Solutions
Urgent settlement finance when the bank won’t make the date
An unconditional contract does not care that the bank is still processing. When the settlement date — or a notice to complete — is closer than the approval, a private first mortgage over the property being purchased settles the deal, and the bank refinances it afterwards.
What is at stake
Once a contract is unconditional, failing to settle puts the deposit at risk and exposes the buyer to a damages claim for the vendor's losses on resale. In New South Wales a vendor can serve a notice to complete giving fourteen days; other states have their own mechanisms but the commercial reality is the same. For a Pty Ltd purchaser of a commercial unit, an investment property or a development site, the cost of a short private facility is almost always less than the cost of not settling.
How settlement finance is structured
- First mortgage over the property being bought. The private lender takes the security a bank would have taken, at settlement, through PEXA. The facility runs 3–12 months while the bank approval completes, then the bank pays it out.
- Second mortgage over another asset for a shortfall. Where the bank has approved but the valuation came in short, or the deposit on a second purchase needs to be funded, a second mortgage over property the entity already owns bridges the gap.
- Capitalised interest. No monthly payments during the bridge; the whole facility is repaid from the refinance.
Realistic timing
A clean file settles in 5–10 business days from the term sheet. Inside 24 to 48 hours is achievable when the contract, title and entity documents are in hand, the valuer can access the property the same day, and the borrower's solicitor can sign immediately. What slows a settlement bridge is almost never the lender — it is a trust deed that has not been located, a director overseas, or a valuer who cannot get in. Tell us the settlement date on day one and we plan backwards from it.
What we need from you
- The contract of sale and the settlement date (and any notice to complete already served).
- The purchasing entity's details and, if a trust, the deed.
- Where the bank approval is up to, in writing if possible — it is the exit.
- Any existing valuation; the lender will usually instruct its own.
The purchaser must be a company, corporate trustee or partnership buying for a business or investment purpose. We cannot help an individual settle a home. See who we help.
The products behind it
First Mortgage Loans
Registered first mortgage over residential investment, commercial, industrial, rural or mixed-use property.
MoreSecond Mortgage Loans
Sit behind a major-bank or other priority lender. Raise capital without disturbing an existing first.
MoreFrequently asked questions
- How quickly can settlement finance be arranged?
- Typically 5–10 business days from the term sheet for a clean file, and inside 24 to 48 hours when every party is ready to act immediately. Call the day you know the bank will miss the date.
- What if the bank approval never comes through?
- The facility is written with a term long enough to pursue an alternative exit — another lender, a non-bank term loan, or a sale. We assess the realism of the exit before taking the deal to a funder, and tell you honestly if it looks thin.
- Can you fund an auction purchase?
- Yes, where the buyer is an entity. Auction contracts are unconditional on the fall of the hammer, which is exactly the situation a private first mortgage is built for. Ideally talk to us before the auction so indicative terms are lined up.
- Does a notice to complete change anything?
- It fixes the deadline and raises the stakes, but the structure is the same. We treat the date in the notice as the settlement date and work backwards from it.
Related reading
Important — Business Purpose Lending Only
IMPORTANT — BUSINESS PURPOSE LENDING ONLY. Andorra Capital Solutions Pty Ltd (ACN 675 464 623 / ABN 32 675 464 623) is a commercial finance broker and introducer. We arrange property-secured business-purpose loans between Australian corporate borrowers and a panel of non-bank lenders and private investors. We do not provide credit ourselves. We do not arrange consumer credit and we do not arrange credit regulated by the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act) or the National Credit Code. We are not an Australian Credit Licensee. Every loan arranged through us is either to a borrower that is not a natural person (outside the National Credit Code under section 5(1)) or for purposes that are wholly or predominantly business or investment purposes (outside under section 6(1)), or both. All borrowers are required to execute a Business Purpose Declaration and to evidence the true business purpose of the funds. No part of any loan arranged through us may be applied for personal, domestic or household purposes. If a borrower applies any part of the funds for a purpose to which the NCCP Act would apply, the borrower does so in breach of the loan agreement and indemnifies the lender against any resulting loss, claim or cost. The information on this website is general in nature, does not constitute financial, legal or taxation advice, and does not take into account your objectives, financial situation or needs. No interest rates, fees or other commercial terms are advertised on this website; pricing is determined by the relevant panel lender or private investor and is disclosed to the borrower as part of indicative terms. All loans are subject to credit assessment, satisfactory security, valuation, and execution of formal loan documentation by the relevant lender. For consumer credit (regulated under the NCCP Act), contact a licensed credit provider.