Second mortgage business loans
By Bhavi Chadha · Updated 25 October 2026
Use the equity in your home or commercial property for business funding, without refinancing your existing home loan. For business purposes only.
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- Borrow behind your existing mortgage
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In a nutshell
A second mortgage business loan is secured against property that already has a home loan or other first mortgage, using the equity left over. The new lender ranks behind your first lender, so you keep your existing loan. Most second mortgage business loans come from private lenders, usually for 3 to 24 months, with total borrowing across both mortgages often capped at about 65% to 80% of the property's value. They suit business owners who need funds quickly, need more than an unsecured lender will offer, or have credit or ATO issues, and they need a clear exit such as a sale or refinance.
At a glance
- Security
- Residential or commercial property
- Lender ranking
- Behind your existing first mortgage
- Combined LVR
- Often about 65% to 80%
- Typical term
- 3 to 24 months
- Decision time
- Days
- Interest rates
- Vary by lender and loan
How a second mortgage business loan works
A second mortgage lets you borrow against the equity in a property that already has a loan on it, usually your home or a commercial property you own. Instead of refinancing your existing home loan, a second lender registers a mortgage behind it.
- Work out your equity. The lender values the property and takes off what you owe on the first mortgage.
- The lender sets a combined limit. Many private lenders cap both mortgages together at about 65% to 80% of the property's value.
- The loan is registered. The second mortgage is registered on the title, behind your first lender. Some first lenders need to consent.
- You repay or refinance by the end of the term. Most second mortgage business loans run for 3 to 24 months, often with interest prepaid or interest-only repayments.
For business purposes only. Splendid arranges second mortgages for business needs, not personal ones such as renovations or holidays.
When a second mortgage makes sense for a business
- You need more than an unsecured lender will offer. Unsecured business loans are usually limited to a few hundred thousand dollars.
- You need funds within days, for example to stop ATO action, meet a supplier deadline or secure a business purchase.
- Your credit file, trading history or ATO debt rules out other lenders. Private lenders focus mainly on the property and the exit.
- You don't want to refinance your home loan, perhaps because it has a low rate or a fixed term with break costs.
The exit strategy matters most
Private second mortgage lenders want to know how the loan will be repaid before they lend. Common exits are the sale of a property or business asset, refinancing to a longer-term bank or non-bank loan once the business is back on track, or a known payment such as a large invoice, an R&D tax refund or a settlement. A loan without a realistic exit can become expensive quickly.
Costs and risks
Second mortgages cost more than bank loans, because the lender ranks behind your first lender. Rates vary widely, so we don't quote them here. Compare the total cost of each offer, including:
- establishment and broker or lender fees
- valuation and legal costs
- interest prepaid or capitalised from the loan
- extension or default fees if the exit takes longer than planned
Your property is security for the loan, so make sure the repayments and the exit are realistic before you proceed.
How we help
Your broker checks your equity and goals, then seeks multiple options from the private, non-bank and bank lenders on our panel. Sometimes a first mortgage refinance, an unsecured loan or a caveat loan is a better fit, and we'll tell you if it is.
Eligibility and documents
What lenders usually look for
- A business purpose for the loan (we don't arrange personal second mortgages)
- Equity in residential or commercial property, after allowing for the existing mortgage
- A clear exit, such as the sale of an asset, a refinance or a known payment
- Up-to-date repayments on the existing first mortgage, in most cases
- Consent from the first mortgage lender, where the lender or loan contract requires it
Documents you may need
- Identification for each borrower and guarantor
- Rates notice or title details for the security property
- A statement for the existing first mortgage
- Business bank statements, or an accountant's letter for low doc loans
- An explanation of the purpose and the exit strategy
Requirements vary by lender. All lending is subject to each lender's credit criteria and assessment.
What lenders publish about second mortgage loans
Here's a selection of what lenders publish about second mortgage and property-secured business loans. It isn't a full list of lenders or a ranking.
- Equity-One lends $50,000 to $10 million on first or second mortgages to commercial borrowers, over 1 month to 3 years with interest-only repayments, and says borrowers can repay early without break costs. Profile →
- Private Mortgages Australia offers short-term commercial loans of $250,000 to $5 million on first or second mortgages at up to 75% LVR, without relying on serviceability. Profile →
- Ventra Capital lends up to $2.5 million over 3 to 12 months, secured by a second mortgage or caveat, at up to 80% LVR with no valuation needed, and says it settles in 2 to 3 working days. Profile →
- Greenlink Capital offers residential, commercial and second mortgage lending for time-sensitive deals such as acquisitions, refinancing and bridging, across all states and territories. Profile →
- Fundspot offers business loans secured against equity in residential, commercial or industrial property, including caveat and second mortgage loans, and says it considers new businesses and bad credit. Profile →
- Moshav Financial offers private first and second mortgages, development and mezzanine funding, including for borrowers refused by mainstream banks. Profile →
- Strive Financial offers lines of credit of $25,000 to $2 million and term loans of $50,000 to $2 million to companies and trusts, secured by a mortgage. Profile →
A sample of lenders, as published by each lender, checked 25 October 2026.
First mortgage, second mortgage or caveat?
Where the lender ranks
- First mortgage
- First, or the only lender
- Second mortgage
- Behind the existing first mortgage
- Caveat
- No registered mortgage; a caveat on the title
Usually suits
- First mortgage
- Larger loans, or property with no existing loan
- Second mortgage
- Using equity without refinancing your home loan
- Caveat
- Urgent, smaller and shorter loans
Speed
- First mortgage
- Days to weeks, allowing for a valuation
- Second mortgage
- Days, sometimes with consent from the first lender
- Caveat
- Often the fastest; some lenders skip the valuation
Cost
- First mortgage
- Lowest of the three
- Second mortgage
- Higher, because the lender ranks second
- Caveat
- Usually the highest
| First mortgage | Second mortgage | Caveat | |
|---|---|---|---|
| Where the lender ranks | First, or the only lender | Behind the existing first mortgage | No registered mortgage; a caveat on the title |
| Usually suits | Larger loans, or property with no existing loan | Using equity without refinancing your home loan | Urgent, smaller and shorter loans |
| Speed | Days to weeks, allowing for a valuation | Days, sometimes with consent from the first lender | Often the fastest; some lenders skip the valuation |
| Cost | Lowest of the three | Higher, because the lender ranks second | Usually the highest |
Related guides
Talk to us about a second mortgage business loan
Tell us what you need and a little about your business. Your broker works out your cash flow and serviceability from your bank statements, then matches the product, amount, terms and lender to your business.
- Non-bank and private lending specialists, plus banks where they suit
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- We seek multiple lender options for you
- One conversation, no obligation
- Business finance from $30,000
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FAQs
Questions about second mortgage business loans
It's a business loan secured against property that already has a mortgage. The new lender registers a second mortgage behind your existing lender, so you can use the equity without refinancing your home loan.
Lenders look at the total of both mortgages against the property's value. Many private lenders cap the combined loan-to-value ratio at about 65% to 80%. For example, on an $800,000 property with a $400,000 home loan, a 70% cap allows total borrowing of $560,000, so a second mortgage of up to about $160,000.
Sometimes. Some home loan contracts require the first lender's consent before another mortgage is registered, and some second mortgage lenders ask for it. Where consent isn't needed, the second lender may notify the first lender. Your broker can check what applies.
Business purposes such as paying ATO debt, working capital, stock, buying a business or equipment, consolidating business debts, or bridging to a sale or refinance.
Most are short term, usually 3 to 24 months, with interest-only repayments or interest prepaid from the loan. You'll need a plan to repay or refinance by the end of the term.
No. A second mortgage is registered on the title. A caveat loan relies on a caveat lodged on the title instead of a registered mortgage. Caveat loans are often faster and more expensive. Our caveat loans guide explains the difference.
Often, yes. Private lenders focus mainly on the property and the exit, so past credit issues don't always rule you out. Expect a higher cost, and be ready to explain what happened.
Your property is at risk if you can't repay, and costs are higher than a bank loan. If the business can't refinance or sell as planned by the end of the term, you may face extension fees or enforcement. Make sure the exit is realistic before you borrow.
Not through Splendid. We only arrange finance for business purposes. If you need a second mortgage for a renovation, a holiday or personal debts, speak with a home loan broker.
No. There's no cost to you for our service. We're paid by the lender when your loan settles, and there's no obligation to proceed.
This page is general information only and isn't credit, tax or financial advice. Lender details are taken from each lender's published information, checked 25 October 2026, and can change. All lending is subject to each lender's credit criteria and assessment.