Private vs Bank Lending: Which One is Right for You?

Not all borrowers fit neatly into a bank’s credit policy, and not all loans need to come from a bank. In today’s lending landscape, private and non-bank lenders have become essential alternatives for business owners, property investors, and anyone needing speed, flexibility, or custom structures.

In this guide, Azura Financial compares private lending and traditional bank loans to help you decide which option suits your financial goals.

“Private lending used to be a last resort. Now, it’s a strategic tool. For the right client and use case, it can unlock opportunities that banks simply can’t match.” Tom Hawley, Director, Azura Financial

1. What Is Private Lending?

Private lending refers to loans funded by individuals, private companies, or non-bank institutions, rather than mainstream banks.

[h3] Common features include:

• Asset-based or equity-based approvals
• Shorter terms (often 3 to 36 months)
• Faster settlement
• Flexible documentation and structures

Private lenders are typically used for bridging, development funding, refinancing under pressure, or where time is critical.

2. How Do Bank Loans Differ?

Banks assess loans using traditional credit policy, which includes:

Typical bank requirements:

• Full financial disclosure (tax returns, income statements)
• Rigid serviceability criteria
• Longer approval times (7 to 21+ days)
• Lower interest rates, but less flexibility

Banks are ideal for low-risk borrowers with standard income and strong documentation, especially where time is not an issue.

3. When Is Private Lending a Better Fit?

Consider private or non-bank lending when:

• You need to settle fast
• You are self-employed with non-traditional income
• The loan purpose is complex (e.g. development exit, caveat loan)
• A bank has declined your application due to rigid policy
• You need a loan structure the banks won’t support

Azura Financial works with a curated panel of trusted private lenders—helping you secure short term funding with exit strategies and cost control in place.

“We’ve helped clients secure a $2 million bridging facility in 72 hours, when the bank said no. The key is knowing which lender will back the scenario—and negotiating strong terms.”
Ben Hawley, Director, Azura Financial

4. Pros and Cons: Bank vs Private Lending

Feature	Bank Lending	Private Lending
Approval time	1 to 3 weeks	1 to 3 days
Interest rates	Lower (variable or fixed)	Higher (short term pricing)
Documentation	Full income and credit checks	Often low-doc or asset-based
Flexibility	Limited	High – —custom loan terms available
Maximum LVR	80% (sometimes higher for specific buyers)	Often up to 75% depending on risk
Loan term	1 to 30 years	3 to 36 months
Ideal for	Clean, standard loans	Urgent, complex, or non-conforming scenarios

5. What Does Private Lending Actually Cost?

Private loans typically come with:

• Higher interest rates
• Lender and legal fees
• Shorter terms (which means faster exit planning is essential)

However, for many borrowers, the value lies in speed and opportunity, not just price.

Azura Financial ensures all costs are disclosed upfront, and where appropriate, positions private loans as bridge finance toward a longer term bank refinance.

6. Who Uses Private Lending Successfully?

Common use cases at Azura Financial:

• Developers needing short term funding without presales
• Business owners with complex trust or company structures
• Investors leveraging equity between property transactions
• HNW individuals seeking tailored terms with minimal paperwork
• Clients refinancing under time pressure due to bank delays or expired terms
  

Our team negotiates directly with lenders, builds exit strategies, and ensures private loans are used strategically, not reactively.

Summary Checklist: Should You Consider Private Lending?

Scenario	Private Lending	Bank Lending
Need funds within 5 business days	✔	✘
Cannot provide full financials	✔	✘
Clean credit and time to wait	✘	✔
Require LVR over 80%	✘ (most stop at 75%)	✔ (FHB options available)
Complex structure or trust entity	✔	✘
Development or bridging scenario	✔	✘

Final Word

Private lending is not a replacement for bank finance—but it’s a powerful alternative when used with the right strategy and structure. For investors, business owners, and clients who value speed or flexibility, it can open doors that banks can’t.

At Azura Financial, we compare both private and bank options based on your goals, and help you choose the solution that works in the real world—not just on paper.Need a custom lending solution fast?
Speak to Azura Financial about structuring the right facility with the right lender—bank or private.