What is a Secured Business Loan and How Can It Help Startups Without Financials?

Getting your startup off the ground isn't just about passion—it’s about having the right funding at the right time. But what happens when a new business doesn't have financials to prove its trading history? That’s where secured business loans come into play—and we’ve got a real example to show you exactly how it works.

In this post, we’ll explore:

• What a secured business loan is

• The benefits of using residential property as security

• How we helped a Brisbane-based startup secure funding—without needing financials

• What lenders look for (and how an accountant’s letter made all the difference)

• Why LVR, interest rates, and location matter

Let’s dive in.

What is a Secured Business Loan?

A secured business loan is a commercial loan backed by an asset—most commonly real estate. This asset reduces the lender’s risk, making it easier for businesses (even those without strong financials) to access funding.

In return, the borrower typically enjoys:

• Higher loan amounts

• Lower interest rates

• More flexible loan terms

Unlike unsecured loans, which rely heavily on your credit score and business performance, secured loans lean on the value of your asset. For startups and businesses in their early stages, this can be a game-changer.

Case Study: Helping a Brisbane Startup Get Funded Without Financials

Let’s take a closer look at a recent success story from one of our clients in Brisbane.

The Challenge

A Brisbane-based entrepreneur approached us with a promising new startup venture. The business had just launched and had no financials available to support a traditional loan application.

The hurdles:

• No trading history

• No BAS or profit and loss statements

• Urgent need for capital to secure equipment and pay suppliers

Traditional banks had already knocked them back. But where the banks saw risk, we saw opportunity.

The Solution

We structured a secured business loan for the client using their owner-occupied residential property as security. Here’s how the deal came together:

• Loan Amount: Based on 65% Loan-to-Value Ratio (LVR)

• Interest Rate: 9.25% p.a.

• Loan Term: 12 months (pre-paid interest )

• Security: First mortgage over their owner-occupied home in Brisbane

• Docs Required: No financials, just a signed accountant’s letter confirming the borrower’s ability to service the loan, council rates notice and ID.

This was a non-bank private lending solution, which meant faster approval times and flexible underwriting. From enquiry to settlement, the deal was done in just 7 business days.

Why LVR Matters in Secured Lending

In this case, we capped the LVR at 65%, which helped reduce the lender’s risk and keep the interest rate competitive. Lenders assess LVR (loan amount divided by the value of the property) to determine how much they’re willing to lend against a property.

• Lower LVR = Lower Risk

• Lower Risk = Better Pricing

Staying under 70% LVR is common for startup loans with limited documentation. It provides a safety buffer and gives the lender more confidence.

What is an Accountant’s Letter and Why Was It Enough?

One of the standout features of this deal was the minimal documentation required. Instead of years of financials, we only needed:

• A signed letter from the client’s accountant confirming:

  • The business was operating

  • The borrower could meet ongoing loan repayments

  • Funds were being used for genuine business purposes

This approach falls under the umbrella of low-doc or alternative documentation lending, which is common in the private lending market.

These types of loans suit:

• Startups

• Sole traders

• Property developers

• Business owners in cash-heavy industries

Why Use Owner-Occupied Property for Business Finance?

It might sound counterintuitive, but using your own home to fund your business can actually be a smart move—if you’ve weighed the risks.

Benefits:

• Unlock equity you already have

• No need to dilute equity by taking on investors

• Fast turnaround—private lenders don’t get bogged down in red tape

• Ideal for startups that can’t prove income yet

However, it's not for everyone. If the business fails, the property is at risk. That’s why it's crucial to work with a specialist commercial lending adviser who can guide you through the risks and rewards.

Why Brisbane Property Helped Seal the Deal

Location plays a big role in private lending decisions. In this case, the property used as security was a well-located owner-occupied house in inner Brisbane, which gave the lender extra comfort.

Lenders generally favour:

• Capital cities (Brisbane, Sydney, Melbourne)

• Suburban homes in established areas

• Clear title or low existing mortgage balances

Regional or high-density properties might attract higher rates or lower LVR caps.

Private Lending vs Bank Loans: A Quick Comparison

Feature	Private Lending	Bank Loans
Speed	Fast – often under 1 week	Slow – 4 to 6 weeks minimum
Docs Needed	Minimal – no financials required	Full financials, tax returns, BAS
Flexibility	High – terms tailored to borrower	Rigid – one-size-fits-all approach
Suitability	Startups, urgent capital needs	Established businesses only

For this client, time was of the essence. They couldn’t wait weeks for bank approval. By turning to private funding, we helped them act quickly and keep their business moving.

What Should Startups Know Before Using a Secured Loan?

If you're a startup founder considering a secured loan, here are a few key takeaways:

1. Understand Your Security: Know the value of your property and how much equity you can access.

2. Get a Reliable Accountant: A signed accountant’s letter can be the golden ticket.

3. Have a Clear Exit Strategy: Whether it’s refinancing, revenue growth, or asset sales—know how you’ll repay the loan.

4. Work With a Specialist: Non-bank lending is a different world. Make sure you’re working with someone who knows how to navigate it.

   
   

Final Thoughts

At Innovate Funding, we specialise in finding smart funding solutions for businesses that don’t fit the bank’s strict criteria. Whether you’re just starting out, scaling fast, or simply need quick access to capital, we tailor each loan to your unique situation.

This Brisbane startup is now trading, generating revenue, and preparing for a larger round of funding all because they took the leap with a secured business loan backed by their home.

Need help funding your startup? Reach out to our team today to explore what’s possible.