Business equity loans

Compare business loans that let you use your residential or commercial property as security.

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If you have equity in your house or commercial real estate, you may be able to use it as security against a business loan and get access to a lower rate.

Find out how business equity loans work and if they're right for you below.

Prospa Business Loan Offer

Prospa Business Loan Offer

  • Same day funding
  • Flexible repayments
  • Unsecured and secured options
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100% confidential application

Prospa Business Loan Offer

Get access to a small business loan from $5,000 - $300,000 with a limited time 6 week repayment pause and the chance to win $6,000 if your loan is settled before 31 December 2019. T&Cs apply, click "go to site" to view on Prospa site.

  • Loan Security: No asset security required to access funds up to $100,000
  • Interest rate: from 9.9% p.a. to 26.5% p.a.
  • Comparison rate: from 11.75% p.a. to 33.5% p.a.
  • Establishment fee: 3% origination fee
  • Minimum Turnover: $6,000 per month
  • 6 months trading history as a new business
  • 3 months trading if purchasing an existing business
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Compare business equity loans now

Updated November 23rd, 2019
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Apply Now
3 months to 2 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 2 years.
Note: New loans settled by 31 December 2019 offer a 6 week repayment pause to use when they choose plus the chance to win $6,000. T&Cs apply, click "go to site" to view on Prospa site.
3 months to 1 year
3% origination fee
An unsecured business loan up to $300,000 for eligible businesses. Businesses operating for a minimum of 6 months and having turnover of at least $10,000 a month can apply.
6 months to 2 years
2.5% origination fee
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
3 to 18 months
2.5% establishment fee
Apply for up to $200,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.
6 months to 2 years
$0 establishment fee
A flexible business loan up to $500,000 with convenient top up and redraw facilities. Business must have been operating for 9 months+ and have monthly sales of $10,000+. Note: The establishment fee will be waived if you apply and are approved before 30 November 2019.
6 months to 3 years
$0 application fee
A loan of up to $500,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales. Note: Get the chance to win $2,020 in a prize draw if you submit your application between 1 November 2019 and 30 January 2020.
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
1 month to 1 year
$0 application fee
An unsecured business loan from $2,000 that offers convenient pre-approval and no early repayment 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 the loan. You don't have to own the property outright, but can just use the amount of equity you own in the property. For example, if you own a $350,000 property and have $100,000 left to pay on your mortgage, you will have $250,000 of equity in the property, and therefore be able to put up $250,000 worth of security.

Unlike other business loans, equity loans are available to new businesses provided you submit a detailed business plan as part of your application.

Like home loans, business equity loans may offer features 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 percentage of the value of equity in your property. This percentage may vary based on whether you use a commercial or residential property, your credit history and the lender itself.
  • Interest rate. Equity loans generally have higher interest rates than home loans due to the higher risk the lender takes on with a business. You should still compare your options as some lenders will be more competitive than others and may give you the choice between variable and fixed rate options for equity loans.
  • Loan amount and terms. The loan amount and terms you are offered will depend on the business proposal you put forward (if you are a new business), your financial position and the amount of security you are able to offer. 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 $5,000 to $1,000,000 with loan terms of three months to twenty 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.

Benefits of business equity loans

  • 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 compared to unsecured business loans.
  • Access. Unlike other business loans, which may require your business to be a certain age and have a minimum turnover, you can generally use an equity loan to finance a new business.
  • Varied loan amount. Some lenders offer a wide range of loan amounts, giving options for people who want to start small or large businesses.

Mistakes to avoid

  • Having no business plan. If you have a new business, you will need to provide a detailed business plan in order to get approval for a business equity loan.
  • Using the same lender. You don't necessarily have to take out the equity loan with the same lender as your mortgage. It's worth researching a number of lenders and options to find the loan that is right for you.
  • Borrowing more than you can afford. Since a business equity loan risks the equity you have in a property, the consequences of failing to pay off the loan will be more severe. If you default on the loan, you will likely also lose the equity you have in your house.

How to apply for a business equity loan

Frequently asked questions

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