Private lending and short-term property finance

Last updated 6 November 2026 · Reviewed by 360 MMS Compliance

What is private lending?

Private lending, sometimes called private credit, is finance from outside the mainstream home loan market. It's typically short term and secured by property. Instead of fitting a borrower to a standard product, the lender looks at the whole deal: the project, the security, the borrowers and how the loan will be repaid.

Because each deal is different, there's no standard rate sheet. Each loan is quoted and approved individually, and fees and charges apply.

When do people use short-term property finance?

Common reasons include:

• Construction and development: funding a residential or commercial project, with funds released in stages as the build progresses.
• Land and sites: buying land or a site that's being prepared for development, including subdivisions.
• Residual stock: repaying a construction loan on completed homes or units that need more time to sell, while sales continue.
• Bridging: business-purpose finance while a property is sold or longer-term finance is arranged.
• Second mortgages: specialist business-purpose loans secured by a second mortgage.
• Non-residential investment: buying income-producing property such as commercial or industrial premises.

Why is private lending for business purposes only?

Private loans are designed for business and investment activity. The National Credit Code generally applies to credit used mainly for personal, domestic or household purposes, or to buy or improve residential investment property. Business-purpose loans fall outside it, so the consumer protections in the Code don't apply in the same way.

That's why these loans aren't for personal, domestic or household purposes. If you're buying or refinancing a home to live in, a regulated home loan is the place to start.

What is a business purpose declaration?

A business purpose declaration is a signed statement from each borrower confirming that the loan is for business or investment purposes, not personal use. Every borrower on a private loan signs one.

Take it seriously. Only sign it if it's true, and read your loan documents carefully. Because the loan isn't regulated consumer credit, it's a good idea to get independent legal and financial advice before you sign.

Why does the exit strategy matter so much?

Private loans are usually interest-only or have capitalised interest, and they're repaid at the end, not over a long term. The exit strategy is how that happens. Typical exits are:

• selling the property or the completed stock;
• refinancing to a longer-term loan once the project is finished or the property is let.

The lender will want to see that the exit is realistic before making an offer. Plan for delays: if a sale takes longer or brings in less than expected, more interest builds up and more debt may be left to refinance. If your timeline changes, talk to your broker early.

What does private lending cost?

Private loans generally cost more than a standard home or commercial loan, because they're short term, quoted deal by deal and often cover situations that standard loans don't. Costs to ask about include:

• Interest: charged on the amount you've borrowed. With capitalised interest, it's added to the loan, so you pay interest on interest and the balance grows over time.
• Fees and charges: such as establishment, valuation and legal costs.
• Exit costs: selling costs or the costs of refinancing at the end.
• Costs if the exit is delayed: ask what happens if the loan isn't repaid when planned.

Your broker can set out the expected total cost so you can weigh it against other options.

What are the pros and cons of private lending?

Possible pros:

• It can fund business-purpose projects that don't fit a standard home or commercial loan.
• Each loan is looked at as a whole deal: the project, the security, the borrowers and the exit.
• Interest-only or capitalised interest can ease cash flow while a project is underway.
• Individuals, companies and trusts can borrow.

Possible cons:

• It generally costs more than a standard home or commercial loan.
• Capitalised interest grows the balance, so you pay interest on interest.
• Repayment depends on the sale or refinance happening as planned.
• The National Credit Code doesn't apply, so independent legal and financial advice matters.

How do I apply for private lending, step by step?

1. Talk to your broker or our team. Share the property, any plans and approvals, costs, timeline and how the loan will be repaid.
2. Get a quote. The structure is talked through and the loan is quoted individually, with no rate sheet.
3. Provide your documents. Your broker or our team tells you what's needed, and every borrower signs a business purpose declaration.
4. The assessment. The lender assesses the security, the borrowers and the exit against its criteria, and a valuation is part of the process. For development, it also reviews the plans and approvals, builder, budget and expected end value.
5. The offer. If the loan is approved, you receive a loan offer and documents. Get independent legal and financial advice before you sign.
6. Settlement. The loan settles, with staged drawdowns for construction.

How can 360 Private help?

360 MMS is a mortgage manager, and 360 Private is its specialist private lending offer, for business purposes or non-residential investment only. Through 360 Private, we can help with:

• Loan types: construction, land and sites, residual stock, bridging, second mortgages and non-residential investment.
• Deal-by-deal quotes: each loan is quoted and approved individually, based on the project, the security, the borrowers and the exit.
• Borrowers: individuals, companies and trusts who are Australian or New Zealand citizens or Australian residents.
• First-time developers: some projects from first-time developers can be considered.
• The exit: talking through how the loan will be repaid, by sale or refinance, from the start.
• Getting started: apply through your broker, or contact our team directly.

FAQs

Sources and further reading:ASIC: National Credit Code · Moneysmart: Bridging finance · business.gov.au: Apply for a business loan

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. 360 Private loans are for business purposes only, aren't regulated by the National Credit Code, and are subject to lending criteria; fees and charges apply. Kuone Pty Ltd T/As 360 MMS (ABN 81 621 683 672), Australian Credit Licence 504193.