What is Private Lending?


Private lending is commonly referred to as "the oldest form of mortgage lending". It is a type of financial intermediation where the borrower and the investors have a more direct relationship than usually applies with a bank or similar financial institutions. In the usual banking relationship, the investor deposits funds with the bank and the borrower obtains finance from the bank. The investor is paid a conservative rate of return and has no knowledge of the particular loans that the deposit is funding.

Traditionally, private lending has operated in a non-bank environment, where individual investors provide the capital required for specific loans. And in its simplest form, there may be one investor providing the capital for one borrower.

Both private lending and traditional banking are regulated prudentially in Australia, but by different government regulators. Private lending is in certain cases(only when it falls within the managed investment scheme regime) regulated by the Australian Securities & Investments Commission ("ASIC"), while the banks are regulated by the Australian Prudential Regulation Authority ("APRA"). Transactions in its simplest format are not regulated by ASIC or APRA.

Did you know...?

Private Lending is also known as "Solictor Funding" or "Private Mortgages" as Solictors used to run larger morgage funds before the introduction of the Managed Investment Scheme regulation by the ASIC.
Moshav Private Funding offer a range of Private Mortgages such as First Ranking Mortgages, Second Ranking Mortgages or unregistered (also known as equitable mortgages) in NSW, QLD, SA, WA, and VIC.
Call us on 1300 361 883 or email us.

 

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Moshav Private Funding is a leading facilitator of Private Mortgages in Australia. We offer a range of Private Mortgage products including First Ranking Mortgages, Second Ranking Mortgages and Caveat Mortgages