Why use property to secure business funding?
Unsecured lending is assessed mostly on your recent trading. That works well for established businesses with healthy bank statements, but it leaves gaps. A business that’s new, has had a rough year, is carrying an ATO balance or needs more than its turnover supports can struggle to get an unsecured yes.
Property changes the conversation. When a loan is secured on Australian property, the lender looks mainly at the equity, the purpose and the exit, not just the last six months of deposits. That opens the door to larger amounts, lower-doc assessments and situations other lenders turn away. It’s also how much of Australia’s small business lending already works: the Reserve Bank notes that new small and medium business loans secured by residential property are around four and a half times the size of those that aren’t.
What property can be used?
Security can be Australian property that you or a supporting party already own:
- Your home.
- An investment property, house or unit.
- Commercial property, including the premises your business trades from.
- Land, including vacant blocks and acreage.
The loan can be registered as a first mortgage on a property with no loan against it, or as a second mortgage behind your existing lender. You don’t need to refinance your current home loan to use the equity.
What can a top-up pay for?
Because it’s a lump sum, a top-up suits needs with a clear size and purpose:
- Clearing ATO debt — BAS, PAYG withholding, super guarantee charge or income tax — so the general interest charge stops compounding. See paying the ATO on time.
- Seasonal bridging where the gap is bigger than an unsecured limit would cover.
- Equipment, vehicles or fit-outs bought at auction or against a deadline.
- Acquisition deposits and settlement gaps when buying a business — see opportunity funding.
- Consolidating expensive short-term business debt into one arrangement.
- Working capital for a large new contract before the first progress claim is paid.
What’s different about the assessment?
- No financials or tax returns for the initial assessment. The lender starts with the property, the purpose and how the loan will be repaid.
- Credit history is considered case by case. Bad credit, defaults and arrears don’t automatically rule you out.
- ATO debt can be refinanced or paid out as part of the loan.
- Speed. Funding is possible within 24 hours of approval in some cases.
Sole traders, companies, partnerships and trusts can all apply, provided the loan is for business purposes.
How does it sit alongside a line of credit?
Here’s the straight answer: we don’t offer a property-secured revolving facility. Property-secured loans are lump sums for a short to medium term. Revolving lines of credit are generally unsecured and based on turnover, for businesses usually trading six months or more.
Plenty of businesses use both. The property-secured loan clears the big item — the tax debt, the replacement boat engine, the acquisition deposit — while a smaller business line of credit handles month-to-month swings.
| Property-secured top-up | Business line of credit | |
|---|---|---|
| Structure | Lump sum | Revolving limit |
| Amount | $20,000 to $1m | Based on turnover |
| Security | Australian property | Generally unsecured |
| Trading history | Not the main factor | Usually 6+ months |
| Paperwork to start | No financials or tax returns | Business bank statements |
How is repayment planned?
Every property-secured loan needs a clear way out. That could be seasonal income, the proceeds of selling an asset, a refinance to a mainstream lender once your trading record rebuilds, or a large payment you’re owed, such as a final progress claim or released retention. Your lending specialist will talk through the exit at the start, because a loan with a realistic exit is the right loan.
Example scenario — illustrative only. A civil contractor on the Sunshine Coast has a large ATO balance after a slow-paying head contractor went under owing it money. Its trading statements are patchy, so an unsecured limit won’t stretch far enough. A second mortgage over the director’s investment property clears the ATO debt in one step, and the loan is repaid over the following months from two new contracts.
What about supporting parties?
If a family member or business partner offers their property as security, they’re taking on real risk. They need to understand the loan and should get independent legal advice first. Good lenders insist on it. Our guide to property-secured business loans covers first and second mortgages in more detail.
What does it cost?
Every loan is priced on the individual situation: the property, the amount, the purpose and the exit. We don’t publish rates. We look for the sharpest option available for your circumstances and set out all costs before you commit.
Start with a quick enquiry
The 60-second enquiry asks what you need and what property is available. It’s free, doesn’t affect your credit score, and a lending specialist will contact you to talk it through.