Private Construction Finance

Private construction finance sits outside the conventional lending system. It is provided by private credit funds, family offices, and high-net-worth individuals rather than banks or licensed deposit-taking institutions. Because the capital is private, these lenders can assess differently and move faster than regulated lenders. The trade-off is a higher cost of capital. This page explains what private construction finance is, when it tends to be considered, and what borrowers should understand about it before exploring this path.

Who Typically Considers Private Construction Finance

• •Developers whose project falls outside bank and non-bank lending criteria due to structure, location, or size
• •Borrowers facing a time-critical situation where standard approval timelines are not feasible
• •Those who have experienced a construction funding gap mid-project and need fast capital to continue
• •Investors with complex structures or credit histories that restrict mainstream access
• •Developers in a distressed project scenario who need fast capital to complete a stalled build
• •Those exploring all available options for a unique scenario before making a decision

How Private Construction Finance Works

Private construction finance is typically structured as an interest-only facility, short-term (6 to 24 months), and secured by a first or second registered mortgage over the property. Because the capital is private, lenders can set their own criteria and move on their own timeline. The primary focus is on equity: the property value, the LVR, and confidence in the exit strategy. Documentation requirements are typically lower than bank or non-bank, but private lenders expect a clean, credible application with a clearly articulated exit. The cost of private capital reflects the speed, flexibility, and risk tolerance these lenders offer.

An example of a unique scenario where private finance played a role: a $4.5M private lender facility was used to rescue a stalled duplex development, fund the completion of the build, and refinance out at practical completion. Read the Five Dock duplex rescue case study to understand the full picture: what made this a private finance scenario, how it was structured, and how the exit was achieved.

What Private Construction Lenders Focus On

• •Equity and LVR: private construction lenders focus heavily on the property value and the loan as a percentage of that value. A strong equity position reduces the perceived risk and supports faster assessment.
• •Exit strategy: how and when will the loan be repaid? Sale of the completed property or refinance to a standard lender are the most common exits. The exit must be credible and achievable within the loan term.
• •Construction stage and cost to complete: for mid-project funding, lenders assess how far the build has progressed, what stage it is at, and what the realistic cost to reach practical completion is.
• •Borrower credibility: private lenders assess the borrower's overall credibility. Not necessarily their income in a standard sense, but their track record, the quality of the project, and the seriousness of the application.
• •Speed of decision: private lenders can often provide an indicative position within 24 to 48 hours for qualified applications, compared to weeks for banks.
• •Documentation: lower than bank or non-bank, but a clean title search, project summary, exit strategy, and basic borrower details are always required.

When Settled Funding Group Can Facilitate an Introduction

1. 1.Joseph Farhat reviews the borrower's position in full: equity, project status, income position, and the specific reasons why bank and non-bank options are not suitable.
2. 2.If the scenario appears suited to a private finance introduction, Joseph Farhat identifies whether an introduction to a private finance specialist may be appropriate for the unique circumstances.
3. 3.Settled Funding Group facilitates an introduction to the private finance specialist. The private lender then conducts its own independent assessment and engages directly with the borrower.
4. 4.The private lender makes its own credit decision. Settled Funding Group's role is an introduction only and does not extend to credit assistance, ongoing management of the private finance arrangement, or recommendations about the private lender's terms.
5. 5.Where bank or non-bank finance is a viable option, Settled Funding Group will pursue that path first. A private finance introduction is for unique scenarios only.

Finance Options in Context

Private Construction Finance Broker

When a construction scenario is urgent, complex, or has been declined elsewhere, knowing where the deal can actually get done matters more than anything. The construction lending market is fragmented across bank, non-bank, and specialist funders, each with different appetites for build type, timeline, security, and borrower profile. Borrowers who chase private finance on their own often have no clear sense of which funders are realistic or what terms are reasonable. A broker who understands the full market, from bank and non-bank construction lenders through to the private finance options that exist for unique situations, can point you in the right direction quickly and stop you wasting time on the wrong path.

Settled Funding Group represents you, the borrower, and arranges construction finance across bank and non-bank lenders. Joseph Farhat reviews your scenario, your timeline, and your security position, then matches it to the right lender from our 90+ panel and negotiates terms on your behalf. For unique, time-critical, or distressed scenarios where bank and non-bank lenders are not the right fit, we can introduce you to private finance options. We prepare and manage the application end to end. As a broker, we are typically paid by the lender on settlement, so in most cases there is no direct cost to you. If your situation is urgent or has been declined elsewhere, talk to us early and we will tell you honestly what is achievable.