Quick answer
A secured business loan is backed by an asset the lender can rely on if repayments stop, most often residential or commercial property. Because the lender carries less risk, secured loans can be larger and more flexible about credit history or trading time. Property-secured business loans range from $20,000 to $5,000,000 through first mortgages, second mortgages and caveat loans.
Key points
- Property-secured business loans run from $20,000 to $5,000,000
- Security can be residential or commercial property, as a first mortgage, second mortgage or caveat
- Equity, not just property value, decides how much the security supports
- Security can help when credit is patchy, the ABN is new or the amount is large
Security is the lender’s safety net. Give them one and they can usually say yes to more: a bigger amount, a newer business, a bumpier credit file or a tax debt that needs clearing.
The flip side is obvious. If the loan isn’t repaid, the asset is at risk. So a secured business loan deserves a clear plan and a repayment you can carry in a bad month, not just a good one.
What makes a business loan “secured”?
A loan is secured when the lender has a registered claim over an asset. For the business loans we arrange, that asset is property:
- First mortgage: the lender is first in line on a property with no other mortgage, or the loan pays out the existing one.
- Second mortgage: a new lender sits behind your existing home loan or commercial loan, using the equity in between. See second mortgage business loans.
- Caveat: a notice lodged on the title to protect the lender’s interest. Land Use Victoria describes a caveat as a document that, once registered, notes on the title that a third party might have rights over the property. See caveat business loans.
Property-secured business loans range from $20,000 to $5,000,000, against residential or commercial property.
The Reserve Bank’s October 2025 bulletin noted that property-based security still dominates small business lending, and that loans secured by residential property tend to be much larger than other loans. Security moves the dial on size.
How much does your property support?
Lenders look at equity: the estimated value of the property minus everything owed against it. They then lend up to a share of that value, called the loan-to-value ratio (LVR).
Illustrative equity check
| Example only | |
|---|---|
| Estimated property value | $1,200,000 |
| Existing home loan | $650,000 |
| Equity | $550,000 |
| If a lender’s maximum combined LVR were 70% | $840,000 total lending |
| Room left for a business loan | $190,000 |
The 70% is just for illustration. Real limits vary by lender, property type, location and the loan’s position (first or second). The point is the method: value, minus what’s owed, then a lender’s limit. Our page on how much a business can borrow walks through it further.
Halfway check: know roughly what your property’s worth and what’s owed? That’s all we need to start. Kick off step 1 and our expert will do the sums with you. No credit check to enquire.
When does securing a loan make sense?
Security tends to earn its keep when:
- The amount is bigger than turnover alone can justify unsecured.
- Credit is imperfect. Defaults, late payments or a past arrangement are easier to work through.
- There’s ATO debt. Clearing a tax debt with a secured tax debt loan is a common use.
- The business is young. A newer ABN with property behind it has more options.
- You want a lower repayment burden. Longer terms or interest-style repayments can be available with property security.
It’s less suitable when the purpose is small and short-lived, when the property is your only safety net and the plan is shaky, or when an unsecured business loan would do the job comfortably.
Repayment reality check (illustrative)
Secured loans can be structured two ways, and the difference is huge for cash flow. Invented figures, for a $400,000 loan over 12 months with a quoted total cost of finance of $48,000:
| Repayment style | Monthly repayment | Lump sum at the end |
|---|---|---|
| Spread evenly (principal and cost) | $37,333 | None |
| Cost during the term, principal at the end | $4,000 | $400,000 |
The second style is common for short-term property-secured lending. It’s light during the term but needs a solid exit: a sale, a refinance or a big receivable. Model both in the repayment planner.
What our expert will ask you on the call
- Which property, roughly what’s it worth, and what’s owed against it?
- Residential or commercial? Who’s on the title?
- What’s the money for, and how long do you need it?
- If it’s short-term, what’s the exit: a sale, a refinance, a contract payment?
- Any ATO debt or credit history we should factor in?
Myth or reality: secured business loans
“Secured means cheaper, full stop.” Not always. Security often reduces the cost, but short terms, setup costs and legal fees can narrow the gap. Compare the total cost of finance in dollars against an unsecured option over the same term.
“Only the business owner’s property can be used.” No. Property owned by a family trust, a company or, with care and advice, a family member can act as security, provided every owner agrees and signs.
“A secured loan has to be long-term.” Plenty of property-secured business loans run for months, not years, with the amount borrowed repaid at the end from a sale, refinance or big receivable.
“If I secure a loan, my credit history stops mattering.” It still matters. Security makes lenders more flexible, but they’ll still want to understand the story and see that the business can meet repayments.
Ready to put your property to work?
If you’ve got equity and a clear plan, a secured business loan can open bigger amounts and more forgiving terms than going unsecured.
Take the 60-second first step. There’s no credit check when you enquire, we don’t pass your details around a room full of lenders, and a real expert calls you back. Please give us accurate property details and figures on the form. It’s the quickest way to an option that actually fits.
Frequently asked questions
What can be used as security for a business loan?
For the loans we arrange, the main security is residential or commercial property, taken as a first mortgage, second mortgage or caveat. Equipment and vehicles are also used as security in asset finance, but that's a different product.
Can I use my home as security for a business loan?
Yes, many owners do. The loan must be for business purposes. Think carefully about the risk, make sure the repayments fit your cash flow, and get independent advice if you're unsure.
Does a secured loan mean my credit history doesn't matter?
It still matters, but security gives the lender a fallback, so past credit issues and ATO debt are often easier to work through. Each case is considered on its facts.
How much equity do I need?
It depends on the lender, the property type and location, and whether there's an existing mortgage. Your expert will work out a realistic figure from the property's estimated value and what's currently owed on it.
Are secured business loans always long term?
No. Some property-secured business loans are short-term, designed to bridge a gap or fund a specific project, with the amount borrowed repaid at the end from a sale or refinance.