Selling shares, a vehicle or spare gear instead of borrowing against your home

Sometimes the money a business needs is already sitting somewhere else in the owner’s life: a parcel of shares bought years ago, a second ute that rarely leaves the shed, a piece of machinery from a line of work the business has moved on from. Before putting a mortgage on the home, it’s worth asking whether one of those could do the job instead.

Why consider selling before borrowing?

Selling has three clear advantages:

• No new debt. Nothing to repay, no interest, no term.
• No mortgage on the title. Your home and its co-owners aren’t involved.
• It tidies up. Idle assets cost money to insure, store and maintain.

business.gov.au’s guide to improving cash flow includes leasing, refinancing or selling under-used assets as one of the practical levers available to a business. It’s often overlooked because owners are attached to things, or because a loan seems quicker.

What makes an asset a good candidate to sell?

Question	A good candidate if…
Is it earning its keep?	It returns little or nothing
Would you buy it again today?	Probably not
Is it worth roughly what you need?	Its net sale value covers a meaningful share
How long would it take to sell?	Within a timeframe that fits the need
What’s the tax on selling?	Manageable after advice

Shares that pay a modest dividend, a vehicle used a few times a year, or equipment from a discontinued service line often tick most of these boxes.

What are the downsides?

• The asset is gone. If the shares would have grown, or the equipment might be needed again, that’s a real cost.
• Tax. Selling an asset at a gain can trigger capital gains tax. Business assets can also raise GST and depreciation questions. The ATO’s guidance on property and capital gains tax is a reminder that how an asset has been used affects the tax outcome. Speak to your accountant before you sell.
• Time. Selling a vehicle can be quick; selling land or a business stake rarely is. If the need has a firm deadline, a sale may not settle in time.
• Price pressure. Selling in a hurry, or into a soft market, can mean accepting less.

What about selling part and borrowing part?

This is often the most balanced answer. Selling an asset that covers part of the need reduces how much you borrow, which reduces the risk to your home and the cost of borrowing. For example, if the business needs $250,000 and a share portfolio would net $100,000 after tax, borrowing $150,000 against property with a comfortable cushion is a very different proposition from borrowing the whole amount. Illustrative only.

If you’re weighing a mix like that, it’s worth talking it through with a specialist. There’s no credit check when you first enquire.

Can a second mortgage bridge to a sale?

Yes, and it’s one of the cleanest ways a second mortgage can be used. If you’ve decided to sell an asset but it won’t settle before the business needs the money, a short second mortgage can bridge the gap, with the sale proceeds as the exit.

For that to work well:

1. The asset is identified and everyone with an interest agrees to sell.
2. Its value is realistic, based on recent evidence, not hope.
3. The timeline allows for delays. Choose a loan term with slack.
4. There’s a fallback if the sale is slow or short.

Our exit plan checklist is built for exactly this test.

What about selling the business itself?

That’s a much bigger decision, usually driven by more than funding. If it’s on your mind, business.gov.au’s guide to selling a business sets out the steps, from confirming your decision and valuing the business to handling tax and transferring leases and licences. A partial sale, such as selling a division or a minority stake, sits between selling an asset and taking on an investor.

A simple way to compare

Write down, for the asset you’re considering:

• What it would sell for, net of costs and tax (ask your accountant).
• What it earns or saves you each year by keeping it.
• How long a sale would realistically take.

Then compare that with borrowing the same amount: the cost of the loan over the time you’d hold it, and the risk to your property. Often the comparison is obvious once it’s on paper.

What if family members share the asset?

Assets held jointly, such as shares in a family company, a holiday house owned with siblings, or equipment in a partnership, need everyone’s agreement to sell. That can take time and may not be welcome. Raise it early, explain why, and be ready for a different answer. If agreement isn’t possible, a smaller loan or a different asset may be the practical route.

It also helps to separate the conversation about selling from the conversation about the business. Co-owners of an asset may be happy to sell for their own reasons, such as tidying up an estate or freeing up their own cash, even if they’d rather not be involved in your business decision. Keep the two discussions distinct, get a fair valuation everyone trusts, and make sure each person receives their share properly at settlement.

Talk through selling, borrowing or both

If you have assets you could sell and you’re not sure whether to sell, borrow or combine the two, include them in a short enquiry. One specialist will help you think it through, with no credit check at the enquiry stage and no passing your details to other lenders. Please list the asset, its rough value and how long a sale might take, as accurately as you can.

Help me weigh selling against borrowing →