The Benefits of Private Funding

Updated: Sep 15, 2021

As home-owning investors and refinancers, you might have heard the term ‘private funding’, but maybe you’re not sure of what it means or need a quick refresher on the process?

Well, you’re in the right place.

With over 30 years of experience, AAA Mortgages are very experienced with various financial situations, so we created this article to provide a general overview and its benefits.

In this article, we will cover:

  • What private funding is

  • How you can benefit from it.

  • How to get a private mortgage

Any additional financial questions? Click here to find out how AAA Mortgages can help you today!

What is private funding?

At its core private funding, or private mortgages, are residential or commercial loans termed from one month to twelve, gathered from private entities instead of traditional lenders. Usually, these organisations tend to be quicker than the banks, with customers speaking directly to the lender instead of waiting for approval.

Aside from speed and short-term limits, the most known reasons for opting for private funding include:

  1. Poor credit

  2. Or your accountant has not completed your tax returns as required by the bank.

The approval process from these companies are typically more flexible than the banks- as the latter could decline applications that don’t meet its current lending criteria, while private lenders look beyond this and consider additional factors to present clients with more sympathetic and realistic options.

In fact, the primary conditions to them are as follows:

1. Your current real estate’s equity. Private lenders assess loans based on their risk lending against your property’s value-- no matter if it’s residential, commercial or investment.

2. You need to have a repayment plan, or exit strategy, and will need to tell the lender about it. Depending on the property type, the plan will be different. We strongly recommend knowing this before speaking to a lender.

If you meet sufficient equity, the underlying asset is usually considered security for approval over the borrower’s potential credit risk or perceived character.

The benefits

In addition to the above, the advantages of using private mortgages are as follows:

  • Low document (low-doc) or no document options

  • Quick application approval, especially if online

  • The repayment structure is up to the client

  • Interest rates also are up to the client and their needs

  • Loan amounts range from $20,0000 to $5,000,000

So you’ve decided to opt for private funding. How do you get it?

AAA Mortgages offers extensive private funding services with 25 lenders on our panel to ensure you receive the best deal for your requirements.

Our short-term bridge loans last up to 12 months at a maximum 80% LVR, with 90% LVR for development and construction finance- both available with lo-doc and no-doc options.

Additionally, our turnarounds are quite fast, with letters of offer obtained within a working day and the settlement process from start to finish within three weeks.

In fact, we can organise short-term finance in as little as 24 hours.

Want to speak to us today about arranging a short-term loan? Click here to book a free 1 hour appointment with our experts today

Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstances and requirements.