Franchise and retail business loans secured by property

Retail is a business of deadlines set by other people. The franchisor sets the date for the refit. The vendor of an established store wants to settle in 30 days. The wholesaler wants the Christmas order confirmed in September. The landlord wants the security deposit before the keys are handed over.

Most retailers and franchisees lease their shops, so the store itself is not security. What many do own is a home, an investment unit or occasionally a shop freehold. A property-secured private loan uses that equity to meet those deadlines without waiting on a bank’s view of a business it hasn’t yet seen trade.

What funding moments do retailers and franchisees face?

Moment	What has to be paid	Usual structure	Typical exit
Buying a franchise or an existing store	Purchase price, fit-out top-up, stock, working capital	Second mortgage, or first mortgage over debt-free property	Bank refinance with trading history
Franchisor-required refit	Shopfitting, signage, systems	Second mortgage or caveat	Trading income or refinance
Seasonal stock build	Christmas, back-to-school or end-of-season buying	Caveat with prepaid interest	Sales through the peak
Opening another site	Lease deposit, fit-out, stock, staff	Second mortgage	Bank refinance once both stores trade
Buying the shop you lease	Purchase price, duty, costs	Private first mortgage	Commercial bank loan
ATO or supplier arrears	Overdue BAS, PAYG withholding, trade accounts	Second mortgage	Refinance or trading cash flow

Loan amounts start at $20k. That matters in retail, where many needs (a stock order, a shopfront refresh, a short tax bill) are well below the minimum many private lenders set. Same-day funding is possible for property-secured amounts from $20k to $250k once documents are in. See small secured business loans.

What should franchisees check before borrowing to buy in?

A franchise has its own rules, and they affect your loan timing. The Franchising Code of Conduct was remade from 1 April 2025, and the ACCC says franchise agreements entered into from 1 November 2025 must comply with all of its requirements. Points that matter for funding:

• Disclosure and documents first. Franchisors must give prospective franchisees a disclosure document and a copy of the franchise agreement to consider during the disclosure period.
• Significant capital expenditure. The ACCC says all significant capital expenditure must be included in the disclosure document, and franchisors must discuss it with prospective franchisees and explain how it is likely to be recovered. Read that section carefully: it tells you what refits you may be funding later.
• The 14-day cooling-off period. Time your loan drawdown so you are not paying interest on funds you might hand back.
• Early termination. In certain cases, franchise agreements must include clauses providing compensation for early termination. Your solicitor can explain what that means for you.

For buying an established store or franchise resale, the ATO lists the conditions for selling a going concern GST-free, including that the buyer is registered for GST (or required to be), both parties agree in writing, and the sale includes everything needed to keep the business running. Whether your contract qualifies changes how much cash you need at settlement, so ask your accountant to confirm before you set the loan amount.

Our page on buying a business with property security covers the purchase sequence in more depth.

What property can retail owners use as security?

• Your home. The most common choice. A second mortgage on your home for business sits behind the bank, and every registered owner signs.
• An investment property. Often preferred, because it keeps the family home out of the deal.
• A shop freehold or strata retail unit. Commercial security, often with strong equity if held for years.
• Property owned by a trust, company or family member. Workable with the right signatures and advice. See third-party security.

There is no formal valuation required. The lender assesses the property directly, which shortens the timeline when a vendor or franchisor has set the date.

Illustrative example: a couple in Adelaide agree to buy an established franchise resale in a suburban shopping centre for $380k, with the franchisor also requiring a $90k refit within six months of the transfer. Their bank wants a year of trading under their ownership before it will lend against the business. Their home is worth about $1.05m with $410k owing. A $480k second mortgage over the home funds the purchase, refit and opening stock, with interest capitalised for 12 months. After a year of trading figures, they refinance into a longer-term bank loan and the private second mortgage is repaid.

That’s a typical purchase shape. If you’re facing a similar deadline, ask how much your property could fund.

Who is this for, and who should think twice?

Good fit:

• franchisees and independent retailers with property equity and a fixed deadline;
• owners funding a refit, a second store or a seasonal build with a clear way to repay;
• buyers whose vendor wants settlement sooner than any bank would approve a business they haven’t run yet.

Think twice if:

• the store is losing money and the loan would only delay a harder decision;
• the exit depends entirely on an untested new site doing well;
• you have no property to offer, since this is property-secured lending only.

What cash-flow changes should retailers plan for in 2026?

Two items are worth building into any loan plan:

• Payday Super. From 1 July 2026, super is due with every pay run, and the ATO counts it as paid only once the employee’s fund receives it, which must happen within 7 business days. Stores running weekly casual payrolls feel the change most. See covering Payday Super and payroll.
• Peak-season stock. Retail stock for a peak is usually bought months before it sells. Capitalised or prepaid interest means the loan doesn’t add a monthly repayment while the stock sits on the shelf.

What documents does a retail or franchise loan need?

Your accountant and franchisor will have most of this:

• ID for every borrower, director and guarantor; ABN or ACN; trust deed if relevant;
• title details for the property and statements for loans already on it;
• the sale contract, franchise agreement and disclosure document for a purchase;
• the refit scope or quote, or the supplier order for a stock build;
• recent BAS and a profit and loss statement where trading is the exit.

The full list is in our documents for a private mortgage guide.

How are costs and risks handled?

Pricing is set on each deal’s security, LVR, term and exit, and we aim for the sharpest price your situation allows. A second mortgage or caveat costs more than a first mortgage because the lender ranks behind another lender. A small assessment fee applies, varies per loan and is shown on the Letter of Offer.

Reduce the risk:

• Match the term to the plan. A refit or new store usually needs 12 months of figures before a bank will refinance.
• Keep a second exit. If trading disappoints, what could you sell?
• Borrow for the need, not the limit. Leave equity untouched for the unexpected.

Medical practices and hospitality venues face many of the same fit-out and lease questions; see medical and dental practices, hospitality and the full industries hub.

At a glance

• For: franchisees, independent retailers, shopping centre tenants and online sellers with a warehouse
• Security: home, investment property or shop freehold
• Structures: first mortgage, second mortgage or caveat
• Lender: fundU, one direct lender rather than a broker panel

Ready to see if you qualify?

There’s no credit check when you enquire, and your details go to one direct lender, not a crowd of them. A specialist reads your enquiry and gets back to you.

Give us the property, what’s owing on it, the amount and the reason, and keep the figures exact. Accurate details about the security and its loans are what get you a reliable answer first time. Begin your 60-second enquiry.