$1 million business loan secured by property

A million-dollar loan secured on property is where private lending looks most like a project. It usually involves a private first mortgage, sometimes across more than one property, a term measured in months rather than weeks, and an exit worth seven figures that has to land on time. Get the structure, the term and the exit right, and $1m can settle within 24–48 hours of the documents being in.

What does a $1 million secured loan usually look like?

Feature	Typical at $1m
Structure	Private first mortgage; a second mortgage only where a large bank loan stays
Security	One property, or two or more combined
Term	1 to 24 months
Interest	Prepaid at settlement or capitalised to the end
Borrower	Company or trust, with director or trustee guarantees
Exit	Bank refinance, property sale, business sale or settlement of stock

The private first mortgage business loans pillar covers the structure in depth, and short-term first mortgages explains how the term is chosen.

12 months or 24?

The term is the biggest cost decision at this size, because interest runs on the full balance for every month the loan is open.

Choose 12 months when	Choose 24 months when
A refinance is approved or close	The exit depends on a staged sale of several assets
A sale contract is signed or the property is listed	Leasing or planning steps must happen before refinance
The business case for a bank loan is already strong	The bank will want a full year of new accounts

A middle path is a shorter term with an honest conversation about an extension if the exit is genuinely on track. That’s easier to arrange early than at the deadline; see loan term extensions.

What does capitalised interest do to the end balance?

Capitalising interest means no repayments during the term, which is often the point. But the balance grows each month, and the exit must repay the final figure. On $1m over many months, the difference between the original advance and the end balance is significant, so the lender will test the exit against that end figure, not the starting one.

Illustrative example (net funds and end balance): a Melbourne logistics company buys out a competitor for $900k and secures the loan over its warehouse, worth about $1.9m, and the director’s investment unit, worth about $650k, both debt-free. Illustrative: lending to 45% of the combined $2.55m would allow about $1.15m.

• Loan: $1m private first mortgage for 12 months, interest capitalised
• Less assessment fee, legal and registration costs: say $20k
• Net funds at settlement: about $980k, covering the $900k purchase and transition costs
• End balance: $1m plus 12 months of capitalised interest (figure set on the Letter of Offer)
• Exit: a bank acquisition loan once a full year of combined accounts is lodged, with sale of the investment unit as the fallback The capitalised interest worked example shows the month-by-month build-up, and prepaid or capitalised interest compares the two options. Victorian title and tax points are on the Melbourne private lender page.

What do business owners use $1 million for?

• Paying out an expiring private loan that won’t be extended. See pay out an expiring private loan.
• Buying a business with property as security. See buy a business with property security.
• Carrying completed development stock while it sells. See residual stock loans.
• Buying commercial or industrial premises before the bank is ready.
• Replacing a bank facility that’s being recalled.

How much equity does $1m need, and can two properties share it?

At this size the equity test is about the end balance, not the advance. Add the $1m, the interest over the term if it’s capitalised, and the costs, then ask whether the security still leaves a comfortable cushion if the exit takes longer than planned.

When one property can’t carry that alone, two or more can be combined. A common pattern:

Security mix	Why it’s used
Business premises plus the director’s investment property	Spreads the loan so neither property is stretched
Several completed townhouses or units	Each sale can reduce the loan as it settles
A debt-free property plus one with a small bank loan	The bank loan is paid out and both sit under one first mortgage

Combining properties does add work: every owner of every title signs, and releasing one property early needs agreement on how much of the loan it repays. The multiple properties as security page explains cross-securing in detail, and release equity from an investment property covers the most common second security.

What changes at settlement and exit at this size?

• Clearance certificates. If a sale is the exit, apply early. Since 1 January 2025, unless an Australian resident seller provides an ATO clearance certificate, the buyer must withhold part of the price, whatever the value.
• Victoria’s CIPT. Commercial and industrial land that enters the regime from 1 July 2024 pays duty on that entry and an annual tax from ten years later. Any government transition loan used for the entry duty carries a first-ranking statutory charge on the land.
• Multiple owners and entities. Every registered owner signs, and trustees must have the power to give security.

How does $1m from a private lender compare?

	Private first mortgage	Bank commercial loan	Large non-bank	Equity partner	Sale and leaseback
Speed	24–48 hours possible	Weeks to months	Weeks	Months	Months
Term	1 to 24 months	Years	Years	Open-ended	Long lease
Decided on	Property and exit	Financials and servicing	Fixed criteria	Their view of the business	The buyer’s terms
Repayments	Can be none during term	Monthly	Monthly	None, profits shared	Rent
Fits	Short, defined need	Long-term borrowing	Long-term, outside bank policy	Growth capital	Releasing all the capital

Debt and equity each have their place: business.gov.au notes that debt lets you keep full ownership while equity means sharing profits and, often, decisions. For a view on going direct versus through a broker, see direct private lender vs finance broker.

How does it work?

1. Enquire in about 60 seconds: properties, existing debt, amount, purpose and exit. No credit check.
2. Structure session with a specialist: which properties, which term, prepaid or capitalised.
3. Letter of Offer stating the amount, term, interest, end balance basis and assessment fee.
4. Legal review and signing; identity verification for every owner, director and guarantor.
5. Settlement, paying out existing lenders and registering the first mortgage.
6. Exit and discharge.

Who suits a $1m secured loan?

Established businesses, investors and developers with strong property equity, a sizeable one-off need and an exit that’s documented, dated and bigger than the end balance.

When isn’t it the right move?

• When a long-term lender can meet the timeline. It will cost less over years.
• When the exit is one sale in a thin market with no fallback.
• When the end balance would leave little equity if the exit slipped.
• When the purpose isn’t business.

Documents you’ll need

• ID for every owner, director and guarantor; company and trust documents.
• Title details and statements or payout letters for all debt on each property.
• The contract, acquisition agreement or payout letter behind the need.
• Exit evidence: refinance approval or term sheet, sale contract, listing agreement.

What it costs (without the guesswork)

Interest over the term is the dominant cost at $1m, which is why the choice of term matters so much. Each loan is priced on its security, LVR, term and exit, and the aim is the sharpest price the deal supports. Alongside interest, prepaid or capitalised, sit a small assessment fee stated on the Letter of Offer, legal and registration costs, and discharge costs. There’s no formal valuation required, so there’s no report fee.

Seven-figure need, short timeline? Start your enquiry.

Need around $1m? See if you qualify

Send the properties, what’s owed on each, the amount, the purpose and the exit. No credit check is run when you enquire, your details go to one direct lender rather than a list, and a specialist reads the file and calls with a clear view on structure, term and end balance.

Accurate details on every property and existing debt make the first answer the right one. See if you qualify, or read the $2m to $5m page for larger loans.