Non-bank business lender, secured on property

“Non-bank” tells you what a lender isn’t. It doesn’t tell you how the lender thinks, where its money comes from or how it will treat your file. A large non-bank funding thirty-year home loans and a direct private lender funding a six-month business loan against a warehouse are both non-banks, yet they work in almost opposite ways. This page explains the difference, where a direct private lender fits, and how to tell which kind you’re dealing with.

What is a non-bank business lender?

In Australia, a bank is an authorised deposit-taking institution (ADI). APRA keeps a public register of ADIs licensed to operate here, regulated under the Banking Act 1959. A non-bank lender is any lender not on that register. It can’t take deposits, so it funds loans another way: through securitisation, warehouse lines from larger institutions, investor funds or its own capital.

The Reserve Bank has noted that non-banks have lighter regulatory obligations because they can’t accept deposits, and that they’ve expanded into areas banks have pulled back from, including property lending. Non-bank lending is still a small slice of business credit: the RBA put it at less than a tenth of total business lending.

Key terms

• ADI: an authorised deposit-taking institution, such as a bank, licensed by APRA.
• Non-bank lender: a lender that doesn’t take deposits.
• Private lender: a non-bank that lends investor or its own funds, usually short-term and secured on property.
• Private credit: the wider market for non-bank lending funded by investors. ASIC estimated it at about $200 billion in September 2025.
• Direct lender: the lender that assesses and funds the loan itself, as opposed to a broker who arranges it.

Bank, large non-bank or direct private lender: where does each fit?

	Bank (ADI)	Large non-bank	Direct private lender	Online unsecured lender
Funding	Deposits and wholesale markets	Securitisation and warehouse lines	Investor funds or own capital	Investor or warehouse funds
How it decides	Credit policy and scoring	Fixed eligibility rules set by funders	Each deal on security and exit	Bank statements and algorithms
Typical term	Years	Years	Months, 1 to 24 for a first mortgage	Months
Security	Property and business assets	Usually property	Property	Often none, director guarantee
Speed	Weeks	Days to weeks	24–48 hours possible once documents are in; same day possible to $250k	Days
Best for	Long-term, low-cost debt	Long-term debt outside bank policy	Short, urgent or unusual needs with equity	Small needs with no property

The middle columns are where people get confused. A large non-bank is often just a bank with different rules: if your file doesn’t fit its box, the answer is no, because the funders behind it set the box. A direct private lender has no such box. It still says no, but for reasons that relate to your deal, not a scoring sheet. The private lender vs non-bank lender guide covers the funding mechanics in more depth.

Why do business owners turn to a non-bank lender?

Usually because a bank has said no, said “not yet” or said “in six weeks”. Common reasons:

• Recent trading looks weak on paper even though the business is sound, so serviceability tests fail.
• ATO debt or credit defaults make the bank’s policy a closed door.
• The deadline is shorter than the bank’s process. See refinance when the bank says no.
• The bank is exiting the relationship or won’t roll a facility at review. See bank won’t renew your facility.
• The security is unusual: a vacant commercial building, a property held in a trust, or land.
• The amount is too small for many private lenders, who start at $250k. Loans here start at $20k.

The why banks decline business loans guide explains the bank side in detail.

What does a direct private lender do differently?

• It decides on equity and exit. The two questions are: is there enough property value behind the loan, and how will it be repaid in the agreed term?
• No formal valuation required. The lender assesses the property itself, saving time and the cost of a report.
• Interest can be prepaid or capitalised, so the business may make no monthly repayments during the term.
• Flexible structures: a private first mortgage, a second mortgage behind your bank, or a caveat loan that can later convert to a registered second mortgage.
• One decision-maker. Here, our lending partner fundU assesses and funds each loan itself. Your details aren’t passed to a panel of lenders.

What will a direct non-bank lender lend against, and what won’t it fund?

Because the property carries the decision, the type of property matters more than the type of business.

Security	Position here
Home or investment house or unit	Accepted, for business purposes only
Shop, office, medical suite	Accepted
Factory, warehouse, industrial unit	Accepted
Vacant land	Case by case
Rural property	Case by case
Business assets alone (stock, equipment, debtors)	Not used as the security

On the structure side, the choices are a private first mortgage where the property is debt-free or the bank is being repaid, a second mortgage behind your existing lender, or a caveat loan where speed matters most.

What isn’t offered: unsecured loans, consumer or household lending, and progress-draw construction finance. If one of those is what you need, a bank, a large non-bank or a specialist construction financier is the better call, and the specialist will tell you so. For the bigger picture on where private lending sits in the market this year, see private credit in Australia in 2026, and for how a direct lender compares with others across the country, private lender Australia.

How does it work?

1. Enquire in about 60 seconds. Property, what’s owing, amount, purpose and exit. No credit check at this stage.
2. A specialist reviews it and calls to test the exit and the structure.
3. Letter of Offer sets out the amount, term, interest option and assessment fee.
4. Your solicitor reviews, everyone signs and identity is verified.
5. Settlement: funds released and the mortgage or caveat registered.
6. Exit: refinance, sale or business cash flow repays the loan and the security is discharged.

Who does a direct non-bank lender suit?

• Businesses with property equity and a short-term need: an ATO debt, a purchase, a buyout, a contract start-up.
• Owners in transition between banks, who need months, not years.
• Borrowers with credit blemishes, assessed case by case.
• Companies, trusts and individuals in business borrowing for business purposes.

When isn’t a non-bank the right move?

• When you want a ten-year loan. A bank or a large non-bank is built for long-term borrowing and will almost always be cheaper over that horizon.
• When the bank would say yes in time. If your deadline allows the bank’s process, use it.
• When there’s no exit. A short-term loan without a way out simply moves the problem.
• When the purpose is personal or household. These are business-purpose loans only.
• When an unsecured loan of a few thousand would do and you’d rather not put property up.

How do you check any non-bank lender before you sign?

• Look up the lender’s ABN on ABN Lookup and its company on ASIC’s registers; ASIC also keeps banned and disqualified registers for people and organisations.
• Make sure the Letter of Offer names the lender, not just a brand.
• Ask who actually decides and funds the loan: the lender itself, or a panel behind a broker.
• Get every fee and cost in writing before you sign.
• Have your own solicitor review the documents.

ASIC’s 2025 review of private credit found good and poor practice, flagging unclear fees and related-party dealings among its concerns. That’s a good reason to ask direct questions. The how to check a private lender guide has a fuller checklist, and the direct lender vs finance broker comparison explains why who decides matters.

Documents you’ll need

• Photo ID for each owner, director and guarantor.
• ABN or ACN, and trust deed where relevant.
• Property details and statements for any existing loans.
• The purpose: an ATO notice, contract, invoice or payout letter.
• Exit evidence: a refinance approval, sale agreement, forecast from your accountant or contract income.

Compare that with the bank list on business.gov.au, which typically includes a business plan, financial reports, forecasts and personal financial information. The private list is shorter because the decision rests on different things.

How fast is a non-bank loan?

Funding within 24–48 hours is possible for up to $5m once documents are in; property-secured amounts from $20k to $250k are possible the same day. The usual delays are documents, signatures and payout figures from existing lenders, not committees or reports.

What it costs (without the guesswork)

A non-bank private loan generally costs more than a bank loan, because the lender takes more risk over a shorter term. Pricing is set on each deal’s security, LVR, term and exit. You’ll see interest (prepaid or capitalised), a small assessment fee shown on the Letter of Offer, legal and registration costs, and discharge costs at the end. A second mortgage or caveat costs more than a first mortgage because it ranks behind the bank.

Illustrative example (net funds): a Sydney engineering firm’s bank declines to renew a $900k facility secured on the firm’s $2.4m workshop. The owners need eight months to sell a second site. Illustrative: a private first mortgage lending to 50% of the workshop’s value would allow up to $1.2m.

• Loan: $1.05m private first mortgage for 12 months
• Less bank payout: $900k
• Less interest prepaid for the term (set on the Letter of Offer): say $90k
• Less assessment fee, legal and registration costs: say $15k
• Cash to the business: about $45k, kept as a buffer The exit is the sale of the second site, already listed. If you’re in New South Wales, the Sydney private lender page covers local title and land tax points.

Bank says no or not yet? Talk to a direct lender in about 60 seconds.

Want a decision from the lender itself? See if you qualify

Tell us about the property, what’s owing on it, the amount, the purpose and how you’ll repay. There’s no credit check when you enquire, your details go to one lender rather than a list, and a real specialist reads each enquiry and calls you with a plain answer.

The clearer your figures, the faster that answer. Check your eligibility, or read secured business loans to compare structures first.