What a private lender's due-diligence pack actually contains
Private lenders vary enormously in what they need before they will look at a deal. Send a data room to a lender who wanted four data points and you look like you cannot summarise. Send a three-page summary to a credit committee that writes investor submissions and you get declined for “too many hurdles at this early stage” — which is what happened on an $18m plus $6.1m commercial refinance pair, on documentation grounds rather than merit.
Work out which conversation you are in first.
Tier 1: the first-look set
Enough to get a yes-or-no on appetite. A private funder’s genuine minimum for a first look is:
- The borrowing entity and its directors and guarantors
- Individual and entity-level assets and liabilities for each director
- The net funds required at settlement
On a hybrid property-and-business deal — where an operating business comes with the freehold — the equivalent triage set is even shorter: site address, the valuation split between freehold and going-concern value, the amount sought, and approximate EBITDA. Four data points produced a fast, structured response on a $20m aged-care acquisition where a full data room would have sat unread.
Lead with the small set. It respects the lender’s time and gets you a real answer in hours rather than a polite silence.
Tier 2: the standard bridging DD pack
Once appetite is confirmed, a bridging refinance behind an existing mortgagee typically needs:
- Current loan balance statements for each existing debt on every security
- Two independent agent market appraisals per property, each showing at least four comparable sales, addressed directly to the lender
That addressing requirement is not a formality. An appraisal addressed to the borrower is a marketing document; one addressed to the lender is evidence.
Tier 3: family-office and institutional private credit
Materially more extensive, because the funder’s own credit write-ups and investor submissions have to be extensive. Expect:
- Sponsor CVs and professional background
- Statements of position for all sponsors
- Project history for the borrowing entity
- Rationale for using this entity rather than a related one
- Valuations
- Presale contracts evidencing expected cash inflows
- Full structure and trust documents
- Evidence each guarantor can service the monthly interest
- A named realisation plan for related projects, if the primary exit could be delayed by a permit or approval issue
A well-prepared sponsor background document — professional history, the operating business behind the security, and a complete personal balance sheet for guarantors — is disproportionately effective here. On one $3.20m equity release against unencumbered industrial property, supplying it upfront compressed the investment committee turnaround to 48 hours.
Where the caveat-loan investor DD is different
Where a caveat facility is funded through an onward investor, the diligence looks past the borrower to the senior debt:
- Six months of first-mortgage loan statements
- Confirmation of minimal penalty clauses on the first mortgage
- Credit searches for both guarantors
- A description and scope of any renovation works, done and proposed
- Confirmation of whether a building permit was required
That last item carries more weight than it looks. Works that are genuinely non-structural and below the relevant state threshold can avoid the permit question entirely — which removes a real risk from the investor’s assessment rather than merely answering a question.
Format matters as much as content
Several private lenders will only respond properly to their own template, tied to their internal approval stages. Others want a single consolidated submission email following a fixed structure: background, reason for funds, security, corporate structure, serviceability, exit, and a deal summary table.
If a funder has supplied a template, use it. Defaulting to a generic format with a new funder that has given you theirs is a self-inflicted delay.
Two related requirements worth checking before you submit:
- A full valuation report, not an executive summary. Some lenders require the complete report upfront and treat a summary as a red flag.
- Panel and ordering channel. Some will only accept a valuation from a mainstream panel valuer ordered through the standard industry platform — a boutique report, however good, will not be accepted.
Screening questions to ask before you spend time
Before working an inbound bridging or development referral, establish: who actually needs the finance (the true borrower, not the introducer’s contact); exactly what the requested amount comprises; the required term; the status and timing of any construction tender; the number of lots or stages the project will yield; and whether there are presales and who is marketing them.
Two integrity checks belong in the same conversation. Disclose prior declines. A site declined by one fund four weeks earlier being re-pitched as fresh by a different introducer wastes everyone’s time and costs credibility when it surfaces — and it always surfaces. And check whether an application already exists: a prospect who describes themselves as a lender’s existing client with “another broker working on it” may have a live application lodged directly, which changes what you can do.
The underlying principle
A private lender’s DD pack is not an obstacle course. It is the evidence base for a credit paper someone else has to write and defend. Supplying it in the form they need it, at the depth they need it, at the stage they need it, is the difference between a 48-hour approval and a decline that never really engaged with the deal.
General information only. It is not credit assistance, financial product advice, or an offer of finance, and it does not take account of your objectives, financial situation or needs. Requirements described are indicative observations over 2024–2026 and vary by lender.