Equity release business loans: turning property value into working money

Lots of business owners are asset-rich and cash-tight at the same time. The house has grown in value, the investment unit is nearly paid off, the warehouse was bought years ago — but the business account is thin and the opportunity or problem in front of you won’t wait. An equity release business loan is the bridge between the two: it lets the property fund the business without anyone signing a sale contract.

What is equity release for a business, in plain terms?

Equity is the gap between what a property is worth and what’s owed on it. Releasing equity means borrowing against that gap, with the property as security. business.gov.au defines security as property or assets “a lender can take ownership of when a loan is not repaid”, which is the trade-off in one line: you keep the property and its future growth, and we hold a claim over it until the loan is repaid.

This is common in Australian small business. An October 2025 RBA Bulletin on small business conditions noted that new loans secured with residential property are, on average, four and a half times as large as loans secured by other assets. Property is what unlocks the bigger numbers.

Which short-term structure releases the equity?

This is where a lot of owners get stuck, and it’s simpler than it looks. Three facts decide it: what’s already on the title, which state the property is in, and how long you need the money.

Situation on title	State	Usual structure
Nothing owing	Any	Short-term first mortgage
Existing loan you’d like to keep	Victoria	Short-term caveat loan
Existing loan you’d like to keep	Anywhere else	Short-term registered second mortgage
Existing loan you’re happy to pay out	Any	Short-term first mortgage that clears the old loan and releases the balance

Caveat loans are written for Victorian property. In every other state and territory, a registered second mortgage does exactly the same job and is usually arranged just as quickly — so the structure follows the address, not the other way round.

How much of my equity can actually be used?

Not all of it. A lender works to a maximum combined loan-to-value ratio (LVR) across every loan on the property, leaving a buffer in case values move or a sale takes longer than planned. That buffer is bigger for property that’s harder to sell, such as specialised commercial buildings or remote land.

A quick way to think about it:

1. Take a realistic value — what it would sell for in a reasonable time, not the best-case figure.
2. Subtract everything owing on it.
3. Accept that only part of what’s left can be borrowed.

Our page on how equity is calculated works through this step by step, and the borrowing calculator gives you a first estimate in under a minute. When you’re ready for a real answer, send us the property details.

Illustrative example: equity in the investment unit

An illustration only — round numbers, no real client, no rates.

A Perth electrical contractor wants to tender for a large commercial job but needs $350k of working capital in place to show the head contractor he can fund materials and crews for the first two months. His family home has a bank loan he doesn’t want to touch. He also owns an investment unit in Fremantle worth about $750k with nothing owing.

• Structure: the unit has a clean title and no existing loan, so a short-term first mortgage over the unit fits best. The home loan isn’t involved.
• Equity: $350k against $750k is an LVR of about 47%, leaving a healthy buffer.
• Time needed: about six months, until the job’s progress payments are flowing.
• Exit: progress claims, with refinance to a longer-term lender as a back-up.

Because the unit carries no other debt, the contractor keeps his family home completely out of the arrangement — often the main reason owners prefer one property over another.

Which property should I release equity from?

If you own more than one, the choice matters. Owners often prefer to:

• use an investment or commercial property ahead of the family home;
• use a property with no existing loan, which keeps the structure simple as a first mortgage;
• avoid a property that’s about to be sold or refinanced, unless that sale is the exit;
• pick the property with the clearest title — one owner, no disputes, nothing unusual registered.

Using your home is perfectly common, though. Our page on residential property as security covers how we approach it.

What do owners use released equity for?

Anything with a genuine business purpose. The jobs we see most often fall into a handful of groups:

• Clearing pressure: an ATO debt, a supplier on stop, overdue wages or super.
• Seizing an opportunity: a big order, a new contract, discounted bulk stock, a competitor’s business for sale.
• Property moves: the deposit on business premises, or covering the gap until another property settles.
• Restructuring: paying out a departing business partner, or clearing several expensive short-term debts into one.

Business Victoria makes the point that owning premises lets you build equity to borrow against as the business grows — equity release is simply that idea put to work. The one thing it isn’t for is personal spending; these are business-purpose loans only.

Why not just sell or refinance with the bank?

Selling takes weeks to months and ends your ownership. A bank refinance can take a similar time and usually needs full, current financials. Short-term equity release is built for the gap: money now, secured against what you own, repaid from a sale, a refinance or business income once the pressure has passed. It’s a tool for months, not decades.

Put your property to work — find out how much

If there’s equity sitting in a property and a business need in front of you, it’s worth a minute to see what’s possible. The form takes about 60 seconds, and there’s no credit check when you first enquire. Your enquiry isn’t broadcast to a string of lenders — it comes to us, and a real person who understands property-secured lending calls you about your actual situation.

Please be accurate about the property, especially its address, the state it’s in, what’s owed on it and when you need the funds. That’s what lets us choose the right structure the first time.

Find out what you can release →