First mortgage business loans

A property with no loan on it, or one where the existing loan can be refinanced, offers a business the strongest kind of security: a first mortgage. Because the lender is first in line if the property is ever sold, first mortgage business loans usually unlock the most equity.

How does a first mortgage business loan work?

The new lender registers a mortgage in first position on the title. If there is an existing loan, it is paid out at settlement from the new funds, and the old mortgage is discharged. What is left after the payout goes to the business. If the property is unencumbered, the full approved amount is available for the business purpose.

First mortgage business loans run from $20k to $5m. No valuation is needed.

When is first position the right choice?

• The property is owned outright, perhaps an inherited home or a fully paid investment.
• The existing loan is small, and refinancing it is simpler than adding a second loan behind it.
• The business needs a larger sum than the equity above an existing loan would allow.
• You want one loan and one set of terms rather than two.

Quick sense check? Tell us the amount and the purpose. A person will call with an honest read, and your credit file stays exactly as it is.

First mortgage, second mortgage or top-up?

Option	What happens to the existing loan	Best when
New first mortgage	Paid out and replaced	Loan is small or terms are poor
Second mortgage	Left untouched	Existing loan has good terms you want to keep
Top-up with existing lender	Increased	The lender will lend for business purposes quickly

For a deeper look, see refinance vs top-up.

Flexible terms

Like other property-secured funding, first mortgage business loans can be set up with interest prepaid or added to the loan, which can mean no repayments at all while the loan runs. There is room in the term if things run late, and the loan can stay in place as long as you need. That suits businesses using the funds for a project that pays off later, such as a fit-out or an acquisition.

An illustrative example

A family-owned engineering business needs $600,000 to buy a competitor’s equipment and customer list. One of the directors owns an investment property outright, worth around $1.4m. A first mortgage over that property provides the funds, with interest prepaid for the first year while the acquired customers are integrated. The plan is to refinance to a longer-term loan once the combined business has a year of results.

Before you proceed

Check who owns the property and in what capacity, whether any trust deed restricts borrowing, and how the loan will be repaid. Our guide to using home equity for business covers the personal side of the decision.

The short version

• Secured by the first-ranking mortgage on the property
• Usually gives access to the most equity
• Can refinance an existing loan at the same time
• $20k to $5m, no valuation needed

How the process runs

One enquiry, one team, one clear answer. That is the whole approach. We read what you send, call you, ask for the documents that matter and lay out the options in plain English with the total cost attached. Your details are not shopped around, and your credit file is only checked if you choose to accept an offer. If the answer is no, you will hear it quickly and with a reason, so you can plan your next move.

Before you send the enquiry

A little preparation makes the first conversation far more useful, and it means the person who calls you can talk about options rather than chasing basic details:

• Your ABN and the legal name of the business.
• Online banking access, so recent statements can be shared through a secure read-only link.
• A rough figure for monthly turnover and the amount you need.
• A list of current loans and repayments, including any ATO payment plan.
• If property is involved, the address and roughly what is owed on it.

Help us match you first time

Late surprises are what slow funding down. A second property owner nobody mentioned, turnover that is lower in the statements than on the form, an amount that doubles after the first call: each one sends the assessment back to the start. If you tell us the full story at the beginning, even the awkward parts, the file only has to be worked through once.

Let’s see what fits

When you are ready, tell us what you need. Enquiring costs nothing and there is no credit check; a check only happens if you choose to go ahead with an offer. A real person reads every enquiry and calls you back, and we never auction your details to other lenders. One favour: fill in the form carefully. Honest figures for turnover, time trading and credit history let us match you properly the first time.