Private business loans provide fast, flexible funding when traditional banks decline or can't move quickly enough. Here's your complete guide for Australian business owners.
What Are Private Business Loans?
Private business loans are business financing from non-bank lenders, typically secured by property or business assets, with faster approval and more flexible criteria than banks.
Key Benefits:
- Fast approval: 3-14 days (vs 4-8 weeks for banks)
- Flexible criteria: Focus on assets and cash flow, not just credit
- Higher approval rates: Accept situations banks decline
- Alternative income verification: Don't need 2 years tax returns
Why Banks Decline Business Loans
Common Bank Decline Reasons:
- Trading less than 2 years
- Recent tax losses (even if profitable now)
- Industry concerns (hospitality, retail, etc.)
- Credit impairment (late payments, defaults)
- Complex income structures
- Insufficient security
- Policy changes (banks exit certain lending)
Private lenders focus on different factors:
- Current business performance (not just tax returns)
- Asset security (property equity)
- Business cash flow
- Your experience and plan
Types of Private Business Loans
1. Property-Secured Business Loans
Security: Residential or commercial property Rate: 8-14% p.a. Amount: $50,000 - $5 million Term: 1-5 years Best for: Established businesses with property equity
2. Caveat Loans
Security: Caveat on property Rate: 2-4% per month (24-48% p.a.) Amount: $50,000 - $2 million Term: 1-12 months Best for: Urgent working capital, very short-term needs
3. Asset Finance
Security: Equipment being purchased Rate: 8-15% p.a. Amount: $10,000 - $500,000 Term: 1-7 years Best for: Buying equipment, vehicles, machinery
Private Business Loan Rates
Interest Rates by Type:
- Property-secured: 8-14% p.a.
- Asset finance: 8-15% p.a.
- Unsecured: 12-25% p.a.
- Caveat: 24-48% p.a. (short-term only)
Fees:
- Application: $500 - $2,000
- Establishment: 1-3% of loan amount
- Valuation: $300 - $2,000
- Legal: $1,000 - $3,000
- Monthly service: $0 - $200
When to Use Private Business Loans
Choose private lending when:
✅ Speed is critical - Need funds in days/weeks ✅ Bank declined - Credit, trading history, or policy reasons ✅ Self-employed - Hard to prove income ✅ Growth opportunity - Time-sensitive business opportunity ✅ Bridging solution - Fix issues then refinance to bank ✅ New business - Trading less than 2 years ✅ Working capital - Seasonal business needs
Ready to explore private business funding? Connect with licensed business lenders for fast assessment.