Quick answer
If your bank can't fund the purchase of your business premises by the settlement date, a short-term private loan can settle on time and be repaid when the bank's approval comes through. Usually that's a short-term first mortgage over the premises you're buying, sometimes with a second mortgage or caveat over another property for extra security. The key is moving in the first two or three days, not the last two.
Key points
- A short-term first mortgage can settle the purchase, then be refinanced by the bank.
- Extra security over another property can fill any gap in the equity.
- Up to $5 million can be possible within 24 to 48 hours once paperwork is complete.
- The vendor must give you a clearance certificate, or you withhold part of the price.
- Ask for an extension at the same time — two plans beat one.
You signed the contract on the building your business has been renting for years, or the warehouse that finally fits the operation. The deposit is paid. The bank said yes in principle. Now settlement is ten days away and the bank’s credit team still wants another set of financials, the valuer hasn’t been out, and nobody will commit to a date.
You’re not alone. Commercial approvals take time, and contract dates don’t wait. The good news is that ten days is enough to settle with a short-term private loan — if you start now and don’t spend a week hoping the bank catches up.
What are your options when the bank runs late?
There are really four moves. Most owners end up using two of them at once.
| Option | What it involves | When it fits |
|---|---|---|
| Ask the vendor for an extension | Your solicitor requests a later date, sometimes for a fee or penalty interest | The vendor is relaxed and the bank is only days behind |
| Short-term first mortgage over the premises | A private lender settles the purchase, the bank refinances it later | The bank is weeks behind, or its approval is uncertain |
| First mortgage plus extra security | As above, with a second mortgage or caveat over another property | Your deposit is modest compared with the price |
| Bridging finance | A short-term loan repaid from a sale of another property | You’re selling one property to buy this one |
Asking for an extension costs nothing to try, so do it straight away. But don’t rely on a yes. Run the private loan in parallel so that if the vendor refuses, or the bank slips again, you can still settle on the day.
If a sale elsewhere is part of your plan, our page on bridging loans for business premises explains that structure in more detail.
How does a short-term first mortgage settle the purchase?
It works much like a bank loan, just faster and for a shorter term. The private lender lends against the premises you’re buying, registers a first mortgage at settlement, and pays the vendor alongside your deposit. A few months later, once the bank’s approval is finished, the bank refinances the private loan and becomes the first mortgagee.
Because short-term loans are designed around an exit, we’ll want to see why the bank is delayed and what’s left to complete. A letter or email from the bank, or from your broker, setting out what’s outstanding is useful evidence.
Property-secured business loans run from $20,000 to $5,000,000, against residential or commercial property. Our first mortgage page covers the structure in more depth. When you’re ready, lay out the deal for us — a quick enquiry, with no credit check to start.
When does a second property come into it?
The premises alone may not be enough security if your deposit was small. Stamp duty, legal costs and any fit-out all add to the money needed at settlement, and business.gov.au lists deposit, stamp duty and legal fees among the higher upfront costs of buying rather than leasing.
If the gap is too large for the premises on their own, we may take extra security over another property — often your home or an investment property:
- In Victoria, that extra security can be a caveat.
- In every other state and territory, it’s a short-term registered second mortgage behind the existing bank loan, usually arranged just as quickly.
When the bank refinances, the private loan is repaid in full and the extra security comes off as well.
Your ten-day plan, day by day
Days 1–2: start both tracks. Ask your solicitor to request an extension. At the same time, send the private lender the contract, your deposit receipt, the bank’s outstanding-items list, ID, recent business bank statements and details of any other property you can offer. Our settlement speed page shows what each stage involves.
Days 2–4: valuation and title. We order a valuation of the premises, and of any extra property, and our solicitor checks the titles. Make sure the agent can give the valuer access quickly.
Days 4–6: approval and documents. Loan documents are issued. Every borrower, guarantor and registered owner of any security property signs. If a co-owner is interstate or travelling, arrange signing and witnessing now.
Day 6: check the vendor’s clearance certificate. The ATO says Australian resident sellers must give the purchaser a clearance certificate at or before settlement. For contracts from 1 January 2025, if the purchaser doesn’t receive one, the purchaser must withhold 15% of the price. That changes your settlement figures, so ask your conveyancer to confirm the certificate is in hand.
Days 7–9: settlement booking. Your conveyancer, the vendor’s representative and our solicitor book settlement and balance the figures.
Day 10: settle. The private loan funds, the vendor is paid, and the keys are yours.
An illustrative example
Made-up scenario, rounded numbers.
An Adelaide printing business is buying the industrial unit it currently leases. The price is $900,000 and the owners paid a $90,000 deposit. With duty and costs, they need about $870,000 at settlement. Their bank wants another fortnight at least.
A short-term first mortgage of $585,000 over the unit — about 65% of its value — covers most of the gap. The remaining $285,000 comes from a short-term registered second mortgage over the owners’ home, which is worth $1,300,000 with a bank loan of $500,000. That takes total borrowing on the home to about 60% of its value.
Settlement happens on the contract date. Seven weeks later, the bank’s approval comes through, the bank refinances the unit, the private first mortgage is repaid, and the second mortgage over the home is paid out and removed.
How do you keep the bank’s refinance on track afterwards?
Settling with a private loan solves the deadline, but the short-term loan is only as good as the refinance behind it. Treat the next few weeks as part of the same job.
- Keep the bank application alive. Don’t let the file go quiet after settlement. Send whatever the bank still needs within a day of being asked, and ask for a target approval date in writing.
- Tell the bank what’s happened. The bank will now be refinancing a private first mortgage rather than funding a purchase. That changes some of its paperwork, so make sure your broker or banker knows early.
- Share the private loan details. The bank will need a payout figure from the private lender at refinance. Ask for it a week before the planned date so the numbers are ready.
- Keep the business accounts tidy. Bank credit teams look closely at recent trading. Avoid new unexplained debts, keep the BAS current, and don’t let the account dip into arrears while the approval is pending.
- Have a second exit in mind. If the bank changes its mind, the next step might be another lender, a longer short-term term, or selling a different asset. Knowing that before you need it takes the panic out of a late decline.
The owners who come through this smoothly are the ones who treat the private loan as a bridge with two ends: settlement on one side and the bank on the other. Our page on what to do when the bank said no covers the less common case where the second end doesn’t arrive.
What should you check before signing?
- The exit is real. Ask the bank what is still outstanding and how long it will take. If the answer is vague, plan for a longer term.
- The total cost in dollars. Establishment, legal, valuation and interest costs all apply to a private loan; ask for a dollar estimate for the full expected term. Our page on what short-term loans cost explains each item.
- What happens if the bank declines. A refinance to another lender, or extra time on the short-term loan, should both be on the table.
- Fit for use. business.gov.au suggests checking zoning and council approvals before buying. A zoning problem found after settlement is your problem, not the lender’s.
If the bank’s valuation came in low and you’re facing a shortfall rather than a timing delay, our settlement shortfall page covers that situation.
Keep the purchase on track
Buying your own premises is a milestone. It shouldn’t fall over because a credit department is running behind. If your settlement date is close and the bank can’t confirm, let’s look at it now while there’s still time to work with.
The enquiry form takes around a minute. We don’t do a credit check when you first get in touch, and your details aren’t handed to a long line of lenders — we fund the loan ourselves. A real person reads it and calls you to talk it through. Please be exact about the premises address, the state, the price, your deposit and the settlement date — those details decide which structure we recommend first.
Frequently asked questions
What happens if I miss the settlement date?
It depends on your contract. Many contracts allow the vendor to charge penalty interest for late settlement and, if delays continue, to serve a notice and eventually end the contract and keep the deposit. Your solicitor or conveyancer can tell you exactly where your contract stands.
Can a private lender really settle in ten days?
Often, yes. Property-secured loans up to $5 million can be possible within 24 to 48 hours once the valuation, title checks and documents are complete. The time goes into gathering paperwork, so start immediately.
Do I need a second property as security?
Not always. It depends on how much of the purchase price you need to borrow. If the gap between your deposit and the price is large, extra security over another property can make the numbers work.
How do I get out of the short-term loan?
Usually by completing the bank's approval and refinancing once the bank is ready. Some owners repay from the sale of another property instead. Either way, the exit should be clear before you sign.
What if the bank says no altogether?
Then the short-term loan needs a different exit — another lender, a sale, or a smaller refinance with extra equity. It's worth asking the bank directly why it's delayed, so you know whether it's timing or a decline.
Can I use this if I'm buying through a company or trust?
Yes. Property owned or bought by a company or trust can be used as security, with the right documents for the entity and its directors or trustees.