Short-term finance for companies and trusts: who signs, who guarantees, what's checked

Most established Australian businesses don’t trade in the owner’s personal name. There’s a Pty Ltd that runs the business, often a family trust that owns the property, and sometimes a second company holding equipment or leases. Short-term private lending handles all of that comfortably — as long as we know early who owns what and who can sign.

Can a company or trust borrow short-term against property?

Yes. Companies and trusts borrow on the same short-term structures as individuals:

• a short-term first mortgage, where nothing ranks ahead of the lender;
• a registered second mortgage, behind an existing loan; or
• a caveat loan, which we write for Victorian property. Outside Victoria, a registered second mortgage does the same job and is usually arranged just as quickly.

Loans run from $20,000 to $5,000,000, for business purposes, against residential or commercial property, over a term measured in months rather than decades. The entity side adds a few checks and signatures; it doesn’t change the basic decision, which still rests on the property, the purpose and the exit.

Who signs and who guarantees?

Structure	Borrower	Who signs the loan	Who usually guarantees
Company owns the property and runs the business	The company	Directors (or a director and secretary) under the company’s signing rules	Each director, personally
Company runs the business, owner holds the property personally	The company	Directors for the company; the owner signs the mortgage as a third party	Directors, plus the property owner
Trust with a corporate trustee	The trustee company, as trustee of the trust	Trustee company’s directors	Trustee company’s directors
Trust with individual trustees	The individual trustees	Each trustee	Usually the trustees personally
Property in a related entity (e.g. a property trust)	The trading company	Trading company’s directors, plus the property entity as mortgagor	Directors and the property entity

Guarantees aren’t a formality. A director guarantee means the lender can look to that director personally if the company doesn’t repay. Read the guarantee before you sign it, and know whether it’s limited to this loan or covers all money owed to the lender. Our page on property in a trust or company covers the security side in more depth.

What does the lender check on the entity?

Before documents are drawn, our solicitors confirm the entity is what it says it is and that the right people are signing for it:

• ASIC company extract — current directors, shareholders, registered office and status. Anyone can search the company register through ASIC (ASIC registers).
• ABN and GST status — through the free ABN Lookup service, which shows whether an ABN is active and registered for GST (ABN Lookup).
• Director IDs — every director of an Australian company needs one, and ASIC describes it as a unique number “that you keep forever” (ASIC). Have each director’s ID handy.
• Trust deed — the full deed plus every variation, so the solicitor can confirm the trustee can borrow, mortgage and guarantee for this purpose.
• ID for every signer and guarantor.

A full list, in the order you’ll be asked, is in the documents checklist.

Running the business through a company and need funds quickly? Tell us the structure in a 60-second enquiry and we’ll flag any signing issue on the first call.

What if the property sits in a different entity from the business?

This is the most common set-up we see, and it’s routine. The trading company borrows; the entity that owns the property — you personally, a family trust, a property company — provides the security. That entity signs the mortgage as a third-party mortgagor and usually a guarantee as well.

Two points save time here:

1. Everyone who owns the property must sign, even if they have nothing to do with the business. A spouse who co-owns the home is the classic example.
2. The property entity needs the power to give security for someone else’s debt. Most modern trust deeds allow it; some older deeds need checking or a variation.

Illustrative example: a two-entity group with a tight deadline

Illustrative only — rounded numbers, not a real client.

A food distribution business trades through a Pty Ltd. The owners’ family trust owns a small industrial building in Melbourne’s west, worth about $1,600,000 with $400,000 owing to a bank. One of the original founders wants out, and the remaining owners need $500,000 to buy his shares by the end of the month.

• Borrower: the trading company.
• Security: a caveat over the trust’s Victorian property, with the trust as third-party mortgagor.
• Guarantors: the two remaining directors and the trustee company.
• Combined debt: $900,000 against $1,600,000 — about 56% LVR.
• Exit: refinance with the bank in a few months, once the share transfer is complete and the accounts reflect the new ownership.

The hold-up risk wasn’t the property or the numbers — it was the trust deed, which had been varied twice. Producing both variations on day one kept the file moving. More on this situation at paying out a business partner.

What causes last-minute delays on entity loans?

• A trust deed that can’t be found, or variations missing.
• A director who has resigned on paper but is still listed with ASIC — or the reverse.
• A co-owner of the security property who wasn’t told about the loan.
• Company details that don’t match across ASIC, the ABN register and the title.
• A director without a director ID.

Every one of these is fixable, but each takes longer to fix on settlement day than on enquiry day.

Bring the whole structure to the first conversation

Companies and trusts are normal territory for short-term private lending. The trick is laying the structure out early so the right security and signatures are lined up from the start.

The enquiry takes roughly 60 seconds and involves no credit check when you first enquire. Your details aren’t scattered across a pile of lenders, and there’s no broker in the middle — a real person on our desk works through your structure and calls you. Please answer accurately — who owns the property, which state it’s in, what’s owed and the deadline — so we can map the entities correctly first time.

Start with your structure →