Property-Secured Private Credit: Smarter Capital Solutions

When businesses seek capital for working capital, operations, or expansion, the default pathways remain surprisingly narrow: sell shares, issue preference shares or convertible notes, approach venture capital, or pursue family-office investment. Yet all these options share a common trait: they tend to be expensive, dilutive, and intrusive.

But there is a better alternative: private credit secured by real property.

Why Equity Is the Most Expensive Capital You Can Raise

Equity is always expensive because it involves giving away ownership. You dilute shareholding, control, influence, and future upside permanently as seen in EY’s article on 12 sources of finance for entrepreneurs. Return expectations in the equity world are high:

• Venture capital typically targets 20–30% IRR+.

• Family offices commonly aim for mid-teens IRRs.

By contrast, property-secured private credit at ~8%–9.5% p.a. (RBA + 365–515 bps) is comparatively cheap capital. It’s a fraction of the economic cost of selling shares.

Debt also comes without the board seats, veto rights, information demands, or governance intrusions typical of equity investments. It is interest-only, straightforward to model, and most importantly, you retain full ownership and control. Plus, the interest is tax deductible for the business.

Debt Is Not Just Cheaper — It Is More Flexible and Universally Applicable

Private credit secured by real property is industry-agnostic. A lender does not need to believe in your sector, your technology, or your exit multiple; the security provides the bedrock, while the business plan supports the repayment profile. Once the business achieves one or two years of growth, most borrowers refinance to a bank, further reducing their cost of capital.

For many businesses, this means:

• Cheaper funding today

• Preservation of ownership

• Flexibility to refinance tomorrow

• Avoidance of equity dilution and investor interference

A Critical Advisory Insight: Raise Against Real-Property Equity First

Wealth advisers, management consultants and commercial brokers should consider this rule of thumb: If your client has equity in real property, it is almost always cheaper and more flexible to raise against that first, even if it doesn’t cover the full capital requirement.

Using property-secured private credit reduces the weighted average cost of capital, preserves control, and often accelerates the business toward a bank-refinance position. Whatever capital remains unfunded can then be sourced through equity, but with far less dilution and a more efficient balance sheet.

This is one of the most consistently overlooked strategies in small-to-mid-market corporate finance.

When to Recommend Private Credit to a Client

Advisers should consider private credit when their client demonstrates any of the following:

• They own real property with usable equity

• They need working capital, operational funding or expansion capital

• They wish to avoid ownership dilution

• They require speed, flexibility or bespoke terms

• They operate in a sector banks are slow or unwilling to fund

• They have a credible growth strategy but need capital to realise it

Six Pieces of Information Advisers Should Gather Before Approaching Semper

To streamline assessment and ensure fast, accurate structuring, advisers should provide:

1. The amount of capital sought

2. The value of all real property assets and any existing debt on them

3. The intended use of funds (working capital, acquisition, expansion, etc.)

4. Borrower details and a clear explanation of the business model

5. The loan term required

6. The proposed exit strategy (refinance, sale, cash-flow retirement, etc.)

From these six data points, Semper can:

• Determine the proof of benefit of borrowing

• Evaluate whether the funding will materially advance the business

• Assess the stage of the business growth cycle

• Identify whether management has the capability and strategy to achieve its objectives

• Tailor a flexible, property-secured structure that supports early cash flows

Why Semper Leads in Property-Secured Business Finance

With twenty years of lending history, Semper specialises in combining property-secured structures with a deep understanding of business models and growth plans. Its recent portfolio includes loans used to buy businesses, raise operational capital, and fund expansion — all executed with flexibility such as prepaid interest periods, partial-interest monthly options and reserve pools to manage seasonal cash flow.

Before a business sacrifices equity, control or future upside, advisers should ask one simple question:

“Does the owner have real-property equity that could fund this more efficiently?”

In most cases the answer unlocks a cheaper, faster, more flexible capital-raising strategy — private credit secured by real property.