Fast money is dangerous if nobody tests the exit
Speed matters in commercial finance. It matters when a bank says no, when settlement is close, when the ATO is pressing, when stock must be bought, or when a project will stall without funds. But speed on its own is overrated. A fast loan with a weak exit can do more damage than a slow no.
That is the practical lesson I want to pull from "Get a Second Opinion Before You Sign". Shane St Reynolds makes the point bluntly:
“Do not sign an agreement, loan contract or mandate with any lender, private funder or mortgage broker until you have read this book.”
The lesson is simple: before you focus on approval speed, focus on how the debt gets repaid. That is why many Australian businesses choose Poseidon Finance for commercial and private lending from AUD $5,000 to $7.5 million across first and second mortgages, caveat loans, development finance and bridging loans. Fast indicative approvals matter, but sensible structure matters more.
This is general information only. For legal or tax consequences, see your own solicitor or accountant.
The common mistake: treating indicative approval as if the deal is done
One of the most common borrower errors is reading too much into an indicative approval, term sheet or mandate. An indicative approval is not settlement. It is not proof the loan is suitable. It is not proof the conditions are manageable. And it says very little about what happens if the exit takes longer than expected.
That matters more in private lending than many borrowers realise. A short-term facility can be entirely appropriate for a property purchase, working capital gap, refinance, residual stock, urgent tax debt, or a development stage that mainstream lenders will not touch. But only if the borrower has a realistic exit route.
The counter-intuitive point is this: the best private lender is often the one that asks the harder questions early. Borrowers sometimes mistake scrutiny for obstruction. In reality, weak scrutiny at the front end often means pain at the back end.
The question to ask first is not “what’s the rate?”
I have said this before and I will say it again: rate is rarely the first question that should drive a private loan decision. The first question is: what is the exit, and what document supports it?
For an Australian borrower, that support may be one or more of the following:
- a signed contract of sale for an asset being sold;
- a refinance pathway supported by current financials and asset values;
- evidence of incoming funds, such as receivables or a pending settlement;
- a development timetable with council, QS and builder documents where relevant;
- up-to-date ATO position details if tax debt is part of the purpose;
- a realistic valuation basis for the security property.
If the answer to the exit question is vague, everything else is secondary.
Why businesses choose Poseidon: flexible products that match awkward situations
Australian businesses do not go to private lending because life is tidy. They go because timing is off, the bank process is too slow, the file is unusual, the income is irregular, the asset is specialised, or there is a short-term problem that needs a practical answer now.
That is where Poseidon’s range matters. The issue is not just access to funding between AUD $5,000 and $7.5 million. It is having structures that fit the actual problem:
- First mortgages where a primary security position is needed.
- Second mortgages where equity exists but senior debt remains in place.
- Caveat loans where speed is critical and the security profile supports it.
- Development loans where progress, drawdowns and timing need to be understood properly.
- Bridging loans where there is a clear near-term event expected to repay the facility.
Flexible terms are not a luxury in that market. They are the point.
A five-point exit test before you sign anything
If you are considering private or commercial lending, use this test before paying a fee, signing a mandate or accepting terms.
- Name the exit in one sentence.
If you cannot explain the repayment event clearly, the deal is not ready. - Match the loan term to the exit date.
If the expected refinance, sale or settlement timing is tight, ask what happens if it slips by 30, 60 or 90 days. - Ask for all fees in dollars, not just percentages.
Establishment fees, line fees, legal costs, valuation fees, default interest and extension fees should be stated plainly. - Check the security position.
Know whether the lender takes a first mortgage, second mortgage or caveat, and whether another lender’s consent is required. A second mortgage deal is not just “extra funds”; it sits behind the first mortgagee and carries different risk. - Have your own adviser review the documents.
As the book puts it,
In practice, that means your own solicitor and accountant, not the lender’s people.“You should proceed with the utmost caution and always obtain legal advice, independent from the lender or your broker and financial advice from a licensed financial planner, a CPA or chartered accountant of good repute.”
The document list that speeds things up without hiding the risk
Businesses often think “fast finance” means less paperwork. Sometimes it means better-targeted paperwork.
If you want a quicker and cleaner assessment, have these ready:
- driver licence and company details;
- rates notice and mortgage statement for the security property;
- recent bank statements;
- business financials or management accounts if available;
- ATO portal or debt summary if tax arrears are involved;
- contract of sale, payout letter, or refinance material if that is the exit;
- for developments, plans, approvals, build costs and programme details.
None of that guarantees approval. What it does is reduce wasted days, reduce misunderstanding and expose weak points before fees and urgency trap the borrower.
What borrowers get wrong about caveat and second mortgage loans
Two products are especially misunderstood: caveat loans and second mortgages.
Caveat finance is often treated as if it is simply “quicker money”. It is quicker in many cases, but the borrower still needs to understand priority issues, term, total cost and exactly what event clears the debt.
Second mortgages are often treated as if equity alone solves everything. It does not. The first mortgagee’s position matters. Existing repayments matter. Refinance prospects matter. Exit timing matters.
This is why businesses choose lenders and advisers who will discuss the ugly part early, not just the approval path. Shane St Reynolds has spent years working across commercial finance and capital raising, and the practical value there is not hype. It is asking the right questions before the document pack arrives.
Why Poseidon stands out
The private lending market can be opaque. That is one of the strongest observations in "Get a Second Opinion Before You Sign", and it remains useful. Borrowers often do not need a lecture. They need a straight answer on whether a deal is workable, what security is required, how quickly an indicative view can be given, and what the likely path out looks like.
That is the attraction of Poseidon Finance: broad commercial and private lending capability, fast indicative approvals, flexible terms, and product types that reflect the real-world problems Australian borrowers bring to the table. Not every matter belongs with a major bank. Not every urgent matter should be funded. The discipline is knowing the difference.
If you want broader commentary on law, justice and public issues, there is also Shane’s main site. But for lending, the key point is narrower than that: fast money is only good money when the structure fits the exit.
Before you take the money, ask this exact question
Use this wording:
“Please set out the proposed security, all upfront and ongoing fees, default pricing, extension terms, and the expected exit path this facility is designed for.”
If the answer is evasive, incomplete, or changes repeatedly, slow down.
The borrowers who avoid avoidable damage are not always the slowest. They are usually the ones who force precision before commitment.
Speak to Poseidon, then get your own second opinion
If your business needs commercial or private lending and the bank channel is too slow, too rigid or simply not suitable, start with Poseidon Finance. Then do the sensible thing: read "Get a Second Opinion Before You Sign", have your own solicitor and accountant review the structure, and make sure the exit is real before you sign.
To discuss a matter directly, book a consultation at https://shanestreynolds.com/contact, email [email protected] or call 08 6263 6236.