Direct answer: Short-term private lenders provide non-bank commercial finance for a defined, time-sensitive business or property transaction, often with property as security. Speed is realistic only when purpose, security, a complete borrower pack and a dated exit are already in place. Compare lenders on total cost for the expected hold and a delayed exit, the actual terms and enforcement rights, and whether the repayment event still works if refinance or sale slips. It is a poor fit for recurring losses, an unresolved dispute, or an exit that depends only on a future approval.
This page is a lender-assessment checklist and exit-planning guide for Australian business-purpose funding. It does not name, rank or rate lenders. For a definition of the market, read what private lending is in Australia. For property timing-gap structures, use the short-term property loans decision guide.
Emet Capital is a finance broker, not a lender. If you want help packaging a complete file so private and non-bank options can be compared, see the private lending service. An enquiry starts a discussion; it is not an approval or a commitment to lend.
Lender-Assessment Checklist
Work through these points in writing before you accept a term sheet. The same list is the basis for comparing two or more short-term private lenders.
| Check | What “ready” looks like | Risk if it is missing |
|---|---|---|
| Purpose | Exact amount, payee and commercial reason, with a deadline that belongs to the transaction | Funds drift into working-capital losses or an unexplained use |
| Security | Title, existing mortgages, payout figures and the asset the lender will actually take | Hidden priority, caveats or a security the borrower did not intend to expose |
| Borrower pack | Identity, entity and trust documents, ownership, guarantors and current liabilities | Assessment stalls, or conditions appear only at the deadline |
| Cost | One dollar-cost schedule for the expected term and a delayed-exit case | A cheap headline rate hides retained interest, fees or extension cost |
| Terms | Term, payments, covenants, default, variation and enforcement rights in the documents | The product label does not match the contract |
| Exit | A dated refinance, sale, receivable or other event, with evidence and a fallback | Default, forced sale or more expensive extension |
| Who you are dealing with | Company or ABN search, plus any ASIC licence or register result that applies | You cannot tell whether the firm is licensed, an AFCA member, or commercial-only |
Do not treat an indicative term sheet as settlement. Valuation, credit, legal and verification conditions can still change timing and the net amount advanced.
When Short-Term Private Finance May Fit
The structure may be worth comparing when a valuable transaction and the permanent funding timeline do not match. Common commercial situations include:
- settling a property or business acquisition before longer-term debt is ready;
- repaying a maturing lender while a documented refinance is in progress;
- funding a deposit, stock purchase or supplier payment tied to a known cash event;
- addressing a statutory or tax deadline as part of a wider, viable restructure;
- completing a defined project milestone before sale or refinance; or
- releasing property equity for a specific business-purpose payment.
The purpose must be more precise than “working capital”. A lender needs to understand where the funds go, why the timing matters, what changes after settlement, and how the debt leaves the balance sheet.
When It Is Usually the Wrong Tool
Short-term private debt should not be used to disguise a structural affordability problem. Warning signs include:
- the business is consistently unable to meet ordinary operating costs;
- the requested amount changes because liabilities are still being discovered;
- the proposed exit is “refinance later” with no lender, timetable or eligibility evidence;
- a property sale is assumed at an unsupported price or in an unrealistic period;
- the directors have not obtained legal, tax or insolvency advice where it is needed; or
- the borrower cannot carry interest, fees or an extension if the primary exit is delayed.
In those circumstances, additional secured debt may transfer a business problem to the property owner without resolving the cause.
The Main Short-Term Structures
| Structure | Typical commercial use | Key issue to check |
|---|---|---|
| First-ranking short-term mortgage | Acquisition, refinance or transition where the lender takes senior security | Existing payout, valuation basis and refinance or sale exit |
| Second mortgage | Equity release while preserving an existing first mortgage | First-lender consent, combined leverage and concurrent repayments |
| Caveat-based facility | Urgent business-purpose funding where lender policy permits the security method | Caveatable interest, title position, legal structure and short exit |
| Bridging facility | Purchase-before-sale, auction, maturity or project timing gap | The bridge must connect two identifiable events, not fund an indefinite need |
| Asset- or receivables-backed finance | Equipment, invoices, stock or business assets support the facility | Asset eligibility, concentration, control and realisable value |
Product labels are not consistent across lenders. Compare the actual security documents, repayment terms, covenants and enforcement rights rather than relying on the label alone. For layered property debt, see second mortgages for business. For a purchase-before-sale or maturity gap, see the bridging finance guide.
What Makes a Fast Assessment Realistic?
Speed depends as much on borrower readiness as lender appetite. There is no responsible universal timeframe.
| Assessment step | Information that should be ready | Common cause of delay |
|---|---|---|
| Transaction summary | Amount, purpose, deadline and use-of-funds breakdown | The amount or purpose keeps changing |
| Borrower and entities | ID, company or trust documents, ownership and guarantors | Incomplete entity map or unsigned trust documents |
| Security | Title, mortgage statement, payout, lease or asset evidence | Unknown priority, caveats, cross-collateralisation or access issues |
| Credit basis | Current trading evidence, liabilities and conduct appropriate to the product | “Low doc” is treated as “no explanation” |
| Exit | Dated refinance, sale, receivable or other event with supporting evidence | Exit relies on an untested assumption |
| Legal completion | Counsel availability and clear settlement instructions | Documents arrive only at the deadline |
The business.gov.au loan guide says documentation requirements vary between loans, but you may need to provide proof of identification, a business plan, financial reports, including cash flow statements, financial forecasts, lease agreements and your personal financial information.
How to Compare Total Cost
Do not compare only the annual rate. Ask each lender or broker to show the same dollar-cost schedule for the expected hold period and for a delayed exit.
The Australian Government’s business loan preparation guide says loans vary a lot in their costs and conditions, including the amount you can borrow, loan term, interest rate, set-up costs and ongoing fees. It's a good idea to compare loan products from multiple lenders before applying. Check for loans from non-bank lenders as well as traditional banks. Read each loan’s terms and conditions carefully to compare upfront and ongoing charges, interest rates, term lengths available and whether you need to provide security.
Include:
- interest calculation and whether it is paid monthly, retained or capitalised;
- establishment, line or risk fees;
- valuation and legal costs;
- broker fees and lender-paid commission disclosure;
- minimum-interest periods or early-repayment cost;
- default and extension pricing;
- discharge, settlement and ongoing review fees; and
- the net amount actually available after retained costs and payouts.
A secured loan is backed up by collateral or security – something of value you have, such as property or your business inventory. If you don’t repay the loan, the lender can take the security to cover their losses. Then compare the facility with the realistic cost of waiting, selling an asset, negotiating with the creditor, using receivables finance, or taking a longer conventional process. A transaction can be urgent and still fail the cost-benefit test.
Exit Planning
| Proposed exit | Evidence lenders may expect | Sensible fallback question |
|---|---|---|
| Refinance | Current financials, conduct, valuation and an explanation of why the takeout lender should approve | What changes if the refinance takes longer or the valuation is lower? |
| Property or asset sale | Agency evidence, contract status, comparable sales and realistic settlement timing | Can the price be reduced without leaving a debt shortfall? |
| Receivable or project payment | Executed contract, completion status and counterparty evidence | What happens if payment is disputed or delayed? |
| Business cash flow | Forecast linked to current trading and verified assumptions | Can the business accumulate the repayment amount after all other obligations? |
The facility term should include time for a normal delay. If the exit has to occur on the earliest possible date to avoid default, the structure has no practical buffer. Write the fallback before you sign, and make sure it does not rely on the same untested assumption as the primary exit.
Check Who You Are Dealing With
business.gov.au tells borrowers to check who they’re dealing with: to make sure it’s a real company, search for the name or ABN on the Australian Securities and Investments Commission (ASIC) register.
Separately, ASIC’s professional registers search allows you to search several registers at once. You can search the professional registers to find out about a person or an organisation registered or licensed with ASIC to provide a service. ASIC’s professional registers include information on Australian financial services (AFS) licensees, AFS authorised representatives, credit licensees and credit representatives. You can search the professional registers by individual or company name, registration or licence number, ACN or ABN.
ASIC is the national regulator for consumer credit and consumer leases under the national credit legislation. People that engage in credit activities generally need a credit licence or an authorisation from a licensee. That consumer-credit licensing rule is not automatically the rule for a commercial-only private lender.
ASIC’s commercial-loan information sheet says the laws, and the protections they provide to borrowers, differ depending on the purpose of the loan. The law provides the lowest level of protection to commercial loans, including loans to small businesses. Lenders that only provide commercial loans are not required to have a credit licence and are not legally required to be a member of AFCA. AFCA can resolve complaints from small businesses about commercial lending, including loans to primary producers, but AFCA can only resolve complaints about financial firms that are members of AFCA. If a lender is not a member, ASIC encourages anyone who has concerns about commercial lending to seek independent legal advice as soon as possible.
Absence of a credit licence does not, by itself, mean a commercial lender is illegitimate. It does mean consumer-credit dispute pathways and AFCA access may not apply. Confirm membership and licence status rather than assuming they exist.
Illustrative Decision Examples
These examples are hypothetical and are not Emet Capital client transactions.
Example 1: Maturing Loan With a Refinance Already Underway
A commercial property owner has a confirmed maturity date, current lease income and a replacement application that needs more time for valuation and legal review. A short bridge may be worth comparing if the incoming lender path is credible and the borrower can carry a delay. It is not enough to assume that a bank will approve after the bridge settles.
Example 2: Stock Opportunity With Uncertain Demand
A wholesaler can buy discounted stock but has no firm customer orders and already has slow-moving inventory. Fast debt may secure the purchase, yet it also magnifies inventory and cash-flow risk. Purchase-order, trade or inventory finance—or declining the purchase—may be safer than property-backed debt.
Example 3: Tax Deadline Inside a Wider Viability Problem
Property equity may make a facility technically possible, but finance should not be the only response if liabilities are increasing and the business cannot meet current obligations. The directors may need independent restructuring, legal or insolvency advice before taking more secured debt.
Questions to Ask Before Signing
- What exact conditions remain before settlement?
- What is the net amount available after every fee, payout and retained interest item?
- Which assets and guarantees are exposed?
- Can the lender reprice, extend or enforce if the exit is late?
- Is early repayment allowed, and does minimum interest still apply?
- Which part of the exit is within the borrower's control?
- What is the documented Plan B?
- Has the firm’s ASIC company or professional-register result been checked, and is it an AFCA member?
Next Step
For a business-purpose short-term facility, take the completed checklist, cost comparison and exit evidence to the private lending service. Emet Capital is a finance broker, not a lender. An enquiry starts a discussion about options; it is not an approval or a commitment to lend.
Related Guides
This article is for informational purposes only and does not constitute financial advice. It is not legal or tax advice.