Quick answer
Private lending means business finance from non-bank lenders, usually secured by a mortgage or caveat over residential or commercial property. Private lenders judge the security, the purpose and the exit rather than relying only on years of financials, which makes them faster and more flexible than banks. In New Zealand, property-secured private lending runs from $20,000 to $5,000,000, and same-day settlement is possible for smaller amounts.
Key points
- Non-bank lenders focused on security, purpose and exit.
- Faster decisions and more flexible criteria than banks.
- Costs more than bank lending — best for a defined period.
- A plan to refinance or repay should be agreed at the start.
- Amount
- $20,000 to $5,000,000
- Security
- First or second mortgage, or caveat
- Speed
- Same day possible for smaller amounts
- Suits
- Bank declines, tax debt, tight deadlines
“Private lending” covers a wide range of non-bank lenders, from established funds to smaller private investors, who lend against property. For a business that needs to move fast, has been turned down by its bank, or is carrying a complication like tax debt, private lending is often the most direct path to funding.
How is private lending different from a bank loan?
Banks lend at scale with standardised rules. That keeps their costs low, but it also means rigid criteria and queues. Private lenders work case by case.
| Bank | Private lender | |
|---|---|---|
| Main focus | Years of financials, serviceability models | Security, purpose and exit |
| Decision speed | Days to weeks | Hours to days |
| Flexibility | Low — policy rules | Higher — individual judgement |
| Cost | Lower | Higher |
| Typical term | Long | Months to a couple of years |
| Tax arrears or credit issues | Often a decline | Considered case by case |
The trade is simple: you pay more for speed and flexibility, and you use it for a defined period.
How fast can a private loan settle?
Private lenders are often the quickest property-secured option. Same-day funding is possible for $20k to $250k against property when the title is straightforward, a value can be confirmed quickly and your lawyer is ready to sign off. Larger amounts up to $5m are possible within 24–48 hours. Our aim is to have you funded within 24 hours of your first application, and we’ll tell you on the first call if something about your deal will take longer.
What lets a private deal move fast:
- A clear purpose — clearing IRD debt, completing a purchase, funding a contract.
- A clean title — owners known, existing debts known.
- A believable exit — sale, refinance or a firm income event.
- A lawyer on standby — independent advice is required before you sign.
If those sound like your situation, start your application and we’ll confirm the fastest route.
Who does private lending suit?
- Businesses declined by a bank for reasons that don’t reflect the real risk — recent losses, a short trading history, or accounts that aren’t filed yet. See what to do when the bank says no.
- Owners with tax arrears who need to clear IRD quickly.
- Deals with hard deadlines, such as a property settlement or a time-limited supplier offer.
- Borrowers with credit blemishes who have property and a clear plan.
It suits less well where the need is permanent, where the property has little equity, or where there’s no realistic way to repay or refinance within the term.
What does a good exit from private lending look like?
Most private loans are bridges. Before you sign, you should be able to answer: how will this be repaid, and when?
Common exits:
- Refinance to a bank once tax is cleared, accounts are filed or trading has stabilised.
- Sale of a property or asset.
- A large receivable — a contract completion, an insurance payout, a business sale.
An illustrative example: a Wellington consultancy owes IRD $95,000 and its bank won’t extend while the debt is outstanding. A private second mortgage clears the arrears; over the next nine months the firm files its accounts, shows two clean GST periods and refinances to its bank. The private loan did one job and finished. (Illustrative only.)
Our guide to planning an exit from short-term finance covers this in more depth.
How do I compare private lending offers?
- Ask for every cost in dollars: establishment, legal, valuation, interest for the expected term.
- Check minimum terms or early repayment charges — they matter if you plan to refinance early.
- Read the default clauses carefully.
- Make sure the term comfortably exceeds your realistic exit date.
What does a private lender check first?
Private lenders tend to ask four questions, roughly in this order:
- Is the security sound? Title, value, existing debts and who owns it.
- Is the purpose clear and sensible? Clearing tax, completing a purchase, funding a contract.
- Is the exit believable? Sale, refinance or a firm payment event.
- Can the borrower meet any ongoing payments? Statements and trading.
Get those four answered on the first call and a private deal can move very quickly.
How is private lending repaid?
Most private business loans are repaid in one of three ways: regular repayments of interest with the principal repaid at the end, regular repayments of both, or charges added to the loan and repaid in full at the end. Which suits depends on your cash flow and exit. If the exit is a sale or refinance in a few months, a structure with lower ongoing payments and a lump sum at the end may suit. If the business can comfortably make payments from trading, reducing the balance as you go lowers the total cost. Ask for the dollar cost of each option before choosing, and make sure the term comfortably covers your exit.
Is private lending only for property owners?
Mostly, yes. Private lenders in business finance usually rely on property security. Without property, an unsecured business loan or cash flow loan sized on turnover is the more likely route.
See if private lending is your fastest route
When the bank can’t move fast enough, or won’t move at all, private lending can get your business funded within a day or two. Apply in about 60 seconds to find out. Asking costs nothing and doesn’t touch your credit file, we keep your file with one specialist rather than circulating it, and a real person calls to talk through security and exit. Being upfront about the property, any IRD debt and your repayment plan is the quickest way to the right lender.
Frequently asked questions
Is a private lender safe to deal with?
Reputable private lenders set out every fee and term in writing, require you to get legal advice before signing, and register their security through proper channels. Be wary of anyone who pressures you to sign without a lawyer.
Why would I use a private lender instead of my bank?
Speed and flexibility. Banks generally want full financials, clean tax affairs and longer approval times. Private lenders can act on a clear purpose and good security, even when the bank's boxes aren't all ticked.
How long do private loans usually run?
Often months to a couple of years. They're typically designed as a bridge back to a bank or to a sale, rather than as permanent funding.
Can a private lender help if I have IRD debt?
Often, yes. Tax arrears are one of the most common reasons businesses turn to private lending. Disclose the full debt upfront.