What’s the core idea?
Every lender needs confidence it will be repaid. For unsecured lending, that confidence comes mostly from the business’s trading history. For property-secured lending, it comes mainly from the property. That shift changes what’s possible: larger amounts, fewer documents up front, and more flexibility around credit history and how long the business has been trading.
What property can be used as security?
Australian property that you — or a supporting party — already own:
- The family home.
- An investment property.
- Commercial property, including your own business premises.
- Land, including rural blocks, orchard or vineyard land and vacant land.
How do first and second mortgages work?
Almost all land in Australia sits under the Torrens title system, where mortgages are registered on the title at the state or territory land registry. The order of registration generally sets the order in which lenders are repaid if the property is sold.
First mortgage
If the property has no mortgage, the business loan can be registered as a first mortgage. That lender has first claim on the sale proceeds.
Second mortgage
If there’s already a mortgage — usually a home loan with a bank — the business loan can sit behind it as a second mortgage. You keep your existing home loan; the new lender relies on the equity above it — the gap between what the property is worth and what’s owed on it.
Consent from the first lender
Many first-mortgage contracts don’t allow further mortgages without the first lender’s consent, so the second lender will usually ask for it. It may also ask the first lender to confirm how much of its debt ranks ahead — sometimes set out in a priority agreement between the two lenders. This is routine paperwork, but it can take time, so it pays to start early.
Where do caveats fit in?
A caveat is a notice lodged on a property’s title claiming an interest in it. Once it’s registered, most other dealings with the title can’t be registered without the person who lodged it being notified. Some lenders lodge a caveat to protect their position while a mortgage is being prepared and registered, and some short-term lending is secured this way alongside a loan agreement that charges the property. If a caveat is part of the arrangement, make sure you understand when and how it will be removed once the loan is repaid.
What is a supporting party?
Sometimes the business owner doesn’t own property but a family member or business partner does. That person can offer their property as security — usually by giving a guarantee and a mortgage. It’s a genuine commitment: if the loan isn’t repaid, their property is at risk. Lenders typically require supporting parties to get independent legal advice before signing, and that’s a sensible step in any case.
How is the assessment different?
For property-secured business loans we arrange:
| Feature | What applies |
|---|---|
| Loan size | $20,000 to $1m |
| Structure | Lump sum, as a first or second mortgage |
| Documents for the initial assessment | No financials or tax returns |
| Credit history | Bad credit, defaults and arrears considered case by case |
| ATO debt | Can be refinanced or paid out |
| Speed | Funding possible within 24 hours of approval in some cases |
| Term | Short to medium term |
The lender focuses on three things: the property, the purpose and the exit — how the loan will be repaid. Our guide to preparing for a funding conversation covers what to have ready.
What are these loans commonly used for?
| Use | Example |
|---|---|
| Clearing tax | Paying out overdue BAS, PAYG withholding or income tax — see paying the ATO on time |
| Seasonal bridging | Carrying a tourism business through a long quiet season |
| Equipment | Paying for machinery bought at auction, where payment is often due within days |
| Opportunities | A bulk-buy discount or a competitor’s stock sell-off — see opportunity funding |
| Acquisitions | A deposit or settlement gap when buying a business |
| Growth | Materials and wages for a large new contract |
| Consolidation | Replacing several short-term debts with one |
Why does the exit matter so much?
A good property-secured loan starts with a clear answer to “how will this be repaid?” Common exits:
- Trading income — seasonal or contract income clearing the loan.
- Sale of an asset — property, equipment or part of the business.
- Refinance — moving to a mainstream lender once trading records or credit have rebuilt.
- A payment you’re owed — a large debtor, an insurance claim, a retention release or a property settlement.
Talk through the exit with your lending specialist at the very start. It’s the most important part of the conversation.
How does it compare with a line of credit?
Property-secured loans are lump sums, not revolving facilities — we don’t offer a property-secured revolving facility. If you need to draw and redraw, a business line of credit is the tool: generally unsecured, based on turnover, for businesses usually trading six months or more.
| Property-secured loan | 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 |
| Initial documents | No financials or tax returns | Business bank statements |
Plenty of businesses use both: a lump sum for a big item, a line of credit for everyday swings.
What does this look like in practice?
Example scenario — illustrative only. A Toowoomba engineering workshop fell behind on its BAS after a major customer entered administration owing it money. The business is otherwise trading well, but its bank won’t lend while tax is overdue. The director owns a home with a bank mortgage and solid equity above it.
A property-secured loan is arranged as a second mortgage behind the existing home loan, with the first lender’s consent. The funds pay out the ATO debt in full, stopping further general interest charge from building up. The agreed exit is a refinance to a mainstream lender after a period of clean trading and on-time BAS payments.
What are the risks to weigh?
- The property is at risk if the loan isn’t repaid. Be realistic about the exit.
- Short to medium term means the loan must be repaid or refinanced within a set period.
- Costs vary. Every loan is priced on the individual circumstances — the property, the amount, the purpose and the exit — so ask for the full cost in writing.
- Supporting parties take on real risk and should get independent advice.
Is it right for you?
A property-secured loan often makes sense when you need a larger amount, need it quickly, don’t fit unsecured criteria, or want to clear ATO debt in one step. Start with our 60-second enquiry — it’s free and doesn’t affect your credit score. To see how we arrange these loans, read about our property-secured top-up.