Hard money loans in Australia: what the term means here, and what to ask for instead

“Hard money loan” is an American phrase. It describes a short-term loan secured by real estate, priced on the asset rather than the borrower's tax returns, and funded by a private lender who can move in days rather than months. Australians search for the term because it is memorable and because the need it describes is universal. What they find is mostly US content that does not map cleanly onto how property-secured lending works here.

This article translates. It explains what a hard money loan is in Australian terms, who can use one, what it is actually called when you ask a broker for it, and where the US playbook simply does not apply.

What Australians call it

The local vocabulary is private lending, private credit or non-bank commercial lending. The product names are more specific again: a private first mortgage, a second mortgage, a bridging loan, construction finance or a renovation and flip facility. If you ask an Australian broker for a hard money loan they will know what you mean, but the term sheet will say “first mortgage” or “second mortgage”.

The economics are the same as the US version. The lender underwrites the security and the exit first, the borrower second. Settlement is measured in business days. The term is short — months, not decades — and pricing reflects the speed and the risk. Where Australia differs is in who can borrow this way andhow the security is held.

The three differences that matter

1. The borrower has to be an entity, and the purpose has to be business

In the United States hard money is routinely lent to individuals. In Australia, credit to a natural person for personal purposes or residential investment is consumer credit under the National Credit Code, and only a licensed credit provider can offer it under the responsible-lending regime. Private lenders avoid that regime by lending to companies and other body corporates for business or investment purposes. That is why every loan we arrange is to a Pty Ltd company, a corporate trustee or a partnership, and why every borrower signs a Business Purpose Declaration before drawdown. An individual wanting to borrow against their own home is outside the market entirely.

2. Security is a registered mortgage, not a deed of trust

US hard money lenders typically secure against a deed of trust and foreclose through a trustee. Here the lender takes a registered mortgage over the title through the state land registry, settled electronically via PEXA. A first mortgage ranks ahead of everyone; a second mortgage ranks behind the existing lender and needs that lender's written consent. Some Australian lenders also offer caveat loans secured by an unregistered caveat — faster to lodge, weaker in priority — which is a structure we do not arrange. Our article on second mortgages versus caveat loans explains the trade-off.

3. Loan-to-value conventions are more conservative

US hard money commonly runs to 65–70% of the after-repair value. Australian panel lenders typically work to around 75% of the current or as-if-complete value on a gross basis, with construction facilities sized against the gross realisation value and drawn progressively against quantity-surveyor certificates. The number moves with the quality of the security, the location and the exit, which is why no serious lender advertises a fixed LVR or a fixed rate.

What a hard money loan looks like in practice here

• —A settlement bridge. A Pty Ltd buyer has exchanged unconditionally and the bank will not approve in time. A private first mortgage settles the purchase; the bank refinances it months later.
• —Capital against equity. A trading company owns its premises with a low-rate bank first mortgage it wants to keep. A second mortgage releases equity for an acquisition, a tax liability or working capital without disturbing the first.
• —A build without presales. A developer SPV has a DA and a fixed-price contract but the bank wants presale cover it does not have. A private construction lender funds against the completed value.
• —A flip. A renovation business buys, improves and resells within a year on a facility that funds both the purchase and the works.

The sample deals page walks through illustrative versions of each.

Who funds it

Three kinds of capital sit behind Australian private lending: specialist non-bank commercial lenders that write property-secured business loans every day, pooled mortgage funds, and private investors — sophisticated individuals and family offices who lend their own money against a registered mortgage. A broker with a panel across all three can match a deal to the funder whose appetite fits it, which matters more in private credit than in bank lending because each funder's mandate is narrow. We do not lend ourselves; arranging is the whole job.

What it costs, and why nobody publishes a rate

Pricing is set deal by deal. The same property can attract different terms from different funders depending on LVR, term, location, the strength of the exit and how clean the file is. Published “from” rates in this market are marketing, not offers. What you can rely on is that indicative pricing is disclosed in the term sheet before you commit to anything, and that the fee structure — brokerage, lender fees, valuation, legal and registration costs — is set out in the mandate you sign before work starts. Our fees page lists each one.

How fast is fast?

A clean file typically settles in 5–10 business days from the term sheet. Settlement inside 24 to 48 hours is achievable, but only when the borrower's solicitor can sign the same day, the valuer can get into the property immediately and every query is answered as it lands. Speed is a function of borrower-side readiness as much as lender turnaround — the process page sets out what each step needs from you.

How to ask for one

Whatever you call it, a broker needs five things to get indicative terms:

• —The borrowing entity — name, ABN or ACN, and who the directors are.
• —The security property — address, current owner, latest valuation if any, existing mortgages.
• —The amount, the term and the business purpose of the funds.
• —The exit — refinance, sale or incoming funds, with a realistic date.
• —Anything a lender will find anyway: tax debt, a prior default, a tight settlement date.

That is enough for a read on fit within one business day and indicative terms typically within 24–48 hours. Formal offer needs the standard documentation pack, which we list after the first conversation.

Why this site is called hardmoneyloans.au

Because that is what people type. The domain is the colloquial term; the service is private credit arranged by a commercial finance broker for Australian entity borrowers, under the brand Private Credit Loans. If you have a property-secured business deal in front of you, start an enquiry and we will tell you quickly whether the private market is the right place for it.