Questions business owners ask before they borrow against property

Only when the need is specific, the amount leaves a comfortable equity cushion, and you know how the loan will be repaid. If the business needs money to cover ongoing losses, or the exit depends on hope rather than a plan, it's usually better to look at alternatives first.

Refinancing replaces your existing home loan with a new, larger one. A second mortgage leaves the existing loan untouched and adds a separate loan registered behind it. Owners often choose a second mortgage when their current loan has a structure or fixed period they don't want to break.

Yes. The whole point is that your first mortgage stays where it is. The first lender's position on the title generally needs to be respected, and in some cases its consent is part of the process, but you don't have to replace the loan.

Business-purpose second mortgages fall within a property-secured range of $20,000 to $5,000,000. The realistic amount for you depends on the property's value, what's already owed against it, the type of property and how the loan will be repaid. Our equity decision helper shows the effect of different amounts.

Many owners prefer to keep the family home out of it if another property has enough equity, because it limits what's at stake for the household. Investment and commercial properties can work well, though commercial property is usually lent against more cautiously.

If they're a registered owner of the property, yes. Every owner must sign the mortgage. They're entitled to understand what the money is for and how it will be repaid, and many choose to get independent legal advice first.

It can, through a guarantee supported by a mortgage over their property. It's a big ask. They should understand the business, the amount, the exit and the worst case, and get independent legal advice. Limiting the guarantee to a set amount is worth discussing.

Then the loan can't be secured on that property, and that's a reasonable outcome. It may point to a different property, a smaller amount or another kind of finance. A co-owner's hesitation is often a useful signal about the plan itself.

Contact the lender early. Options can include an extension, a revised arrangement or an orderly sale on your terms. If a default isn't resolved, the lender can ultimately enforce its security, which is why the exit plan and a cushion of equity matter so much from day one.

Borrow the smallest amount that solves the problem, keep a generous equity cushion, prefer another property if one is suitable, write down a specific exit with a fallback, and make sure everyone on the title understands the plan. Our page on protecting the family home goes into each of these.

No. Plenty of healthy businesses use one for a time-sensitive opportunity, such as buying a competitor, taking on a large contract or bulk-buying stock, when a bank's timeline or a full refinance doesn't suit.

No. There's no credit check when you first enquire. A credit check is only discussed if you decide to proceed with an application.

No. Your enquiry is read by one specialist who works through your situation. We don't sell or circulate enquiries.

Most of it. You enquire online, talk by phone, upload documents, verify identity digitally and e-sign where the lender allows. Mortgages are lodged electronically in most states, so there's no need to attend a settlement.

A recent idea of the property's value, your latest home loan statement, the amount and purpose, and how you intend to repay. Recent business bank statements and lodged tax returns or BAS help too. Accurate answers on the form mean we can match you properly first time.

No. Each second mortgage is priced on the borrower's own circumstances, including the property, the business and the exit. You'll get real pricing once a specialist understands your situation.

No. We arrange second mortgages for business purposes only, never personal or consumer lending.