Key Takeaways
- •Private lenders approve in 24 hours vs 6-8 weeks for banks
- •Banks require full financials; private lenders assess on property value
- •Private lending costs more but delivers speed and certainty
- •Best approach: use private lending for speed, refinance to a bank later
When Australian businesses need capital secured against property, they face a fundamental choice: go to a bank or go to a private lender. The answer is not always obvious, and the right choice depends entirely on your circumstances, timeline, and what you are trying to achieve.
This guide breaks down the key differences between bank lending and private lending so you can make an informed decision.
Speed of Approval
This is the single biggest difference. Banks typically take 4 to 8 weeks to approve a commercial property loan. Private lenders can approve in 24 hours. If your deal has a time constraint — an expiring option, a settlement deadline, an auction — the bank timeline may simply not work.
At Alphacon Capital, we provide same-day indicative terms and target settlement within 2 to 4 weeks from application. For urgent scenarios, we have settled in as fast as 5 days.
Documentation Requirements
Banks require full financial disclosure: tax returns, profit and loss statements, balance sheets, accountant letters, bank statements, and often a business plan. The documentation burden alone can take weeks to compile.
Private lenders assess primarily on property value and exit strategy. At Alphacon Capital, several of our products accept self-declared income — no accountant letters, no tax returns, no financial statements. This dramatically reduces the time from application to approval.
LVR and Security Assessment
Banks calculate LVR conservatively and often apply additional haircuts based on postcode, property type, and borrower profile. They may also require mortgage insurance above certain LVR thresholds.
Private lenders typically offer higher maximum LVRs with less conservative valuation approaches. Alphacon Capital offers up to 75% LVR on most products and accepts a broader range of security types including second mortgages through our Reach product. Use our LVR calculator to see where your deal sits.
Flexibility and Structure
Banks operate within rigid policy frameworks. If your deal does not fit their template — unusual income, complex structure, multiple securities across different postcodes — the answer is usually no.
Private lenders are built for non-standard deals. Complex multi-security structures, credit-impaired borrowers, regional postcodes, second mortgages, owner-builder scenarios — these are the deals private lenders specialise in. Our product suite covers everything from standard bridging (Resolve) to progressive drawdown for construction (Flexi) to nationwide coverage for complex structures (Reach).
Cost Comparison
Banks are cheaper. There is no way around this. Bank interest rates for commercial property loans typically range from 5% to 8% per annum. Private lending rates are higher — reflecting the speed, flexibility, and risk profile of the loans.
However, cost must be measured in context. A bank loan that takes 8 weeks to approve may cost you a deal worth far more than the interest saving. A private loan that settles in 5 days and secures a property at a significant discount can deliver a net return that far exceeds the additional interest cost.
The real cost comparison is not rate vs rate — it is total cost of the outcome, including what happens if you cannot access capital in time.
When to Use a Bank
Use a bank when you have time, clean financials, and a straightforward deal. Long-term holds, standard purchases with no time pressure, and refinancing into permanent facilities are all bank territory.
When to Use a Private Lender
Use a private lender when speed matters, documentation is an issue, or the deal does not fit bank criteria. Time-sensitive acquisitions, bridging between transactions, credit-impaired borrowers, complex structures, and working capital needs are all private lender territory.
The Hybrid Approach
The smartest borrowers use both. They use a private lender for speed — to secure the deal, settle the purchase, or bridge the gap — and then refinance to a bank once the time pressure has passed. This captures the best of both worlds: the speed and flexibility of private lending combined with the long-term cost efficiency of bank lending.
At Alphacon Capital, many of our borrowers follow exactly this model. We provide the short-term capital to get the deal done, and the borrower exits to a bank within 6 to 12 months. It is a proven strategy that works.
Next Steps
If you are weighing up your options, start with our free AI Loan Assessment tool. It will tell you instantly whether your deal fits our criteria, which product suits, and what the indicative costs look like. No sign-up, no obligation. Or browse our products page to compare our four lending products side by side.