Quick answer
A property-secured business loan uses equity in residential or commercial property as security for business borrowing. Because the lender relies mainly on the property and your repayment plan, decisions can be quick and paperwork light. Amounts run from $20,000 to $5,000,000 through caveats, second mortgages, private mortgages or first mortgages, and the right one depends on term, amount and what's already on title.
Key points
- Equity, not tax returns, does most of the work.
- Four structures: caveat, second, private and first mortgage.
- Short terms favour caveats; longer terms favour mortgages.
- $20k to $250k possible same day once the file is complete.
- Amounts
- $20,000 to $5,000,000
- Property types
- Houses, units, commercial, industrial, some land
- Structures
- Caveat, second, private, first mortgage
- Speed
- Up to $5m possible within 24–48 hours once complete
If you own property with equity, you have the single most powerful tool in quick business lending. Property gives a lender something concrete to rely on, which means it can spend less time picking through your accounts and more time getting the money to you. This page explains how that works and how to choose between the structures on offer.
Equity in one minute
Equity is what your property is worth minus everything you owe against it. Lenders don’t lend all of it. They work to a maximum loan-to-value ratio (LVR), the total borrowed against the property as a share of its value. That maximum depends on the property type, its location, the loan position and the lender’s appetite.
| Property type | Lenders are usually most comfortable with |
|---|---|
| House in a capital city or large regional centre | The highest LVRs |
| Unit or townhouse | Slightly lower, depending on size and building |
| Standard commercial or industrial | Lower again, often valued more conservatively |
| Rural, specialised or vacant land | The lowest, and not every lender accepts it |
These are tendencies, not rules. The property equity checker gives you a quick estimate of where your property might sit.
The four structures
Caveat loan. A notice lodged on title. The lightest and often the quickest, for terms of weeks to a year. Read more on caveat loans.
Second mortgage. Registered behind your existing home loan, so the first loan stays untouched. Suits terms from months to a few years. See second mortgages.
Private mortgage. A first or second mortgage from a private lender who decides on equity and exit rather than bank criteria. See private mortgages.
First mortgage business loan. First-ranking security, usually the cheapest and longest. Best for larger, longer needs or for refinancing short-term debt. See first mortgage business loans.
Picking the quickest structure that fits
Speed is useful, but the quickest structure isn’t always the right one. A practical way to choose:
- How long do you need the money? Under twelve months with a clear exit points to a caveat or bridge. Longer points to a mortgage.
- Do you want to keep your existing home loan? If yes, a caveat or second mortgage.
- How much do you need? Larger amounts are often better on a registered mortgage.
- What’s already on title? An existing caveat, a reverse mortgage or a lender that restricts second charges can rule some options out.
- How will it be repaid? A lump sum suits short structures; regular repayments suit longer ones.
What makes a property loan move fast
On our side, the lender’s side and yours, a quick property loan comes down to the same handful of items: a clear title search, a valuation the lender accepts, every owner reachable to sign electronically, and a believable exit. With those in place, $20k to $250k is possible same day and up to $5m possible within 24–48 hours. Without them, even a simple loan can take a week.
An illustrative example
A Wollongong café group wants to open a third site and needs $240,000 for the fit-out and equipment. Its bank wants two years of financials for the new entity and three months to assess. One director owns a townhouse worth around $850,000 with $310,000 owing. A second mortgage over the townhouse for two years funds the fit-out within a week, with repayments from the existing sites’ trading. Illustrative only.
What you’re agreeing to
When property is the security, you’re agreeing that the lender can take steps to recover it if the loan isn’t repaid. That’s not a reason to avoid property lending, but it is a reason to borrow only what’s needed, choose a sensible term and have a plan B for your exit. Read every document, ask about all fees and any prepaid interest, and get independent legal advice. Everyone on title should understand the arrangement before they sign.
Not sure property is the right route?
If you’d rather not use property, or the amount is modest and the business trades well, an unsecured business loan sized on turnover might fit better. Many owners use both: unsecured for working capital and property-backed for the big, one-off costs.
Find out what your property can do
Give us the property, what’s owing, what you need and how you’ll repay. We don’t run a credit check when you enquire, your file isn’t pushed out to a crowd of lenders, and a person experienced in property lending will call you. Accurate answers let us point you at the right structure first time. Make an enquiry.
Frequently asked questions
Can I use a property that isn't in the business's name?
Yes. Most property-secured business loans use a home or investment property owned by the directors personally. The owners sign as guarantors or co-borrowers.
What's loan-to-value ratio?
It's the total of all loans against the property divided by its value. A $600,000 total debt on a $1,000,000 property is a 60% loan-to-value ratio. Lenders set maximums by property type and loan position.
Can vacant land be used?
Sometimes, but lenders usually lend a much smaller share of vacant land's value, and some won't accept it. Houses, units and standard commercial property are easier.
Will my credit history matter?
It's considered, but with good equity and a clear exit, a past default or ATO debt often doesn't stop a property-secured loan.