Quick answer
Non-bank secured lending is business finance from a lender that doesn't take deposits, backed by a mortgage or caveat over property. Instead of years of financials and servicing ratios, the lender relies on the equity in the property offered and a clear plan to repay. Loans here run from $20k to $5m, on open terms, with no sworn valuation and no repayments for the first 6 months.
Key points
- The security is usually limited to the property you choose to offer, not everything you own
- Equity and the exit carry the decision, so patchy financials or ATO debt aren't automatic stoppers
- Business-purpose credit sits outside the National Credit Code, so read every document with your solicitor
- Non-bank money costs more than a bank's, so match it to a defined need with a clear end
- Many owners use non-bank secured funds as a bridge back to a bank
- Amounts
- $20k – $5m
- Security
- First mortgages, second mortgages and caveat loans over residential, commercial, industrial, rural or vacant land
- Valuation
- No sworn valuation — we assess value ourselves
- Terms
- Open terms — repay early anytime with no penalty
Non-bank secured lending is borrowing for a business purpose from a lender that doesn’t take deposits, with property pledged as security by a mortgage or caveat on the title. The real difference from a bank isn’t the paperwork on the title, which looks much the same. It’s what the lender relies on, what it asks you to put up, and how quickly it can say yes.
Our page on the non-bank business lender explains the types of lender in the market. This page looks at the lending itself: the security package, the assessment and the exit, and how each compares with a bank’s version.
What is non-bank secured lending, in plain terms?
A secured loan is one backed by an asset the lender can turn to if the loan isn’t repaid. The government’s own small business guidance puts it simply: “A secured loan is backed up by collateral or security.” In non-bank secured lending for business, that asset is nearly always Australian real property: a home, an investment unit, a shop, a warehouse, farmland or a vacant block.
The lender records its interest on the title through one of three positions:
- a first mortgage, when the property is debt-free or the existing lender is being repaid;
- a second mortgage, ranking behind a bank that stays in place;
- a caveat, a quicker notice of interest often used for short needs, which can later be converted to a registered second mortgage.
Here, loans run from $20k to $5m, secured over residential, commercial, industrial or rural property or vacant land, for business purposes only.
Who funds non-bank secured lending, and who keeps an eye on it?
Non-bank lenders fund loans with investor money, credit funds, wholesale lines or their own capital rather than customer deposits. Because they don’t hold deposits, they aren’t supervised as banks are.
Two official pieces of the picture are worth knowing:
- APRA registration for larger lenders. APRA explains that a corporation lending or providing finance with “assets of more than $50 million” must register as a registered financial corporation, so APRA can collect data under the Financial Sector (Collection of Data) Act 2001. APRA is plain that these entities “are not subject to supervisory oversight” in the way an authorised deposit-taker is.
- Business-purpose credit and the National Credit Code. ASIC’s page on the Code says it applies to credit provided “wholly or predominantly” for personal, domestic or household purposes, or for residential investment property. Business-purpose lending sits outside that list, which is why you’ll be asked to confirm the purpose in writing.
The practical upshot: read the loan documents carefully with your own solicitor, and check who you’re dealing with. Our guide on how to check a private lender walks through the public registers.
How is the security package different from a bank’s?
This is the part most owners don’t expect. A bank lending to a business commonly wants a broad package. A property-secured non-bank loan tends to be narrower and more specific.
| Element | Typical bank business loan | Property-secured non-bank loan |
|---|---|---|
| Property security | Often an all-monies mortgage that can secure every debt you owe that bank | A mortgage or caveat over the property you choose to offer |
| Other properties | Frequently crossed with your other titles at the same bank | Only the titles named in the loan |
| Business assets | Often a general security over the company’s assets | Not usually the focus; the property carries the risk |
| Guarantees | Directors and sometimes spouses | Owners and directors where a company or trust borrows |
| Ongoing tests | Annual reviews, financial covenants, reporting | Centred on the term and the exit |
| Property assessment | Usually a formal valuation ordered by the bank | No sworn valuation; we assess value ourselves |
The narrower package has a real benefit: it leaves your other properties and your bank relationship untouched. If crossing has already tied your titles together at a bank, our guide to freeing a cross-collateralised property explains the options.
What does a non-bank secured lender assess instead of servicing ratios?
Banks lean on serviceability: can the business’s verified income cover repayments over many years? A property-secured non-bank lender asks three different questions.
- How much equity is there? We lend up to 80% of value on residential security and up to 70% on commercial, lower on large acreage, with every existing debt on the title counted.
- How saleable is the property? Location, type, condition and the depth of the buyer market all matter, because the property is the fallback.
- How will the loan be repaid? A sale, a bank refinance, a contract payment or another defined event. The exit carries as much weight as the equity.
Credit history still gets looked at, but bad credit, defaults and ATO debt are considered and never disqualifying on their own. Companies, trusts and sole traders can all borrow, including start-ups, with no minimum trading period or turnover. If you’d like to test the numbers before talking to anyone, check your loan in about a minute.
Which property configurations can secure a non-bank loan?
Almost any combination of position, property type and borrower can work, provided the equity and the exit stack up. Our property-secured business loans overview sets out every combination in one matrix, with a link to the page that covers each. The short version:
- Position: first mortgage, second mortgage or caveat.
- Property: residential, commercial, industrial, rural or vacant land.
- Borrower: a company, a trust or a sole trader, with the property owned by the borrower or offered by a related party.
- Situation: urgent, credit-impaired, low-doc or a straightforward growth need.
Illustrative example: keeping the bank, adding non-bank funds
Illustrative example only; the business and figures are made up.
A Toowoomba agricultural machinery dealer needs $400k to secure a shipment of tractors ahead of the planting season. The dealer’s bank holds a mortgage over the family home and the business’s yard, crossed together, plus a general security over the company. The bank is willing to look at an increase, but wants updated accounts and a fresh assessment that will take weeks.
The owners instead offer a second mortgage over the yard alone, which is assessed at around $1.6m with $500k owing to the bank. Illustrative: keeping total lending on the yard within a 60% band allows up to $960k of combined debt, comfortably covering the $400k behind the bank. The home isn’t part of the new security. Interest is capitalised, so nothing is payable for the first 6 months while the stock sells through, and the exit is the season’s sales plus a bank refinance once the accounts are done.
When is a bank still the better choice?
Non-bank secured money is priced above a bank’s, so it earns its place only where speed, flexibility or the shape of your situation matters more than the cost. A bank is usually the better fit when:
- the need is long-term, such as buying premises you’ll hold for a decade;
- your financials are current and comfortably cover repayments;
- the timetable is relaxed and nothing is lost by waiting;
- you can’t name a clear way to repay within a defined period.
Many owners use both: non-bank funds to solve today’s problem, then a bank refinance once the issue that worried the bank has been fixed. See refinancing a bank first mortgage for how that handover works in reverse.
What should you ask before giving security to a non-bank lender?
Put the same questions to any non-bank lender and compare the answers in writing:
- Which titles will be secured? Make sure it’s only the property you intend to offer.
- Who needs to sign or guarantee? Every registered owner signs; directors usually guarantee for a company.
- What happens if the exit runs late? A lender that talks about this openly before you sign is easier to work with later.
- Is there an early repayment penalty? Ours has open terms, with no minimum and no maximum, and you can repay early anytime with no penalty.
- Is a valuation required, and who pays? We assess value ourselves, so there’s nothing to arrange or pay for.
- Is my enquiry going to one lender or many? It should go to one.
Weighing up a non-bank secured loan? See if you qualify
If a bank has been slow, or its package reaches further than you’re comfortable with, it’s worth knowing what your property can do on its own. The loan check takes about 60 seconds, and there’s no credit check just for finding out, so your credit file is left alone.
Your enquiry comes straight to us as the direct lender; it isn’t shopped around to a list of funders who then all call you back. A secured-lending specialist reads it and phones you to talk it through. Please answer the questions about the property and what’s owing on it accurately, because that’s what lets us give you a real answer the first time.
Frequently asked questions
Is a non-bank secured lender the same as a private lender?
Not always. Non-bank is the wider group: any lender that doesn't take deposits. Some non-banks run large, rules-based loan programs that look a lot like a bank's. A private lender is a non-bank that decides each loan individually, usually on short terms and mostly on the property and the exit.
Will a non-bank lender want security over my whole business?
A property-secured non-bank loan is normally secured on the property or properties you offer, with guarantees from the owners where the borrower is a company or trust. That is narrower than many bank packages, which can reach across several titles and the business's other assets.
Does non-bank secured lending need financial statements?
Usually far fewer than a bank asks for. The decision rests mainly on the property's equity and how the loan will be repaid. If your exit is a bank refinance, recent figures help show that refinance is realistic, but they're not a gate every loan must pass first.
Can I use a non-bank secured loan with bad credit or ATO debt?
Yes, it's considered. Bad credit, defaults and ATO debt are never disqualifying on their own. What matters most is the equity in the property and a believable exit, and clearing a tax debt is itself a common purpose.
Can a non-bank secured loan sit behind my bank's mortgage?
Yes. A second mortgage or caveat loan can rank behind the bank's first mortgage, leaving the bank loan in place. Your bank's loan terms may require its consent before a further mortgage is registered, so check that early.
Is non-bank secured lending regulated?
Larger non-bank lenders above a size threshold register with APRA for data collection, though APRA doesn't supervise them the way it supervises banks. Credit for business purposes also sits outside the National Credit Code, which is why the documents and independent legal advice matter so much.