Secured business loans against property

Most business owners who own property already have the answer to their funding problem sitting on a title. The question is how to unlock it without months of bank paperwork, and without pulling apart a home loan or commercial facility that is working fine.

That is what a property-secured business loan does. This page puts every private structure on one page, shows how to pick between them, and explains timing, documents, cost and risk without the sales gloss.

What is a secured business loan, in plain terms?

The government’s business.gov.au guidance puts it simply: a secured loan is backed by collateral, and if the loan isn’t repaid the lender can take that security. An unsecured loan doesn’t put an asset at risk, so the lender leans much harder on the business’s financial history instead.

Security can be many things, from equipment to stock. On this site it means one thing only: real property, such as a home, an investment property, a shop, an office, a factory or, case by case, vacant or rural land. Property is the strongest security there is, which is why it unlocks larger amounts, faster decisions and room for borrowers a bank would turn away.

At a glance

• Amounts: $20k to $5m, for business purposes.
• Security: residential, commercial or industrial property; vacant land and rural property considered case by case.
• Structures: private first mortgage, second mortgage or caveat loan.
• Term: first mortgages 1 to 24 months; second mortgages and caveat loans typically shorter.
• Interest: can be prepaid or capitalised, so there may be no monthly repayments.
• Assessment: no formal valuation required; the property is assessed directly. See how property is assessed directly.
• Pricing: set per deal on security, LVR, term and exit.

Which secured structure fits: first mortgage, second mortgage or caveat?

The right structure depends on what is already on the title and how long you need the money. Here is the side-by-side.

	Private first mortgage	Second mortgage	Caveat loan
Where it sits	First on the title	Registered behind an existing first mortgage	A caveat on the title, not a registered mortgage
Existing bank loan	Paid out or none	Stays in place	Stays in place
Usual term	1 to 24 months	Typically shorter	Typically shorter
Titles office step	Mortgage registered	Mortgage registered, first mortgagee’s position considered	Caveat lodged
Relative cost	Lowest of the three	Higher, because the lender ranks behind	Higher, for the same reason
Best for	Debt-free property, or replacing a loan you want gone	Keeping a cheap bank loan while adding funds	Urgent, short needs; can convert to a registered second mortgage
Read more	Private first mortgages	Second mortgage business loans	Caveat loans

Some quick rules of thumb help most people land on the right column:

• The property is debt-free, or the current loan is a problem you’d rather clear. A first mortgage is usually cleanest.
• The bank loan is fine and you only need extra funds on top. A second mortgage keeps it intact.
• The deadline is days away and the amount is modest. A caveat loan is often quickest, and it can later be converted to a registered second mortgage if the term needs to run longer.

Still unsure? The 60-second structure quiz narrows it down, and the first vs second mortgage vs caveat guide goes deeper on each.

How does a private secured loan compare with a bank loan or an unsecured loan?

Each option has a place. The honest comparison looks like this.

	Bank loan secured on property	Unsecured business loan	Private property-secured loan
What drives the decision	Serviceability, financials, credit scoring	Trading history and credit file	Equity in the property and the exit
Typical time to a decision	Weeks	Days	Days, sometimes hours
Term	Long, often many years	Short to medium	Short: months, up to 24 for a first mortgage
Repayments	Monthly	Frequent, often weekly or daily	Can be none if interest is prepaid or capitalised
Size	Large	Usually smaller	$20k to $5m
Cost	Lowest	Often high	Between the two, priced per deal
What’s at risk	The property	Business assets and often a director’s guarantee	The property

A bank remains the cheapest long-term home for debt, which is why the most common exit from a private loan is a bank refinance once the problem has been solved. Unsecured lending suits small, quick needs where no property is available. A private secured loan is the bridge when the need is urgent, the amount is meaningful and the bank can’t move fast enough or won’t move at all. Our secured vs unsecured comparison and private lender vs bank guide cover the trade-offs in more depth.

What can a secured business loan be used for?

Any genuine business purpose. The situations that come up most often each have their own page:

• Paying an ATO debt with property equity before enforcement escalates.
• Settling a property purchase on time when the bank is late.
• Buying commercial property fast before a competing buyer does.
• Refinancing when the bank says no.
• Buying out a business partner.
• Funding a big contract before the first progress payment lands.
• Bridging until a property sells.
• Responding to a statutory demand inside the deadline.

The one firm boundary: the money must be for business, including property investment or development carried on as a business. Buying a home to live in is not covered.

Who is a secured business loan right for, and who should look elsewhere?

It tends to suit you if:

• you own property with real equity in it, in your name, a company or a trust;
• you have a deadline that a bank’s timetable can’t meet;
• your credit file, tax position or trading figures would trouble a bank, but the property and the plan are sound;
• there is a believable way out within months: a sale, a refinance, a contract payment or business cash flow.

Look elsewhere if:

• you need money for 10 or 20 years with no exit in sight; that is bank territory;
• there is little or no equity left after existing debts;
• the funds are for a personal or household purpose;
• the only repayment plan is “something will turn up”.

How does a secured business loan work, step by step?

1. Enquiry. You complete a 60-second enquiry about the property, what’s owing and the purpose. No credit check is run at this point.
2. Specialist call. A real person reviews it and rings to fill gaps: the exit, the timing, who owns the property.
3. Indicative terms. If it stacks up, you get the proposed structure, amount and term in principle.
4. Letter of Offer. The formal offer sets out the loan amount, term, interest arrangement, fees and conditions. Our guide to the Letter of Offer explains each part.
5. Documents and signing. Loan documents are prepared, signed and checked; your solicitor reviews them with you.
6. Settlement. Funds are released and the mortgage or caveat is lodged with the land titles office, usually electronically. Platforms such as PEXA exchange funds and lodge eligible documents with the land registry as part of the same settlement.
7. The term and the exit. You use the funds, carry out the exit, and the loan is paid out and the security discharged or withdrawn.

What documents will the lender ask for?

Fewer than a bank, but each one matters.

Document	Why it’s needed
Photo ID for every borrower, owner and guarantor	Identity checks before anyone signs
ABN or ACN details, and the trust deed if a trust is involved	Confirms who is borrowing and who has power to give security
Property details	Identifies the security being assessed
A current statement for any existing mortgage	Shows what’s owing and who ranks ahead
Evidence of the exit	A sale contract, refinance pre-approval, contract schedule or similar
A short explanation of the purpose	Confirms the loan is for business

The full checklist, including what changes for companies and trusts, is in documents for a private mortgage.

How fast can a secured business loan be funded?

Funding is possible within 24–48 hours for up to $5m once documents are in, and smaller property-secured amounts of $20k to $250k are possible the same day. Speed comes from three things:

• No formal valuation required. There’s no waiting for a report to be ordered, inspected and written.
• One direct lender. Your enquiry isn’t shopped to a panel, so there’s no auction delaying the answer.
• Paperwork ready early. ID, trust deeds and a payout figure from any existing lender are the usual bottlenecks.

What does a secured business loan actually cost?

There’s no published price list, deliberately. Each loan is priced on its security, LVR, term and exit, and the aim is the sharpest price your situation allows. The cost has a few parts:

• Interest, which can be paid monthly, prepaid or capitalised.
• An assessment fee, which varies per loan and appears on your Letter of Offer.
• Legal and settlement costs, including titles office registration fees.
• No report fee to pay up front: no formal valuation required, so that cost simply doesn’t arise.

A first mortgage generally costs less than a second mortgage or caveat loan, because the lender ranks first. To understand the total over the life of the loan, read private mortgage costs explained and the total cost of a short-term loan.

What are the risks, and how do you keep them small?

The property is genuinely at risk, so treat the exit as the most important part of the deal.

• The exit slips. Build in time; a sale that should take three months rarely takes less. If it slips, raise an extension early.
• Borrowing too close to the limit. Leave equity headroom. The equity calculator shows what you’d have left.
• Capitalised interest grows the balance. Check the figure at maturity, not just on day one.
• A caveat lapses or is challenged. If the term needs to run longer, convert to a registered second mortgage.
• Default. Missed deadlines can trigger default interest and, ultimately, enforcement. Early contact almost always produces better options.

Illustrative example: a Geelong joinery business wins a fit-out contract that needs $400k of materials and labour before the first progress payment, 10 weeks away. The director’s investment property is worth about $1.5m with $600k owing to a bank. Illustrative: a second mortgage of $400k takes total debt to $1m, an LVR of about 67%, leaving the bank loan untouched. Interest is capitalised so there’s nothing to pay during the job, and the loan is repaid when the second progress claim clears. Total time from enquiry to funds: three business days, because ID, the bank statement and the contract were ready on day one.

Ready to see whether your property can secure the loan?

The fastest way to an honest answer is to tell us what you own, what’s owing on it and what the money needs to do. You won’t trigger a credit check by enquiring, and your details won’t be sent around a list of lenders, because our lending partner fundU makes the decision and provides the funds. A specialist reads each enquiry and calls you back.

Be accurate about the property and the debts already on it. Those two answers decide the structure and the amount, and getting them right is how you get a reliable answer the first time.

Check your secured loan options in about 60 seconds, or start your enquiry now if the deadline is already close.