Private lending as a real plan B, not a last resort

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A new wave of complex deals is finding its way to private lenders – here’s how brokers can spot them early, structure them well and close with confidence

MOST BROKERS only realise a deal doesn’t belong with a bank when settlement pressure mounts and the deal stalls. By then, valuations coming in short, undisclosed liabilities and incomplete tax returns have usually come to light. The true skill is reading those warning signals in the first client conversation and steering the borrower straight to a private lender that can take the pressure off and buy the borrower time. For Laura Stanley, co-leader of Assetline Capital’s private lending division and former NSW state manager at the non-bank lender, the signals are almost always sitting at the intersection of a strong security and stressed cash flow. 

Assetline Capital, an AltX Financial Group company, is an institutionally funded Australian non-bank lender servicing brokers and borrowers who value responsive turnarounds, a flexible approach and funding certainty. Since 2012, the AltX Financial Group has funded more than $6.5 billion worth of property-backed transactions Australia-wide for property professionals, small to medium-sized businesses and SMSFs. With offices in Sydney, Melbourne and Brisbane, Assetline offers long-term mortgages, private lending, construction and development finance and bridging loans against property assets in major metropolitan locations.

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“We see ourselves as the second-chance lender. When things are not lining up for your borrower, come to us – we can clear ATO debt, stabilise their position and help set them up to transition back to the banks”

Laura Stanley, Assetline

“Typically, the borrower is asset-rich with strong security, but unable to clearly demonstrate income. They often have complex commercial structures, and in many cases, their tax returns aren’t up to date,” she says. Australian Taxation Office (ATO) debt is another clear signal that the deal no longer belongs at a bank as they will not rank behind the ATO, but private lenders can step in, pay out the debt and give the borrower time to get their affairs in order. Stanley describes this as a second-chance role that Assetline has deliberately embraced. “We’re almost like that lifeline lender,” she says. “We play the role of that second-chance lender by paying out that ATO debt, helping borrowers to get their affairs back in order and ultimately positioning them to go back to the bank. More often than not, they genuinely are bankable clients. They’ve just found themselves in a difficult spot due to their circumstances or a compelling event.” For brokers doing an initial assessment, Stanley recommends a straightforward checklist: Is there equity? Is it an investment property or commercial asset? Does the borrower have an existing trading Australian Company Number? Is there a genuine business purpose? “If the broker can identify that there’s equity, a genuine cash flow problem that prevents servicing, and it’s a genuine commercial and business purpose, chances are private lending would be a suitable solution for them,” she explains. “At the end of the day, a broker’s role is to provide the borrower with the right solution.” When brokers treat those early clues as a triage tool, they can match asset-rich but cash flow-constrained clients with short-term, property-backed loans built around clear and plausible exits and open disclosure. That shift in thinking is what is moving private lending from a last resort to what is becoming a mainstream solution in Australia’s commercial finance market. Private lending is sometimes assumed to be a soft option where asset value alone is enough to get a deal across the line. Stanley pushes back on that view firmly, saying brokers often make things harder for themselves by focusing on the serviceability hurdle rather than on the asset itself. “The asset – the underlying bricks and mortar that we’re lending against – is absolutely everything. Private lending is about delivering a derisked, property-backed loan supported by a clear exit strategy and a story that makes sense,” she says. The questions Assetline asks from there are simple, but each one carries weight. “At the core, a private lender is asking one thing,” Stanley says. “How do we get our money back quickly, cleanly and without any nasty surprises?”

What makes a deal work from a credit perspective This breaks down into three areas. First, the quality and liquidity of the security. “We avoid highly specialised, non-metro regional securities,” Stanley explains. “They’re not liquid assets, and they can sit on the market for months.” The second consideration is the exit strategy. The loan term needs to be realistic, and the exit needs to be plausible given the borrower’s actual circumstances. “What’s going to change for the borrower to improve their cash flow position to then refinance and exit? The whole idea of taking on a new facility in any shape or form is to improve the borrower’s position, not to worsen it.”

Third is transparency, and it matters more than many brokers realise. “Regardless of the lending environment, if the lender can’t verify the story or verify the information provided, then we cannot fund the deal,” Stanley says. 

“I see private lending evolving into a true plan B – a credible, appropriate solution that brokers can use confidently when deals fall outside traditional banking policies”

“There’s an assumption that a no-doc loan means it’s going to be 24-hour settlement, no questions asked. In reality, no-doc means there will be no income requirements, because there’s probably more paperwork and more due diligence around the assets,” she explains. 

“I see private lending evolving into a true plan B – a credible, appropriate solution that brokers can use confidently when deals fall outside traditional banking policies.” “Making sure brokers are educated, well equipped and knowledgeable enough to confidently execute a private lending transaction is why we’ve identified the growth,” Stanley adds. “There’s unnecessary, negative connotation about private lending, which is unwarranted. It’s saved more people than it’s harmed.” The appetite is there, and so are the deals. For brokers willing to learn the discipline behind private lending, the opportunity is clear.

Published 21 Apr 2026

Laura Stanley, Assetline

The most common deals that don’t fit the mould Brokers who are new to private lending often find it easier to start by recognising deal types that regularly appear in this space. Stanley identifies residual stock as the most prevalent right now. “When they’ve got a short tenure, the banks are not interested as there’s limited upside for them,” she says. “That is the reality of what we are seeing.” 

A deal that shows how it works Sometimes a single transaction illustrates the private lending proposition better than any checklist. A Sydney developer faced a potential $25 million default over a building compliance issue. Six completed units across two prime locations were ready to settle, unconditional presales were in place, and a strong track record was behind him. The only obstacle was an occupancy certificate held up by a minor measurement shortfall. With the existing facility at the end of its term and a conventional lender unable to move in time, Assetline stepped in with a short-term extension. “We were able to get the clients out of a very tight spot,” says Stanley. “We extended three months. The LVR was low, there were unconditional contracts of sale in place, the client managed to go through the Christmas period, got his occupancy certificate in place, and now we are refinancing.” The conventional route was never going to work in the time frame, Stanley says. The numbers simply didn’t allow for it. “Even a basic servicing assessment shows how much income would have been required and the length of time it would have taken to go through the commercial process to demonstrate servicing. The time it would have taken to reach a decision at a traditional bank, the client would’ve been in default.”

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Next are working capital borrowers: asset-rich clients who need to access equity in their property for genuine business purposes but cannot fit that need into the restraints of regulated mortgage lending. “In today’s highly regulated lending environment, working capital just doesn’t tick the box in a traditional 30-year mortgage lending space,” Stanley explains. “So often you’ll see borrowers trying to frame requests as ‘I need money for non-structural renovations’. But there’s a limit to how many non-structural renovations make sense. The underlying reason is usually for working capital.” Assetline’s non-regulated facility allows borrowers to access the equity in their homes or investment properties to grow their businesses, whether that means buying stock, purchasing equipment or stabilising cash flow. For some clients, the appeal is less about accessing cash directly and more about the reprieve it gives them. “Because we offer that facility with no income requirements and no monthly payments, borrowers can use a payment pause sometimes up to 12 months, which allows them to take advantage of the equity in their property and relieve pressure on their cash flow,” Stanley says. 

Why deals fall over at the last minute For Stanley, the case for educating brokers about private lending goes beyond deal flow. It’s about removing what she sees as an unfair stigma attached to a product that has delivered strong outcomes for borrowers. The private lending market in Australia has changed considerably, with rates that once sat north of 13% having come down substantially. “You now see rates starting in the sevens, and it makes private lending a very acceptable space to operate in,” she says. 

Common failure points Even deals that look strong at the outset can unravel close to settlement for reasons that could have been identified earlier. Stanley identifies four main common failure points, with valuation shortfalls by far the most frequent. To avoid late surprises, she suggests brokers conduct live research during the initial call, checking Cotality data, Nearmap and realestate.com.au in real time. That helps surface potential valuation problems early rather than after a formal assessment is underway. The second failure point is undisclosed information, whether it’s discovered in a credit file, a director check, or a caveat on a property, which often only emerges when solicitors review the documentation. The third is the misconception that character is irrelevant in private lending because the loan is property-backed. Assetline takes a different view. “Character matters,” Stanley says. “We take a considered view on who we’re lending to. If a borrower isn’t someone we’d feel comfortable engaging with directly in a downside scenario, it’s not a deal we’ll pursue.” The fourth failure point is irrational borrower behaviour during the process. Stanley is clear that Assetline will walk away from a transaction if a borrower becomes abusive, unreasonable or difficult to deal with. “Irrational borrower behaviour is a massive red flag. As a lender we reserve the right to withdraw our offer at any point,” she says. “We don’t take that lightly; we’re upfront with all the due diligence that we do. But when that behaviour becomes abusive or unreasonable we won’t proceed with the transaction.” Stanley also cautions against a widespread misconception about settlement speed. Private lending is faster than a bank, but it’s not instant. 

The broker’s role in all of this Stanley believes private lending is steadily moving from a third option to genuine second in the broker toolkit, and Assetline has formalised its Private offering as a dedicated division to support that shift.