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Secured Business Loans in Australia
Secured business loans in Australia are a form of private lending used by businesses to access capital by securing finance against property or other acceptable assets.
Private secured business loans are commonly used when traditional banks cannot provide funding due to time constraints, complex financials, or non-standard borrower structures. These facilities are assessed primarily on asset quality and exit strategy rather than historical financial performance alone.
This page explains how secured business loans work, when they are used, how private lenders assess risk, and how these facilities are structured.
What Is a Secured Business Loan?
A secured business loan is a loan provided to a business where the lender takes security over an asset, most commonly real property.
In private lending, secured business loans are typically:
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Secured against residential, commercial, or industrial property
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Structured for business or investment purposes
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Short to medium term in nature
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Assessed primarily on security strength and exit certainty
Unlike unsecured lending, the presence of tangible security allows private lenders to offer higher loan amounts and faster approvals.
When Are Secured Business Loans Used?
Secured business loans are used when businesses require capital and cannot rely solely on traditional bank funding.
Common scenarios include:
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Working capital to support cashflow or growth
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Funding business acquisitions or buyouts
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Consolidating business-related liabilities
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Managing short-term liquidity constraints
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Supporting time-sensitive commercial opportunities
These loans are often used as interim solutions pending refinance or longer-term restructuring.
How Private Lenders Assess Secured Business Loan Risk
Private lenders assess secured business loans differently to unsecured facilities due to the presence of collateral.
Key considerations include:
Security Quality
Lenders focus on:
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Property type and location
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Market depth and resale liquidity
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Valuation quality and conservatism
The asset securing the loan underpins the entire transaction.
Loan-to-Value Ratio (LVR)
Secured business loans are assessed on conservative LVR limits to protect against market movement. Where a secured business loan sits behind an existing facility, it may involve a second mortgage loan, which requires additional equity buffers due to subordinate ranking.
Exit Strategy
A clear exit strategy is essential.
Acceptable exits commonly include:
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Refinance into a long-term business or investment facility
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Sale of the secured asset
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Cash injection from a verifiable source
For a broader explanation of how private lenders evaluate exit strategies, see Private Lending in Australia.
LVR and Security Considerations for Secured Business Loans
Secured business loans rely heavily on valuation accuracy and asset quality.
Private lenders typically require:
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Independent valuations
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Conservative assumptions around market value
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Clear equity buffers above peak debt
A first mortgage private loan may allow higher leverage depending on asset quality. Secured business loans involving complex structures or subordinate security are assessed more conservatively.
Exit Strategy Requirements
Every secured business loan must be structured with a defined and realistic exit.
Private lenders assess:
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The certainty and timing of refinance
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The marketability of the secured asset
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The borrower’s capacity to execute the exit
Secured business loans are commonly declined where exit strategies rely on assumptions rather than evidence.
Loan Amounts, Terms & Interest Rates
We offer secured business loans from $50,000 to $20 million with loan terms ranging from 1 to 12 months. Interest rates typically start from:
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First mortgages: from 8.75%
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Second mortgages: from 13%
Loan rates depend on the loan amount, term length, and loan-to-value ratio (LVR). Our team will work with you to structure a loan that matches your business goals. It is important to note that secured business loan interest rates vary between, Sydney, Melbourne and Brisbane. Feel free to contact the team and run the scenario by us to get the best rates.
Low Doc VS No Doc Business Loans
Both low doc and no doc loans are designed for borrowers who don’t meet traditional bank criteria. Here’s how they compare:
Feature | Low Doc Loans | No Doc Loans |
|---|---|---|
Approval Times | Up to week | Same Day |
Flexibility | Less | More |
Ideal For | Self employed | Businesses with no BAS or tax docs |
Interest Rate Expectations | 8-15% | 8.75-24% |
Typical Documents | Financials, Bank Statements, CV, BAS | Valuation, Council Rate, Title Search |
Innovate Funding offers both loan types, depending on your needs. If you're unsure which is best, our team will guide you.
How Our Process Works
1
Loan Assessment
2
We review your scenario and the asset you’re offering
Proposal Issued
3
You receive a customised loan proposal
Minimal Docs Submitted
4
Usually just ID, property info & rates notice
Fast Approval & Funding
5
You can receive funds within 24–48 hours
Common Reasons Secured Business Loan Applications Are Declined
Applications may be declined for several reasons, including:
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Insufficient equity in the secured asset
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Over-reliance on inflated valuations
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No clear or documented exit strategy
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Inappropriate security for the loan size
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Consumer-purpose use incorrectly presented as business-purpose
These issues are structural and can often be addressed through improved structuring.
How Secured Business Loans Are Structured
Private secured business loans are typically structured as:
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Short to medium-term facilities, commonly between 6 and 36 months
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Interest-only or capitalised interest arrangements
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First or second mortgage security
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Clearly documented repayment timelines
Pricing reflects security quality, transaction complexity, funding speed, and loan duration. These loans are designed to provide flexibility where banks cannot.
How Innovate Funding Structures Secured Business Loans
Innovate Funding structures secured business loans by focusing on asset strength and exit clarity.
This includes:
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Reviewing security and valuation fundamentals
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Assessing LVR and peak debt exposure
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Structuring facilities aligned with business objectives
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Matching transactions with suitable private lenders
Each secured business loan is assessed individually to ensure it is viable, executable, and aligned with the borrower’s exit strategy.
Secured Business Loans – Frequently Asked Questions
What assets can be used as security for a business loan?
Real property is the most common form of security, including residential, commercial, and industrial assets.
How quickly can secured business loans settle?
Once valuation and documentation are complete, settlement can occur within days.
Are secured business loans available for businesses with poor financials?
Yes. Private lenders focus primarily on security and exit strategy rather than historical financial performance.
Can secured business loans be refinanced later?
Yes. These loans are often structured as interim facilities pending refinance or sale.
Are secured business loans more expensive than bank loans?
They typically carry higher costs due to speed, flexibility, and risk profile, but provide access to capital where banks cannot assist.
Understanding Your Options
Secured business loans play a key role within Australia’s private lending market by enabling businesses to access capital using asset-backed structures. When structured correctly, secured business finance provides flexibility and speed while maintaining a clear pathway to exit. For a broader understanding of how secured business loans fit within private finance, visit Private Lending in Australia.