Business equity loans

Use your residential or commercial property as security for your business loan.

Using your property as security isn’t just reserved for home loans. You can also use any equity you have in your home, or even commercial real estate, as security for a business loan. By doing so you might be able to take advantage of discounted interest rates and fees from a range of lenders. Find out what’s involved in this process, and how to compare equity loans to find the right option for you.

Prospa Business Loan Offer

Prospa Business Loan

  • Borrow up to $250,000
  • Same-day turnaround
  • Repay early without penalty
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100% confidential application

Prospa Business Loan Offer

The Prospa Business Loan allows you to borrow up to $250,000 for your business needs. The loan is available for new or existing business needs and features no upfront fee and no fees for early repayment.

  • Interest rate type: Variable
  • Application fee: $0
  • Minimum loan amount: $5,000
  • Maximum loan amount: $250,000
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Business lenders you can compare

Rates last updated February 24th, 2018
Name Product Min Loan Amount Max. Loan Amount Loan Term Application Fee Product Description
Prospa Business Loan
0.25 to 2 years
Apply for up to $250,000 and receive your approved funds within one business day. Note: Businesses must have a turnover of more than $5,000 per month and be able to demonstrate 6 months of trading history.
NAB QuickBiz Loan
1 to 3 years
An unsecured business loan from $5,000 that can be processed in 1 business day. Businesses that apply and are approved before 30 April 2018 are eligible for a discounted interest rate of 12.95% p.a.
Moula Business Loan
0.5 to 2 years
Small business loans of up to $250,000 approved and funded within 24 hours.
Transparent fees and rates. Note: Business must have been operating for at least 12 months and have monthly sales of at least $5,000.
Spotcap Loans
2 years
Take advantage of a fixed interest rate and no upfront fees with this business loan, available up to $400,000. Note: Business must have been operating for at least 18 months and have turnover over $200,000.
Sail Unsecured Business Loan
1 year
2.5% origination fee
Apply for up to $5,000 even if you have bad credit. Note: Business must have been operating for at least 6 months and have turnover over $50,000.
OnDeck Business Loans
0.5 to 2 years
$0 (2.5% origination fee)
Apply online for up to $150,000 with OnDeck and receive approved funds in one business day. Flexible Business Loan
0.5 to 1 years
1.5% Initial draw down fee
A 100% online business loan with amounts available from $5,000. Flexible eligibility criteria and transparent rates and fees.

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How do business equity loans work?

Equity loans require you to put up a property as security to take out a business loan, but you don’t have to own the property outright. Rather, you can use the amount of equity you own in the property as security for the loan. For example, if you own a $350,000 property and have $100,000 left to pay on your mortgage, you will have $200,000 of equity in the property, and therefore be able to put up $200,000 worth of security.

As this is a business loan, you will be required to submit a business proposal to the lender who will then determine whether this will be a good investment. Equity loans offer similar features to home loans, such as variable and fixed rate loan options, redraw facilities, interest-only repayments and valuation requirements for the property you will use as security.

How do I compare these types of loans?

  • Property type. Some lenders may only let you use either a residential or commercial property as security, although some may let you use either.
  • Loan to value of equity. Lenders will allow you to borrow up to a certain amount of the value of equity in your property, and this may also depend whether this is a commercial or residential property.
  • Interest rate. Equity loans may have higher interest rates than home loans due to the higher risk the lender takes on with a business loans.You should still compare your options as some lenders will be more competitive than others. You may also have a choice between variable and fixed rate options for equity loans.
  • Loan amount and terms. The loan amount and terms you are approved for will depend on the business proposal you put forward, the financial position you are in, and the amount of security you are able to offer. Still, you will be able to check the minimum and maximum loan amount and terms offered by the lender before you apply. Generally, loan amounts vary from between $50,000 to $1,000,000 and loan terms of five to 20 years.
  • Additional features. Some lenders may also offer additional features with equity loans, such as redraw facilities, a split loan option, interest-only repayments, and other features that you may want to take advantage of. Remember to check if there are any fees associated with these features.

The good and the bad


  • Discounted rates. As you are putting up part or all of your property as security, the lender is taking on less of a risk, and may offer you discounted rates and fees on your loan.
  • Access. These loans give people an way to start a business, who may not have had any ways to access finance before this.
  • Varied loan amount. Some lenders offer a wide range of loan amounts, giving options for people who want to start small or large businesses.


  • Risk. Using your residential or commercial property as security comes with inherent risks, especially with a business loan.

The risks that you should beware of

As equity loans require you to put up your own property as security, they are a risky endeavour to take on. Because of this, you should avoid applying for one of these loans without having an air-tight business plan. You should also avoid taking on one of these loans unless you are in a secure financial situation. This is because if, for any reason, you find yourself unable to make repayments on your business loan, you may find yourself losing your property and also with no income. These loans are risky, so make sure you consider the risks before you apply.

Frequently asked questions

  • Can I take out a business equity loan for an investment property? You are able to take out a loan for an investment property on behalf of a business, but some lenders may not let you take out an equity loan if you are an individual investing in property.
  • Are there restrictions on the type of property I can use? Different lenders may have restrictions, and you will also be required to carry out a valuation on the property.
  • Can the property I use as security be owned with someone else? This will depend on the lender, but generally, yes. You will have to provide their details when you apply.

Picture: Shutterstock

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