Three myths about private business lenders

Myth one: you need perfect credit

Unsecured lenders rely heavily on the credit file because there is little else to rely on. A loan secured on real estate is different. HomeSec reads the credit file, but the decision rests on the equity in the property and on how the loan will be repaid, so defaults, arrears and a thin file do not rule anyone out. What the video calls "the property and the plan" is exactly that.

Myth two: it takes weeks

Weeks are what a valuation, two years of financial analysis and a credit committee add up to. HomeSec uses none of them: value is assessed in-house, no financials are asked for, and the people on the first call are the people who decide. Funding is possible in as little as 24 hours from a clean, complete scenario. Where it takes longer, it is usually a signing appointment or a first lender's consent, not the assessment.

Myth three: you need years of financials

There is no minimum trading history. Companies, trusts and sole traders can borrow, including start-ups, because the loan is sized from equity rather than from past profit. The video's last line is the reason it can be said with confidence: HomeSec has lent its own money to Australian businesses since 2004, without a fund or an investor whose rules it has to follow.

What the myths get right

Each myth is true of some lenders. Banks do take weeks, unsecured lenders do lean on credit scores, and many lenders do want two years of returns. The point of the video is that a lender secured on property does not have to work that way, not that the checks disappear. Every loan is still assessed and approved by a person.