The Senior Lender Consent Pack for a Vendor Carry
Vendor Carry: the Senior Consent Pack | Switchboard Finance
Accommodation Finance
Vendor Carry · Senior Consent · Deed of Priority
The Senior Lender Consent Pack for a Vendor Carry
A vendor carry sits behind the senior facility, and it only ranks there if the senior lender agrees in writing. Treating the carry as an informal side deal is the fastest way to stall at credit. The file you build is what wins the consent.
Quick Answer
A vendor carry only works when the senior lender consents in writing to sit in front of it. That consent turns on a complete file, not the size of the carry. See how vendor finance ranks behind a going concern.
A vendor carry is not an informal handshake
A vendor carry behind the senior facility is documented, business-purpose credit, not a quiet side deal with the seller. The seller leaves part of the price in the deal and is repaid over time, but the moment that slice ranks behind a bank or non-bank facility, it becomes a ranking question the senior lender has to sign off on. Treating it as a handshake is the fastest way to stall at credit.
The deal-critical item is the senior lender's written consent to let the carry rank behind everything the senior facility funds. That consent is not automatic, and where this commonly lands is uncomfortable for first-time buyers: a strong trade and a fair price still fail if the senior lender will not agree, in writing, to share its security with a second-ranking carry. A carry registered without that consent is not something the parties can rely on. See how vendor finance is built and where a second mortgage sits in the order.
It helps to read the market a carry operates in. Venue transactions have picked up sharply through 2025, the buyers doing these deals are almost entirely private operators, and that is exactly the profile that leans on a carry to close the last slice going into the new financial year.
The documents that win written consent
The senior lender's written consent is won by a complete file, assembled before you ask rather than promised after. A senior credit team says yes far more readily when every item is in the pack: a consent request, a current going-concern valuation, the proposed deed of priority, evidence the trade services both facilities, a mapped exit, and the security registrations. Each one answers a question the lender would otherwise have to chase.
The consent request sets out the carry and asks the senior lender to rank ahead of it, the first mortgagee consent that everything else hangs on. The valuation shows the going-concern value the whole stack is measured against. The proposed deed of priority is a deed of priority that fixes the recovery order between the senior lender and the vendor, so who is paid first is documented, not assumed. Anchor the deed of consent and priority to the security: a registered second mortgage and PPSR registration over the business assets, recorded on the PPSR so the vendor's position is perfected rather than informal.
Two more items finish the file. A credible exit strategy, usually a refinance once the business has traded under new ownership, shows the carry has somewhere to go. And the whole arrangement is business-purpose credit, solicitor-documented before contracts, with a business-purpose declaration on file that keeps it outside consumer credit. That is the pack a senior lender wants to see, and it is the same read a senior lender runs on a motel expansion carry.
Where a consent pack lands, and where it stalls
A consent pack lands when the senior lender keeps clean first call and the trade covers both facilities, and it stalls when the file is thin or the carry is too large. The split is rarely about the venue itself; it turns on whether the paperwork and the serviceability give the senior lender room to share its security. Where this commonly lands is the size of the carry against the buyer's own equity: typically an indicative 10 to 20 per cent vendor-held (varies by deal) reads very differently from a large carry propping up a thin deposit.
Consent lands when
- The senior lender keeps clean first call and signs a deed of priority
- The carry is a modest last slice, not the bulk of the price
- Combined trading covers the senior facility and the carry
- A refinance exit is mapped before contracts are signed
- The carry is solicitor-documented, business-purpose credit
Consent stalls when
- There is no written consent from the senior lender to rank behind
- The carry is so large the buyer holds little real equity
- The trade cannot cover both repayments with margin
- There is no exit, so the carry has nowhere to go
- Terms are vague, with no deed of priority or PPSR registration
Packaging the pack before contracts
Packaging the consent pack before contracts is the work that earns its keep, because the senior lender's read has to be known before you commit to a price. The order that holds up is to confirm the going-concern read, size the senior facility against it, then shape the carry, its deed of priority and its exit around the slice that remains, rather than agreeing a price and working out the ranking afterward.
State registration adds a step worth planning for. In Victoria, registering a second mortgage behind the bank needs a title nomination from the first mortgagee, who usually wants the deed of priority settled first, so the sequence has to sit in the timetable rather than surface at settlement. None of this is timing finance: pure timing pressure between exchange and settlement is short-term secured lending, a job for private lending or a caveat loan, not the carry.
The wider backdrop favours getting this right. Non-bank and specialist funders now carry a meaningful share of these deals, set against a financial system the Reserve Bank still reads as well placed in its March 2026 Financial Stability Review, so a cleanly documented carry behind a willing senior lender is a structure that gets done. Set it with a broker and an accommodation finance specialist before contracts are signed, so the senior lender's read is known in advance.
A vendor carry behind the senior facility is fundable only when the senior lender consents, in writing, to rank ahead of it, and that consent is won by a file, not a conversation. The pack that wins it is consistent: a consent request, a current going-concern valuation, a deed of priority that fixes the recovery order, evidence the trade services both facilities, a mapped exit, and a registered second mortgage and PPSR. Assemble it before you offer and the carry becomes the slice that completes the deal.
Key takeaway: The senior lender's written consent, not the size of the carry, decides a vendor carry, so build the document pack before you agree a price.Frequently Asked Questions
The senior lender does have to consent to a vendor carry, because the carry ranks behind the senior facility and that ranking only holds if the first lender agrees in writing to sit in front of it. Without that consent, a second-ranking carry cannot be registered in a way the parties can rely on, so it is usually the make-or-break step on the deal. It is why a deed of consent and priority is assembled before you ask.
A senior lender wants a complete file before consenting to a vendor carry: a written consent request, a current going-concern valuation, the proposed deed of priority, evidence the trade services both facilities, a mapped exit, and the security registrations. A first mortgagee consent is far easier to win when every item is in the pack rather than promised. Packaging it cleanly before you ask is the work that earns the approval.
A deed of priority on a vendor carry is the document that fixes the recovery order between the senior lender and the vendor, so each party knows who is paid first if the borrower defaults. It sits alongside the second mortgage the vendor registers behind the senior facility. Without it the ranking is assumed rather than documented, which is exactly what a senior credit team will not accept.
A vendor usually carries a modest last slice of the price, typically an indicative 10 to 20 per cent vendor-held and varies by deal, with the senior facility funding the bulk and the buyer's equity underneath. A smaller carry on a strong going concern reads far better than a large one propping up a thin deposit. The exact slice turns on what the senior lender will consent to sit in front of.
A vendor carry is not the same as a deferred settlement, although both delay part of the payment. A deferred settlement pushes the completion date out, while a vendor carry completes the sale now and leaves part of the price owing as secured, business-purpose credit. Pure timing pressure between exchange and settlement is a job for private lending or a caveat loan, not the carry.
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