Our verdict Often, yes
The short answer
Often, yes. Property-secured business loans lean mainly on the equity in residential or commercial property and a clear plan to repay, rather than income alone. That suits owners who are asset-rich but income-light on paper — after a loss year, a restructure or a quiet patch. The exit plan matters most: refinance, sale of an asset, or trading income that's genuinely on the way.
Key points
- Property-secured loans weigh equity and the exit plan more heavily than income.
- Loans from $20,000 to $5,000,000 via first mortgages, second mortgages or caveats.
- A believable way out — refinance, sale or incoming money — is the heart of the assessment.
- It's a tool for bridging and building, not for propping up a business that loses money.
What does “asset-rich, income-light” look like?
It’s more common than you’d think. Some examples we hear:
- A business had a loss year after investing heavily, but the owners have a lot of equity in their home.
- A retiring owner has sold part of the business, so income has dropped, but they own commercial premises outright.
- A new venture hasn’t produced income yet, but the founder owns an investment property.
- A business has an ATO debt that’s making its figures look ugly, but there’s plenty of property behind it.
In each case, a lender looking only at income would say no. A lender looking at the whole picture might say yes.
How are property-secured loans assessed?
Property-secured business loans — $20,000 to $5,000,000 through first mortgages, second mortgages or caveat loans over residential or commercial property — are assessed on three main things:
| Question | What the lender looks for |
|---|---|
| Is there enough equity? | Property value, what’s already owed, property type and location |
| Is the purpose genuine? | A real business use — not personal spending |
| How will it be repaid? | A specific, believable exit |
Income still matters — lenders want to know repayments can be met during the loan — but it doesn’t carry the whole assessment the way it does at a bank. Past credit issues and ATO debt are considered case by case.
Plenty of equity, thin figures? Tell us about both — 60 seconds, no credit check to enquire.
Why is the exit plan so important?
Because for many of these loans, especially short-term ones, the lender isn’t expecting to be repaid from monthly trading alone. They want to know the moment the loan gets paid out, and how.
Common exits:
- Refinance to a bank or longer-term lender once the reason for the thin income has passed — another year of figures, a paid-off ATO debt, lodged returns.
- Sale of a property, a business, equipment or another asset.
- Incoming money — a contract payment, insurance claim, grant, R&D refund or settlement that’s clearly on the way.
- Trading income that’s genuinely building, with evidence.
The more specific and documented, the better. “We’ll sell the investment unit — here’s the agent’s appraisal” beats “we’ll sort something out”.
When isn’t this a good idea?
When the business loses money at its core and the loan just delays the inevitable. Borrowing against your home to keep an unviable business running can put the home at risk without fixing anything. If that sounds close to home, talk to your accountant before you borrow. Our pages on made a loss and revenue dropped can help you tell a temporary dip from a deeper problem.
An illustrative example
For illustration only.
A couple own a small manufacturing business that had a rough year after a major customer went under, leaving a large bad debt. Their tax return shows a loss and they owe the ATO $85,000. They own their home and a commercial unit with strong equity.
- The bank declines on income and the ATO debt.
- A loan secured over the commercial unit clears the ATO debt and funds equipment to take on a new customer.
- Their exit is a refinance to a bank after one clean year of figures, with the sale of the commercial unit as a fallback.
If your equity is in commercial premises, see our page on commercial property as security. If your home already has a loan, see homes that are already mortgaged.
What paperwork proves an exit plan?
An exit plan is only as strong as the evidence behind it. Match each type of exit with something a lender can read:
| Exit | Evidence that helps |
|---|---|
| Refinance to a bank | What the bank needs and when you’ll have it — lodged returns, a clean year |
| Sale of property | Recent agent’s appraisal or listing agreement |
| Sale of a business or asset | Heads of agreement, broker’s appraisal |
| Contract payment | Signed contract and payment schedule |
| Insurance claim | Claim acceptance and expected payment date |
| Refund or grant | Lodgement confirmation and expected timing |
| Trading income | Bank statements showing the trend, signed work ahead |
A lender won’t hold you to an exact date, but they want to see that the exit is real, specific and within the loan term. A backup exit — “if the refinance is delayed, we’ll sell the investment unit” — makes the plan stronger still.
If your exit depends on clearing an ATO debt or recovering from a loss year, read those pages for how lenders see each.
One last point on timing. Property-secured loans involve a valuation and legal documents, so they take a little longer to arrange than a simple unsecured facility. Starting the conversation early — before a deadline is breathing down your neck — gives you room to get the valuation done, gather exit evidence and make a calm decision rather than a rushed one. It also leaves time to talk to your accountant about how the loan fits your tax position.
Let a real person weigh the whole picture
Equity is one of the most powerful tools a business owner has — used carefully, with a clear way out.
There’s no credit check just for asking, and your details don’t get passed from lender to lender. A real person looks at your property, your purpose and your exit, then calls you. Please be accurate on the form about the property’s value, what’s owed on it and how you’d repay, so our first answer is one you can rely on. See if you qualify.
Frequently asked questions
What is an 'exit strategy' for a business loan?
It's how the loan will be repaid, especially for a short-term facility. Common exits are refinancing to a bank or longer-term loan once figures improve, selling a property or asset, or a known payment like a contract settlement or insurance claim.
Is this the same as a 'low doc' loan?
It overlaps. Property-secured lending often needs fewer income documents because the security carries more weight. You'll still need ID, details of the property, the purpose and the exit plan.
How much of my property's value can I borrow against?
It depends on the property type, location, what's already owed on it and the lender. We don't quote a set figure because it varies — a real person can give you a realistic view once they know the property.
Does the property have to be in my name?
Not necessarily. A partner, family member, related company or trust can offer it with their agreement. See our pages on a partner's property and property in a trust.
Is borrowing against equity risky?
Yes, the property is at risk if the loan isn't repaid. That's why the exit plan matters so much, and why this route suits a clear purpose with a clear way out.