October 28

What does a Private Lender or Mortgage Broker offer?


Why would one consider a home or commercial loan from a Private Lender?

Who is a Private Lender or Mortgage Broker?

Let’s be upfront about this. Most people who have a good credit record and regular income would borrow a loan from the bank. Whether it’s a home loan, refinancing or new purchase. Some banks now also allow you to take out a loan against your home and use the funds for investments or commercial projects.

Bank loans typically offer a good interest rate and can be a secure method for freeing up cashflow for various uses.

However, the scenario is not always so perfect. Many Australians do not have the financials or clean credit history that banks require.

And this is not always their fault. Take for instance, home business owners or the self employed . Many self employed individuals can’t show strong financials – as they choose to keep the profits in the business and often do not pay themselves.

These individuals may find it very difficult to secure a bank loan.

This is where a Private Lender can fill the gap. Private Lenders are less stringent (and is less risk adversed) when it comes to reviewing loan applications.

As a rule, all loans should still be secured against property (still with reasonable equity on them). But private lenders will also consider many other factors, such as business P&Ls, accept an accountant’s letter and even consider accomodate arrears & startup businesses. This allows even the self employed people to access a private loan when the banks say no to them.

So if you are finding it difficult to secure a bank loan, perhaps you can consider speaking to a private lender or mortgage broker.

Banks say No when you:

  • Don’t have 2 years financials
  • Don’t have 12 months BAS & trading statements
  • Don’t have net trading profit (taxable) to service all debts
  • Have arrears on credit cards, personal loans and mortgages
  • Have judgments or are in default
  • Have been in business less than 2 years
  • Are in a High Risk Industry or Sector

Private Lenders can accept applicants:

  • who may not have a clean credit history
  • who have an accountant letter to support the loan application
  • who are ex bankrupts or who have arrears*

    *Property required as security.

Who is a Private Lender or Mortgage Broker?

A Private Lender can be a high net worth individual with funds available for lending. These individuals prefer to lend out their funds legally through a private mortgage broker as private lending yields higher returns for them.

However, it is not always easy to identify a reliable and trustworthy private lender. Which is why it’s best to work with a private lending specialist or mortgage broker. They have lenders that they work with regularly and are able to mitigate between borrowers and lenders.

A mortgage broker is an individual or company that has a pool of private lenders in their network, and who is able to customise a private loan to meet the needs of the borrower and the lender. Like a middle man.

Current day private lenders and mortgage brokers follow acceptable industry practices and handle all loan agreements legally.

Things to consider when dealing with a Private Lender or Private Mortgage Broker?

Who is a Private Lender or Mortgage Broker?

There are a few things to keep in mind if you are considering to borrow from a private lender.

Firstly, gone are the days of illegal lending. Private Lenders and private mortgage brokers these days are regulated and follow legal and acceptable lending practices. Disputes are handled legally in the courts and by contract. There are also lending associations and bodies that provide guidelines on how lending activities should be carried out.

So while there is always some risks associated, not just with private lending but even bank loans, one can be assured that the risks are controlled.

There are 3 things to consider when you proceed apply for a private loan with a Private Lender. Reputation of the Mortgage Broker / Private

1. Legitimacy of the Private Lender or Private Lending Specialist

This is of the highest importance. Do you own due diligence in researching the mortgage broker or private finance company you want to work with.

You can often get a good gauge how established and proper they are by reviewing their website, and checking credentials. Always ensure they have a valid ACL (Australian Credit Licence) and/or AFSL (Australian Financial Services Licence).

2. Experience & Responsiveness

Experience and responsiveness are two very important things to watch out for. When you speak with your private lender or mortgage broker, you can tell if they are knowledgeable and experienced in the area of personal lending.

It is important to work with a broker who knows the way the industry operates, and one with a wide network of private lenders.

Responsiveness is also very important. You will want to work with a company that responds quickly to your enquiries. And one that is resourceful and settles quickly.

3. Lending Contract Terms

Be sure to seek legal advice and go through your lending contract and terms carefully. Your lawyer should be able to give you the proper counsel over your contract. It is very important that you understand your contract fully and fulfill all your obligations.

You will also want to ensure that the private lender’s fees and charges are in line with market rates. Your private lending specialist or mortgage broker will be able to advice you on this.

Need to speak with a private mortgage broker?

Gryphon Financial has been in Private Lending for over 15 years with a network of over 160 trusted private lenders. We can help you when the banks say No.


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