Business equity loans

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.

Heritage Bank Fully Drawn Business Loan

Heritage Bank Fully Drawn Business Loan

• Fixed and variable rate options
• Redraw facility upon request
• Penalty-free extra repayments

100% confidential application

Heritage Bank Fully Drawn Business Loan

Borrow from $20,000 and use to finance large business purchases and managing long-term cash flow. Secure with either a residential or non-residential property.

• Loan security: Secured
• Upfront fee: Application fee is available upon application
• Minimum loan amount: $20,000
• Maximum loan amount:
• Minimum loan term: 1 year
• Maximum loan term: 25 years

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Name	Product	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee	Filter Values
Heritage Bank Fully Drawn Business Loan		$20,000	No maximum amount	1 to 25 years	Application fee is available upon application		Get access to a loan from $20,000 with no maximum limit with Heritage Bank. Loans can be secured by residential and non-residential property and have terms of up to 25 years.	Go to site More Info	Compare	loading Fetching your data...
Moula Business Loan		$5,000	$250,000	1 to 2 years	2% Establishment fee		A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.	Go to site More Info	Compare	loading Fetching your data...
Swoop Finance Business Loan		$1,000	$100,000,000	1 to 30 years	Depending on your loan contract		Apply online and borrow between $1,000 and $100,000,000. Options for good and bad credit borrowers.	Go to site More Info	Compare	loading Fetching your data...
Lumi Unsecured Business Loan		$5,000	$300,000	3 months to 3 years	2.5% establishment fee		Apply for up to $300,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.	Go to site More Info	Compare	loading Fetching your data...
ebroker Business Loan		$5,000	$5,000,000	1 month to 30 years	$0 application fee		Small business loans available between $5,000 and $5,000,000. Get access to 70+ non-bank lenders on this independent platform.	Enquire now	Compare	loading Fetching your data...
Max Funding Unsecured Business Loan		$3,000	$30,000	1 month to 1 year	$0 application fee		An unsecured business loan from $3,000 that offers convenient pre-approval and no early repayment fees.	Go to site More Info	Compare	loading Fetching your data...
Valiant Finance Business Loan Broker		$5,000	$1,000,000	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.	Enquire now	Compare	loading Fetching your data...
OnDeck Business Loans		$10,000	$250,000	6 months to 2 years	3% of loan amount		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.	Go to site More Info	Compare	loading Fetching your data...
Octet Trade Finance		$200,000	$8,000,000	1 month to 2 years	Transaction fee 2.5%		Access a line of credit to pay suppliers in over 65 countries. Borrow from $200,000 up to $7 million.	Go to site More Info	Compare	loading Fetching your data...
Prospa Business Loan		$5,000	$300,000	3 months to 3 years	3% origination fee		Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $6,000 is necessary.	Go to site More Info	Compare	loading Fetching your data...
ANZ Secured Business Loan		$10,000	$10,000,000	Up to 15 years	$600		Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.	Enquire now	Compare	loading Fetching your data...
ANZ Unsecured Business Loan		$10,000	$1,000,000	Up to 15 years	$600		Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.	Enquire now	Compare	loading Fetching your data...
Westpac Business Loan		$20,000	$1,000,000	1 to 30 years	$0 application fee		Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.	Enquire now	Compare	loading Fetching your data...
Heritage Bank Business Line of Credit		$50,000	$500,000	Up to 25 years	The application fee amount is available upon request		Get access to a credit limit from $50,000 to $500,000 on terms of up to 25-years.	Go to site More Info	Compare	loading Fetching your data...

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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

• Calculate how much you need to borrow.
• Have existing equity in your property to cover the loan amount.
• If applying as a new business, create a detailed business plan.
• Compare equity loans to find the one that is best for you.
• Apply for the loan.

Need to manage cash flow?

If your business has outstanding invoices, invoice financing may be an option for you. It's a type of business loan that comes with reduced risk and no asset requirements or interest payments.

Compare the invoice financing products below.

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Name	Product	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee	Filter Values
Timelio Invoice Finance		$10,000	$100,000,000	Up to 4 months	$0		Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.	Go to site More Info	Compare	loading Fetching your data...
ScotPac Invoice Finance		$10,000	$150,000,000	From 1 year	No set amount		Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.	Go to site More Info	Compare	loading Fetching your data...
ScotPac Selective Invoice Finance		$10,000	$1,000,000	1 to 3 months	$500		Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.	Go to site More Info	Compare	loading Fetching your data...
Octet Invoice Finance		$100,000	$10,000,000	1 month to 2 years	No Set Amount		Convert up to 85% of your company's receivables into cash flow. The value of your receivables need to be worth at least $250,000 to be eligible.	Go to site More Info	Compare	loading Fetching your data...

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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 different restrictions. You will also be required to carry out a valuation on the property before the lender will approve your loan.

• 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.

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