles with a registered first-ranking (or second-ranking) mortgage over the underlying property. Interest is generally paid monthly or capitalised into the facility, and the loan is repaid via a defined exit — sale, refinance, or realisation of the security.
Who invests in private credit?
Investors in Australian private credit are wholesale, sophisticated or professional investors within the meaning of the Corporations Act 2001 (Cth). This typically includes:
- High-net-worth individuals who hold a valid sophisticated investor certificate under s708(8);
- Family offices deploying multi-generational capital;
- Self-managed super funds that meet the wholesale client tests;
- Institutional and semi-institutional allocators;
- Australian financial services licensees and their eligible clients.
Why do borrowers use private credit?
Speed, flexibility, and certainty of execution. Banks have long, standardised approval processes and increasingly narrow credit appetites. Private lenders can move in days, structure loans around the sponsor's actual situation, and take a commercial view where banks apply rigid policy.
Common use cases include bridging finance while a property sells, residual stock funding, development site acquisition, working capital secured by property, and refinancing bank debt that has come to term.
What returns do private credit investors typically see?
Returns vary with loan type, security position, LVR, term and market conditions. First-mortgage private credit in Australia has generally offered mid-to-high single-digit yields, with higher returns available on second-mortgage, mezzanine and construction facilities that carry additional risk. All returns are before fees, before defaults, and past performance is not a reliable indicator of future returns.
Where does Envision Private fit?
Envision Private originates, underwrites and manages private credit transactions secured by Australian real estate. We work with commercial finance brokers to source high-quality deals, apply institutional-style credit discipline, and match each transaction with appropriate wholesale investor capital. We are not an NCCP-regulated lender, and we only arrange loans for business and investment purposes.