This guide is general information only, current as at the 'last updated' date above. It is not legal, tax or financial advice and does not take your circumstances into account. Astro Capital Finance provides credit for business purposes only and is not a tax agent, lawyer or financial adviser. Seek advice from a qualified professional before acting. Lending is subject to assessment, security and an acceptable exit strategy.
The short answer
Urgent settlement finance is a short-term loan from a private lender that lets a business or property investor complete a purchase on time when bank finance is delayed or withdrawn. Because a private lender assesses mainly the property security and the exit strategy, rather than working through a bank’s full credit process, it can approve in as little as 3 hours and settle in as little as 72 hours, subject to assessment.
It is a bridge, not a long-term loan. You use it to settle, then repay it by refinancing to a bank or selling an asset, usually within months. It suits business-purpose and investment purchases only, not homes you plan to live in.
Bank vs private lender for an urgent settlement
| Bank | Private lender | |
|---|---|---|
| Main focus of assessment | Serviceability, full financials, credit policy | Property security, LVR and exit strategy |
| Typical turnaround | Weeks, and can stall late in the process | Approval in as little as 3 hours and settlement in as little as 72 hours, subject to assessment |
| Documentation | Full financials, tax returns, bank statements | Low-doc considered, subject to assessment |
| Credit history | Impaired credit often declined | Impaired credit considered, subject to assessment |
| Loan term | Long term (often decades) | Short term, 1 to 24 months |
| Cost | Generally lower | Generally higher than bank lending |
| Best used for | Long-term holding finance | Settling on time, then refinancing or selling |
General comparison only. Every lender has its own policy.
What is urgent settlement finance?
Urgent settlement finance is short-term, business-purpose lending secured by a registered mortgage over property, used to complete a purchase by the contracted settlement date.
At Astro Capital Finance, loans range from $50k to $5M (larger loans may be considered by exception), for terms of 1 to 24 months, secured by a registered first mortgage only. We lend Australia-wide, excluding the Northern Territory. Terms such as LVR are explained in our glossary.
Why does bank finance fall through close to settlement?
Bank finance can be delayed or withdrawn at the last minute for reasons that have little to do with the strength of the deal. Common causes include:
- A valuation comes in below the purchase price, so the bank reduces the loan amount.
- Credit policy changes for a property type or location.
- Additional document requests late in the process, or slow processing queues.
- Conditions in the approval that cannot be met in time, such as a lease or a sale of another property.
What happens if you miss settlement?
The consequences depend on your contract and the state or territory the property is in, so speak to your solicitor or conveyancer as soon as you suspect a delay. In general terms, if the buyer cannot settle on the due date, the seller may be able to issue a notice to complete, which sets a new deadline and makes time essential. The contract may also allow the seller to charge penalty interest or claim costs for each day of delay.
If the buyer still cannot settle after a valid notice to complete, the seller may be able to terminate the contract, keep the deposit and pursue further losses. The exact notice periods and rights vary by state and by contract. Acting early gives a private lender more time to help.
Notice to complete periods by state
| State | Typical position |
|---|---|
| NSW | 14 days (standard contract) |
| VIC | 14 days (default notice) |
| QLD | Contracts are time of the essence, so termination can occur on the day without a notice period |
| WA, SA and TAS | Depends on the contract’s default clause, commonly 10 to 14 days |
General guide only; confirm with your conveyancer.
What does a private lender need to approve an urgent settlement?
A private lender’s questions are focused on the security and how the loan will be repaid. Expect to provide:
- The contract of sale, so the lender knows the price, settlement date and parties.
- Security details: the property (or properties) offered as first mortgage security, and any existing loans over them that will be repaid.
- A valuation, usually ordered by the lender, to confirm the security value and the LVR. Astro lends up to 75% on metro residential; up to 65% on commercial, industrial and land; regional assessed case by case.
- A clear exit strategy: how the loan will be repaid, such as a bank refinance or the sale of an asset.
- Identification for borrowers, directors and guarantors.
- A business-purpose declaration, confirming that more than 50% of the funds are for business or commercial use.
A realistic timeline from enquiry to settlement
Every deal is different, and timing depends on how quickly documents, the valuation and the other parties move. A typical sequence looks like this:
- Enquiry: you or your broker send the contract, security details and exit strategy. Brokers receive a same-day indicative answer.
- Indicative terms: a term sheet setting out the loan amount, term and every fee.
- Valuation: ordered on the security property. This is often the step that sets the pace.
- Approval: in as little as 3 hours once the information is in, subject to assessment.
- Loan documents: issued, reviewed by your solicitor and signed.
- Settlement: in as little as 72 hours from approval, subject to assessment, the lender’s solicitors book settlement with all parties.
How do you repay urgent settlement finance?
Because the loan is short term, the exit strategy is central to the approval. The two most common exits are a refinance, where you move to a bank or other long-term lender once the original issue is resolved, and a sale, where you sell the purchased property or another asset to clear the loan.
A credible exit has a realistic timeframe and some buffer. Your broker or accountant can help test it before you commit.
What does urgent settlement finance cost?
Private lending generally costs more than bank lending. Costs usually include interest plus establishment, valuation and legal fees. Astro does not publish rates or fees because each loan is priced on its security, LVR, term and exit.
What matters is clarity. Every fee appears on the term sheet, and the term sheet matches the loan documents. Weigh it against penalty interest or a lost deposit.
Illustrative example: a commercial purchase with delayed bank finance
Illustrative example only, not a real client or deal. A company has contracted to buy a small warehouse for its operations. A week before settlement, the bank’s valuation comes in lower than expected and the approval is reduced. Its broker approaches a private lender with the contract, an investment property the directors own as additional security, and a plan to refinance to a bank within 12 months. After a valuation and assessment, the private lender funds the shortfall on a first mortgage, the purchase settles on time, and the company later refinances.
When urgent settlement finance does not suit
Astro lends for business purposes only. We cannot help with buying a home you or your family will live in, or with any loan where the funds are mainly for personal use. We also only lend on a registered first mortgage, so we do not offer second mortgages or caveat loans.
For other business needs, see business loans, private mortgage finance or ATO tax debt funding. Brokers can learn more on our brokers page, or contact us on 1300 278 761.
Frequently asked questions
Astro can approve in as little as 3 hours and settle in as little as 72 hours, subject to assessment.
No. Astro provides business-purpose loans only, where more than 50% of the funds are for business or commercial use. We do not offer owner-occupied home loans or consumer loans.
A private lender orders its own valuation and may lend up to a set LVR. Astro lends up to 75% on metro residential; up to 65% on commercial, industrial and land; regional assessed case by case.
Not always. Low-doc applications and impaired credit are considered, subject to assessment.
It depends on your contract and state. The seller may be able to issue a notice to complete, charge penalty interest and, ultimately, terminate and keep the deposit. Speak to your solicitor or conveyancer early.
Yes. Brokers get a same-day indicative answer, direct access to decision-makers, every fee on the term sheet, a term sheet that matches the loan documents, and no commission clawback.
This guide is general information only, current as at the 'last updated' date above. It is not legal, tax or financial advice and does not take your circumstances into account. Astro Capital Finance provides credit for business purposes only and is not a tax agent, lawyer or financial adviser. Seek advice from a qualified professional before acting. Lending is subject to assessment, security and an acceptable exit strategy.