Second mortgage business loans

Many business owners have years of equity sitting in their home or an investment property, often alongside a home loan with good terms they do not want to disturb. A second mortgage lets you use that equity for the business while leaving the first loan exactly as it is.

How does a second mortgage work?

Your existing lender holds the first mortgage. The second mortgage lender registers its mortgage behind that one. The two loans run side by side. On a sale, the first lender is paid in full and the second lender is paid from whatever remains. Because the second lender is further back in the queue, it looks carefully at how much equity sits above the first loan.

Business second mortgages are available from $20k up to $5m. No valuation is needed.

When does a second mortgage make sense?

• You have a home loan with a rate or features you want to keep.
• The business needs a sizeable amount quickly, and refinancing everything would take too long.
• The need is for a defined period, such as clearing a tax debt while trading recovers.
• Your credit file or financials would make an unsecured loan difficult.

Not sure this fits your business? That is exactly what the quick enquiry is for. One team reads it, no credit check runs, and nothing is sold on.

Second mortgage or caveat loan?

Both sit behind an existing first mortgage. A caveat loan protects the lender’s interest by lodging a caveat on the title, which can be very quick to put in place, and suits shorter needs. A second mortgage is registered, which some borrowers and lenders prefer for longer terms. A caveat can later be converted into a registered second mortgage. Our caveat vs second mortgage comparison sets them side by side.

Repayment options

Option	How it works	Suits
Interest prepaid	Interest for the term paid up front from the loan	Businesses that want no repayments during the term
Interest added	Interest accrues and is added to the balance	Owners waiting on a sale or refinance
Regular repayments	Interest, or interest and principal, paid monthly	Steady trading businesses

Working out your equity

Take your estimate of what the property is worth, apply a lending ratio, and subtract what is owed on the first mortgage. What remains is the equity a second lender may be able to use. The property equity calculator does the arithmetic for you.

Things to check first

• Whether your first mortgage requires consent for a second mortgage.
• Who is on the title, because every owner will need to sign.
• How the second mortgage will be repaid, and what happens if that takes longer than planned. The term can stretch if your sale or refinance runs late, so you are not forced into a rushed exit, but a clear exit keeps costs down.

Read more in what to know about second mortgages for business.

Key takeaways

• Borrow against equity without touching your existing home loan
• Registered on the title behind the first mortgage
• $20k to $5m, no valuation needed
• Interest can be paid up front or capitalised to the loan

What happens when you enquire

The process is built to avoid wasted time. The enquiry asks only what matters. The first call gathers what is missing. Statements are shared securely online, documents are signed electronically and any property security is prepared in parallel. Straightforward files can be approved within the hour, and funds can land within 24 hours once everything is signed. More complex files take a little longer, and you will be told why. Where a step is waiting on someone else, such as a co-owner’s signature, we will tell you so it can be chased.

Before you send the enquiry

You do not need a folder of financial statements to start an enquiry. For most unsecured and property-secured funding, these few items cover the essentials:

• Photo ID for each director or owner.
• Access to your business bank account for a secure statement link.
• Your latest BAS, if it is handy.
• Details of existing finance, including any daily or weekly repayments.
• For property-secured funding, the property address and current loan balance.

About the questions we ask

Every question on the form is there for a reason: it changes which funding fits. Describe the business as it stands today rather than the version you expect in six months. Mention any default, tax debt or recent decline in the notes. We look at those situations all the time, and knowing early lets us head straight for options that can actually work.

See what you could qualify for

Have a figure in mind? Put it in the enquiry. There is no credit check for asking, you will not be passed around a panel of lenders and you will speak to someone who has read your answers. Take a moment to get those answers right. Accurate details about revenue, time trading and credit mean we can match you properly first time, without the back and forth.