Secured business loans with no formal valuation

Ask anyone who has borrowed against property where the delays came from, and a familiar answer comes up: waiting. Waiting for a report to be ordered, for an inspection to be booked, for the document to come back, and sometimes for a second opinion after that. When the money is needed for a settlement on Friday or an ATO deadline next week, that wait can decide whether the deal happens at all.

Our lending partner fundU takes a different route. It doesn’t use valuers. A specialist assesses the property directly, and that assessment, combined with the equity and the exit, sets the loan.

What does “no valuation” actually mean?

It means no formal valuation report is ordered at any stage of the loan. There’s no instruction to a third party, no inspection booking to wait on, and no valuation invoice passed on to you.

It does not mean the property is ignored. The property is still the heart of the deal; it’s simply assessed by the lender’s own specialist rather than through a separate report. Think of it as the difference between being asked to fetch a document and having the person across the table look at the property with you.

How is the property assessed instead?

The specialist builds a picture of what the property would realistically sell for, and how quickly. That picture draws on:

• The title. Who owns it, what’s registered against it, and whether anything unusual sits on it. In Victoria, for example, the Register records the owner, the land description and encumbrances such as mortgages, caveats and leases; every state keeps an equivalent.
• Location and type. Suburb or town, street, zoning, land size, and whether it’s a house, unit, shop, office, warehouse or land.
• Condition. Age, upkeep and any obvious issues that would put buyers off.
• Recent comparable sales. What similar properties nearby have actually sold for lately.
• Saleability. How deep the buyer pool is and how long a sale would likely take.
• What you tell us. Your estimate of value, any recent agent’s appraisal, and exactly what’s owing against the title.

From there the lender decides how much of the equity it is comfortable advancing, in line with the loan-to-value ratio (LVR) it sets for that deal. ASIC’s Moneysmart describes the LVR as the loan amount as a percentage of the asset’s value. The equity side of that sum is covered on how much equity can I use.

Why skip the formal valuation? The benefits for borrowers

What changes	With a formal valuation	With direct assessment
Time	Order the report, book the inspection, wait for delivery	Assessed as part of reviewing your enquiry
Cost to you	A valuation fee, often paid up front	No valuation fee
Who forms the view	A third party writing for the lender’s file	The specialist who is also weighing your exit
What happens if a deal falls over	The report cost may already be spent	Nothing extra spent on a report

Each benefit is practical:

• Speed. Removing the report from the critical path is a large part of why funding is possible within 24–48 hours for up to $5m once documents are in, and why smaller amounts between $20k and $250k are possible same day. See fast second mortgages for what else affects timing.
• No valuation fee. One less upfront cost, and no money spent on a report for a deal that might not proceed. The full cost picture is in private mortgage costs explained.
• A figure with context. A formal valuation is written to stand on its own, so it is understandably cautious. A specialist assessing the property with the whole deal in view, including the term, the position on title and the exit, can weigh the property against what the loan actually needs.

Does no valuation mean the lender takes more risk?

Not really; it manages the risk in other places. The lender still:

1. keeps total secured debt to a sensible share of the property’s assessed worth
2. ranks its loan as first mortgage, second mortgage or caveat and prices accordingly
3. requires a clear, believable exit: a sale, a refinance, a known payment or business cash flow
4. checks the title and the borrower’s documents before funds are released

That’s why accuracy from you matters so much. If you overstate the property or leave a debt off, the answer you get will change once the title search arrives, and that costs everyone time.

Illustrative example: a Gold Coast marine mechanic needs $180,000 to buy a competitor’s equipment before an auction closes on Thursday. He owns a workshop, assessed directly at about $900,000, with $420,000 owing to his bank. For this example only, suppose total secured debt is kept to 70% of the assessed figure, allowing up to $210,000 behind the bank. His enquiry goes in on Monday morning with the rates notice, the bank statement and an agent’s appraisal from earlier in the year. No report needs to be ordered, so documents can be issued as soon as the assessment and checks are complete. The exit is a planned sale of surplus equipment plus trading cash flow over twelve months.

What can I do to make the assessment quick and accurate?

Give the specialist what they would otherwise have to chase:

• the full property address and lot/plan details if you have them
• a recent rates notice and current insurance
• statements for every loan secured on the property
• a recent agent’s appraisal or market comparison, if you have one
• for commercial property: leases, rent and outgoings

And be candid about anything unusual: a cracked slab, an easement, a pending council order, a tenant in arrears. Surprises found later slow things down far more than issues disclosed up front.

A last caution about shortcuts: the land value printed on a council rates or land tax notice is not a property value. NSW states its land values cover the land only and exclude buildings and improvements.

If your exit is a bank refinance, plan for that bank to make its own assessment of value when you get there. Our guide comparing a private lender and a bank explains how to leave room for that.

Ready to skip the wait? Send your property details now.

No valuation, no waiting: see if you qualify

A 60-second enquiry is enough for a specialist to start forming a view. Enquiring doesn’t trigger a credit check, your details aren’t sent to a list of other funders, and the person who reads your enquiry works for the direct lender.

What helps most is honesty about the property and what’s owing on it. Accurate details at the start mean the figure you hear first is the one that holds through to settlement.

Get your property assessed without a valuation.