Private credit in Australia

What is private credit?

Private credit is the asset class covering all lending provided by non-bank financiers. The lender uses private capital (wholesale investor money, family-office balance sheets, fund vehicles) rather than retail deposits. In Australia, the dominant sub-category is real-estate-secured private credit: registered first and second mortgages over residential, commercial and land security.

The asset class also covers corporate private credit (direct lending to mid-market companies) and asset-based finance, but property-secured lending is what most Australian borrowers and brokers encounter when they hear "private credit".

How private credit works in Australia

A borrower submits a file (typically through an accredited mortgage broker). The lender's credit team reviews the security, the sponsor, the exit and the timing. Indicative terms come back fast. On approval, the lender registers a mortgage over the security property, advances the principal, and is repaid at the exit — usually a property sale, a bank refinance, or a business event that frees capital.

Loan terms are short-dated by design. Months, not decades. The credit lens looks for a documented exit; private credit is not a long-term holding product. Interest is typically capitalised on bridging files (added to the balance, paid at exit) and serviced monthly on longer-term first mortgages where the borrower's cashflow supports it.

Private credit vs bank lending

Side-by-side detail: private credit vs bank lending. In short, banks win on rate and term for files that fit their policy. Private credit wins on speed, structuring flexibility and capacity to write files the banks decline on policy rather than on credit risk.

How is private credit regulated?

Australian private credit lenders operate under an Australian Financial Services Licence (AFSL) issued by ASIC, not under APRA prudential regulation. AFSL holders are bound by conduct obligations under Chapter 7 of the Corporations Act, hold professional indemnity insurance, and are members of an external dispute resolution scheme (AFCA).

Most private credit in Australia is written for business or investment purposes. That puts it outside the National Consumer Credit Protection Act 2009 (NCCP) but inside the AFSL conduct framework. Borrowers regulated under the NCCP (owner-occupier home loans) are not the target market for private credit.

Archer Wealth lends under AFSL 548263, held by Archer Wealth Capital Pty Ltd.

Who borrows in private credit?

• Property investors and developers who need a speed or structure the banks cannot match — a bridging gap, a quick settlement, a release of equity ahead of a separate refinance.
• Self-employed business owners whose income evidence does not fit standard bank serviceability rules even though the underlying business is profitable and the equity position is strong.
• SMEs needing short-dated working capital against a property asset, with a clear exit on a contracted receivable, sale or refinance.
• Borrowers in transition — moving between facilities, between lenders, or between property positions — where the bank cannot match the timing window.

Who invests in private credit?

On the capital side, private credit is funded by wholesale and sophisticated investors (s708 Corporations Act), family offices, private credit funds and mortgage trusts. The asset class has grown rapidly in Australia over the last decade as bank balance sheets retrenched from non-conforming and short-dated lending under post-GFC capital rules.

Investors are drawn by yield (typically above term deposits and listed credit), real-estate security, and the short-duration nature of the underlying loans. The risk is the standard credit risk of a property-secured book plus illiquidity relative to listed markets.

What does private credit cost in Australia?

Indicative pricing from Archer Wealth:

• First mortgage residential: from 6.99% p.a. on prime metro security with conservative LVR.
• First mortgage commercial: from 7.99% p.a. on prime commercial security.
• Bridging: from 6.99% p.a. on prime first mortgage security, capitalised interest, establishment fee from 1.25% of the facility.
• Second mortgage: above first mortgage rates to reflect the junior security position.

These are indicative ranges; actual pricing on any specific file is set by the credit team based on the security, sponsor, exit and live portfolio position.

How to access private credit

Archer Wealth lends exclusively through accredited mortgage brokers. If you do not have a broker, the borrowers hub matches you to one of our partners covering your postcode within one business day. Submit a scenario for same-day indicative terms.

Frequently asked

• What is private credit?
  Private credit is lending provided by non-bank financiers, funded by private capital rather than by bank deposits or the wholesale debt market. In Australia, the bulk of private credit is real-estate-backed lending: first and second mortgages, bridging, development finance and commercial property loans. Some private credit is corporate or asset-finance focused.
• How is private credit different from a bank loan?
  Private credit lenders are not deposit-taking institutions, so they are regulated by ASIC under an Australian Financial Services Licence (AFSL) rather than APRA. They can apply commercial judgement to files the banks decline on policy, decision faster, and structure to the exit rather than to long-dated serviceability. The trade-off is that pricing is higher to reflect the cost of private capital and the shorter-dated nature of the facilities.
• Is private credit regulated in Australia?
  Yes. Private credit lenders operate under an AFSL issued by ASIC. AFSL holders are subject to ongoing conduct, dispute resolution and capital obligations, hold professional indemnity insurance, and are members of an external dispute resolution scheme (typically AFCA). Borrowing for business or investment purposes sits outside the National Consumer Credit Protection Act but inside the AFSL conduct framework.
• Who borrows in private credit?
  Three main borrower archetypes. Property investors and developers needing speed or structure beyond what the banks can match. Self-employed business owners whose income evidence does not fit standard bank serviceability calculators. And owner-operators bridging a timing gap — settlement before sale, refinance gap, planning approval window.
• Who invests in private credit?
  Capital flows from wholesale and sophisticated investors via private credit funds and mortgage trusts, family offices investing directly, and high-net-worth investors taking exposure through pooled vehicles. The asset class has grown rapidly in Australia over the last decade as bank balance sheets retrenched from non-conforming and short-dated lending.
• What does private credit cost?
  Indicative rates from Archer Wealth start from 6.99% p.a. on prime residential first mortgages and from 7.99% p.a. on commercial first mortgages. Second mortgages and short-dated bridging facilities price above that. Establishment fees on bridging start from 1.25% of the facility. The premium over a bank loan reflects the cost of private capital and the structuring flexibility.
• How fast can private credit settle?
  Indicative terms typically come back the same business day on a clean scenario. Formal approval within a few business days. Settlement, including valuation and legals, within 5 business days on cleaner files. More complex files (commercial security, development, first-mortgage-holder consent on a second) run 1 to 3 weeks.
• What are the risks for borrowers in private credit?
  Pricing is higher than a bank, so the cost has to make sense against the value of the transaction. Files are short-dated by design and require a credible exit (sale, refinance, business event) — borrowers should plan the exit at entry, not after drawdown. Property-secured lending carries the risk of loss of the security on default.