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 Need 80% LVR? We'll Blend It! 

In private credit, a lot of scenarios don't fail because the asset is weak. They fail because the funding structure is too rigid.

A common scenario plays out every week: a borrower owns a quality property, has a credible plan, and needs funding quickly. The incoming first mortgage lender is comfortable at 65% to 70% LVR, but the borrower needs closer to 80% to complete the transaction, fund working capital, cover tax obligations, or secure another opportunity.

At that point, many lenders simply say no.

At Arc Money, we look for ways to make good scenarios work.

A Recent Example

We recently structured a $2.24 million facility secured against a $2.8 million property in Surfers Paradise.

Rather than relying on a single mortgage position, we blended our own first and second mortgage facilities into one coordinated funding solution:

    • First Mortgage: 70% LVR at 9.00% p.a.
    • Second Mortgage: Additional 10% LVR at 15.00% p.a.
    • Total combined LVR of 80% of the purchase price
    • Both facilities settled simultaneously
    • One set of conditions
    • One point of contact
    • Monthly interest paid in advance

The result was a seamless funding solution that delivered the full capital requirement while maintaining a sensible risk profile.

Why We Were Comfortable at 80%

LVR is only one part of the credit assessment.

While the property met our warehouse funding requirements and included a tenable dwelling, the real strength of the deal came from the broader picture.

We identified:

    • A quality sponsor with a strong track record
    • A realistic development strategy
    • A clear pathway to value uplift following Development Approval
    • A credible and achievable exit strategy

In private lending, numbers matter, but context matters too.

A strong sponsor can often be the difference between a deal that gets approved and one that doesn't.

Looking Beyond the Security

Traditional lenders tend to focus heavily on servicing calculations and policy limits.

Private credit allows for a more commercial assessment.

When we review a transaction, we consider:

    • The quality of the underlying asset
    • The experience and capability of the sponsor
    • The purpose of the funds
    • The proposed exit strategy
    • The potential for value creation during the loan term

When these elements align, higher leverage can sometimes be achieved through a structured first and second mortgage solution.

Where Blended Facilities Work Best

Working Capital Requirements

A sponsor may have significant equity in a property but require additional capital to fund business operations, tax liabilities, or another acquisition.

Rather than selling an asset prematurely, a blended facility can unlock additional capital.

Refinances

Many first mortgage lenders cap their exposure at 65% to 70% LVR regardless of the strength of the overall transaction.

A second mortgage can bridge the gap and deliver the funding outcome the borrower actually needs.

Bridging Transactions

Where a property sale is pending or another liquidity event is expected, a first and second mortgage structure can provide short-term funding flexibility while maintaining a clear exit.

The Arc Money Difference

We understand that genuine business people don't always fit neatly into traditional bank lending models.

Property developers, investors, and business owners often experience lumpy cash flow, timing challenges, and opportunities that require fast decisions.

Our role is to assess the complete scenario and structure a facility that makes commercial sense.

We focus on:

    • Realistic pricing
    • Commercial decision making
    • Fast turnaround times
    • Flexible structures
    • Clear exit strategies
    • Fair treatment throughout the life of the loan

Most importantly, we take the time to understand the transaction before providing an answer.

When to Call Arc Money

Get in touch if you have a scenario involving:

    • LVRs above 70%
    • A strong sponsor but a conservative first mortgage limit
    • Working capital requirements secured by property
    • Bridging finance
    • Development sites awaiting approval
    • Time-sensitive transactions requiring same-day indicative pricing

Stuck on a Scenario?

Not every deal fits neatly inside a standard credit box.

If you've got a transaction that appears stuck because of leverage constraints, let's workshop it together.

The right structure can often be the difference between a deal that stalls and a deal that settles.