Property-backed options
Caveat loans
Fast, short-term loans secured by a caveat on your property title.
Find out moreSecond mortgages
Borrow against equity behind your existing loan, without refinancing it.
Find out moreBridging finance
Cover the gap until a property sale, refinance or contract payment lands.
Find out morePrivate lenders
Property-secured business loans from private funders when banks won't lend.
Find out moreHow property-backed business lending works
A property-backed loan uses real estate you already own as security for a business loan. Because the lender can rely on the property, it can lend larger amounts, move faster and look past things a bank would decline on, such as an ATO debt, a recent credit default or a short trading history.
The trade-off is cost and term. Most of these loans come from non-bank and private lenders, are priced above bank rates, and run for months instead of decades. They work best as a bridge to something definite: a sale, a refinance, a contract payment or the end of a cash crunch.
Which type suits you
| Loan type | How it's secured | Typical speed | Typical term | Often used for |
|---|---|---|---|---|
| Caveat loan | A caveat lodged on the title | Days | 1 to 12 months | Urgent needs, ATO deadlines |
| Second mortgage | A registered mortgage behind your existing loan | 1 to 3 weeks | 3 to 36 months | Larger amounts, longer terms |
| Bridging finance | First or second mortgage, often with capitalised interest | 1 to 4 weeks | 1 to 12 months | Buying before selling, timing gaps |
| Private first mortgage | A first mortgage from a private lender | 1 to 3 weeks | 3 to 24 months | When the bank won't lend, or won't lend in time |
Timeframes and terms are typical ranges, not guarantees. Each lender sets its own.
What lenders look at
- Equity. The property's value less what you already owe on it. Many private lenders cap total lending at around 65% to 75% of value, lower for vacant land or regional property.
- The exit. How the loan will be repaid: a sale, a refinance to a bank, a contract payment or business income.
- A genuine business purpose for the money, confirmed in writing.
- Your existing loan terms. Some first mortgages restrict further borrowing against the property.
What it costs
Expect a higher interest rate than a bank, an establishment fee, the lender's legal costs, a valuation and sometimes a line fee. Interest is often paid monthly in advance or capitalised, meaning it's added to the loan and repaid at the end. Your broker will put the total cost in writing, including every fee, so you can compare options properly.
Risks to understand
- The property is security. If the loan isn't repaid, the lender can take steps to recover it, which can include selling the property.
- Terms are short. Missing the exit date usually means default interest and extension fees.
- A loan doesn't fix a business that's losing money. Use it to bridge to something definite.