Finance question
Can I refinance a private lender loan to something cheaper?
Yes. A private or short-term loan is often a stepping stone, not a destination. Once your situation improves, meaning cleared arrears, a longer trading history or tidier books, you can usually refinance to a cheaper property-backed loan at single-digit rates. The private loan does its job, then you move on.
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The short answer
The private loan is a bridge, not the finish line
Private lenders solve a problem banks won't touch, funding a deal fast when credit, ATO debt or a short trading history is in the way. The trade is a higher rate. But that rate is only meant to apply while the issue is being fixed, not forever. Once the reason you needed a private lender has passed, cheaper finance usually opens up.
Refinancing swaps the expensive loan for a mainstream property-backed one at single-digit rates. As arrears clear, the ABN ages and the books tidy up, more lenders become comfortable with the deal, and the pricing falls with them. The property that secured the private loan secures the cheaper one, so the security is already in place.
Timing is the skill. Move too early and you may not yet qualify; leave it too long and you pay a premium you no longer need to. A broker watches for the moment your profile clears the bar and lines up the refinance, so the private loan does its job and then steps aside.
When to refinance
Signs you may now qualify for cheaper.
Arrears cleared
ATO debt or defaults resolved since the private loan settled.
A longer track record
More trading history that mainstream lenders like to see.
Tidier books
Financials now reflect how the business really trades.
Equity still in place
The property that secured the private loan secures the cheaper one.
Why refinancing pays off
The reason has passed
Once the issue that forced a private lender is fixed, its higher rate no longer needs to apply.
Single-digit rates
A mainstream property-backed loan brings the pricing back into single digits.
Security already set
The same property carries the new loan, so the groundwork is done.
A real example
An owner took a private loan a year ago while clearing ATO arrears. The arrears are now paid and the business has a fuller trading history. With the same property as security, the loan is refinanced to a mainstream lender at a single-digit rate, cutting the cost and freeing up cash flow. The private loan did its job. Illustrative only.
Common questions
Frequently asked questions
When can I refinance a private loan?
Usually once the reason you needed it has passed, such as cleared arrears, a longer trading history or up-to-date books.
Will the new loan be cheaper?
Often, yes. Moving to a mainstream property-backed loan can bring the rate back into single digits.
Do I need new security to refinance?
Usually not. The property that secured the private loan can secure the cheaper one.
How do I know when I qualify?
We watch your profile and time the refinance for when your situation clears mainstream lenders' requirements.