Business-purpose finance only. Before using property equity to fund a business, check the purpose, available security, net funds, complete cost and repayment plan. Owning property does not guarantee that more borrowing is available or suitable.
This article does not offer home-renovation loans, personal debt consolidation or reverse mortgages. For the distinction, read our business-purpose versus retirement equity release guide.
1. Define exactly what the business needs
Prepare an itemised use-of-funds schedule. Identify the borrower, the business expenditure, the amount required and the deadline. Separate essential payments from optional spending and explain the commercial benefit of the proposed funding.
A request for “equity release” is not enough to establish the purpose. Supporting material might include invoices, contracts or a cash-flow forecast. Personal expenditure must not be described as business expenditure to seek commercial finance. See our business-purpose lending policy.
Output of this check: a clear amount, purpose and supporting evidence—not simply the maximum you hope to borrow.
2. Establish the property’s actual borrowing capacity
Equity is broadly property value less secured debt. Available borrowing may be lower because the lender applies its own accepted valuation, lending limit and assessment criteria. Existing mortgages, caveats and other interests must be disclosed.
Confirm ownership, current payout figures and the proposed security position. A second mortgage may require the existing lender’s consent or priority arrangements. Do not assume an online estimate or an advertised loan-to-value ratio establishes an approved amount.
Output of this check: a realistic security and debt summary, with unresolved valuation or title questions identified.
3. Calculate the net cash available
The gross facility is not necessarily the amount that reaches the business. Existing debt payouts, fees, legal costs and any retained interest can reduce the cash delivered at settlement.
Ask for an itemised funds schedule. Check whether it covers the full business requirement after deductions, and avoid counting the same funds twice. If there is a shortfall, decide whether it can be met without relying on another unconfirmed loan.
Our business-purpose equity release service provides the service context; any proposed facility remains subject to assessment.
Output of this check: a reconciliation between the proposed loan, all deductions and usable funds.
4. Compare the full structure and obligations
Compare proposals over the same expected period and for the same net amount. Review interest treatment, upfront and ongoing fees, minimum-interest terms, early repayment, extension costs and default provisions.
Understand the security and any guarantees before signing. A new facility may have consequences for existing finance, even when the first mortgage is not refinanced. Obtain independent advice on the documents and your exposure.
business.gov.au’s loan preparation guide recommends reviewing finances and comparing lender charges, terms, security and conditions. A headline rate alone is not a complete comparison.
Output of this check: an understood repayment schedule, total costs and legal obligations.
5. Test repayment if the plan is delayed
Identify the source of repayment and the evidence supporting it. A proposed sale, customer receipt or refinance can be delayed or fail. Allow for a realistic downside case rather than assuming everything happens on time.
If cash flow cannot support the obligations and there is no credible exit, adding secured debt may worsen the problem. Consider other actions with an accountant or appropriate adviser before proceeding. Failure to repay can put secured property at risk.
Output of this check: a documented repayment plan, realistic timing and a considered response to delay.
Questions to resolve before applying
Can property equity replace all financial checks?
No. The lender may require financial, valuation, liability and legal evidence. Requirements depend on the transaction and lender criteria.
Does completing this checklist guarantee approval?
No. It helps organise an enquiry but is not a credit decision, offer or promise of settlement.
Can Basic Finance arrange a reverse mortgage through this service?
No. This service concerns genuine business-purpose and commercial finance, not consumer or retirement products.
Discuss a prepared business scenario
Contact Basic Finance with the purpose, net amount, property, existing debt, deadline and repayment evidence. Finance remains subject to lender criteria, verification, due diligence and formal approval.
General information only, not personal financial, tax or legal advice.