Business Debt Consolidation Loans in Australia: Using Property to Consolidate Business and ATO Debt
How much you can borrow from a private lender depends primarily on the property offered as security, existing debt, loan-to-value ratio (LVR), loan purpose and exit strategy.
For eligible Australian business owners, investors and property professionals, private lending may provide short-term finance secured by residential or commercial property. The loan amount is not based only on a borrower’s income or credit score, and it is not simply the difference between the property value and the existing mortgage balance.
A private lender assesses the complete transaction: the property, total debt after settlement, whether the loan is a first or second mortgage, the use of funds and the realistic plan for repaying the loan.
At Assurity Capital, private first mortgages and second mortgages are considered for genuine business and investment purposes only. Finance is not available for consumer or owner-occupied personal lending.
What determines how much I can borrow from a private lender?
The main factors are:
Property value.
Existing mortgage balance and payout figure.
LVR or combined LVR.
Whether the loan is first or second mortgage security.
Property type, location and marketability.
Loan purpose.
Loan term.
Borrower and transaction circumstances.
Exit strategy.
A private lender will usually need an up-to-date view of the property’s value and all existing debt secured against it before determining whether a proposed loan amount is suitable.
What is LVR in private lending?
LVR means loan-to-value ratio. It compares the amount borrowed with the lender’s accepted property value.
The formula is:
Loan amount ÷ property value × 100 = LVR
For example:
Property value: $2,000,000
Proposed private first mortgage: $1,100,000
$1,100,000 ÷ $2,000,000 × 100 = 55%
The proposed LVR is 55%.
A lower LVR generally provides a greater equity buffer between the property value and total debt. However, a lower LVR does not guarantee approval. The lender must still be satisfied with the property, loan purpose and exit strategy.
How much can I borrow with a first mortgage?
A private first mortgage is the primary mortgage secured over a property. The first mortgage lender has priority if the property is sold or enforcement action occurs.
How much may be available through a first mortgage depends on:
The lender’s accepted property value.
The property type and location.
The loan purpose.
Whether the property is vacant, tenanted, specialised or under development.
Any existing debt that must be refinanced.
The proposed exit strategy.
For example, if a property is worth $3,000,000 and the lender is comfortable with a total first-mortgage LVR of 60%, the maximum total first mortgage under that example would be $1,800,000.
This is a calculation example only, not an offer, loan limit or approval indication.
How much can I borrow with a second mortgage?
A second mortgage is an additional loan secured behind an existing first mortgage.
The key calculation is the combined LVR, also called CLVR. This includes both the first mortgage and the proposed second mortgage.
For example:
Property value: $2,000,000
Existing first mortgage: $850,000
Proposed second mortgage: $250,000
Total debt after settlement: $1,100,000
$1,100,000 ÷ $2,000,000 × 100 = 55%
The combined LVR is 55%.
A second mortgage lender is repaid after the first mortgage lender. Because the second lender takes greater risk, second mortgage finance may have different costs, terms and combined LVR requirements than a first mortgage.
Is available equity the same as the amount I can borrow?
No.
Gross equity is the difference between a property’s estimated value and the existing mortgage balance. But available equity for lending purposes is often lower.
For example:
Property value: $1,500,000
Existing mortgage: $600,000
Gross equity: $900,000
That does not mean a borrower can automatically access $900,000.
A lender will apply its own LVR criteria, assess the property and consider the total debt after settlement. The loan may also need to cover interest, lender fees, legal costs, valuation costs and other transaction expenses.
The more useful question is: What total level of debt can the lender accept against this property, for this purpose and with this exit strategy?
Can I borrow against residential property for business funding?
Potentially.
Residential property may be used as security for an eligible business or investment-purpose loan. The property can be owned by the borrower, a business, a guarantor or a related party, subject to legal and lender requirements.
Eligible uses may include:
Business working capital.
ATO debt or business debt consolidation.
Urgent settlement funding.
Commercial or investment property opportunities.
Development-related costs.
Renovation or construction completion.
Purchase of stock, equipment or a business asset.
Refinancing an existing short-term facility.
Bridging finance before a sale or refinance.
Assurity Capital does not provide consumer or personal loans. The proposed facility must have a genuine business or investment purpose.
Can I borrow against commercial property?
Potentially.
Commercial property may be used as security for private finance, subject to the property type, location, marketability, tenancy, lease position, existing debt and loan purpose.
Property types may include:
Office property.
Retail premises.
Warehouses and industrial facilities.
Medical suites.
Commercial strata units.
Mixed-use property.
Development sites.
Other specialised property, subject to assessment.
Commercial-property finance may be used to purchase, refinance or access equity in an eligible business or investment scenario.
Do private lenders assess income and credit history?
They may.
Private lenders may take a more security-focused approach than mainstream banks, particularly for short-term property-backed business finance. However, income, credit history, repayment conduct and borrower circumstances can still be relevant.
A poor credit history does not automatically rule out an assessment, but it does not remove the need for:
Suitable property security.
An acceptable LVR or combined LVR.
A clear business or investment purpose.
A realistic exit strategy.
Honest disclosure of existing debt and credit issues.
What is an exit strategy, and why does it affect borrowing capacity?
An exit strategy explains how the private loan will be repaid at the end of its term.
Common exits include:
Refinance into a bank or non-bank facility.
Sale of the secured property.
Sale of another asset.
Completion and sale of a property development.
Completion of a renovation followed by refinance or sale.
Funds from a verified business transaction, asset sale or capital event.
A strong, evidence-based exit strategy may improve the overall strength of a scenario. A weak or uncertain exit can reduce lender appetite, even where a property appears to have substantial equity.
Can I borrow more by adding another property as security?
Potentially.
Additional acceptable security may improve the total security position and provide a larger equity buffer. However, the lender will assess each property, all existing debt, ownership structures, loan purpose and exit strategy.
Offering another property also increases the assets exposed to the loan. Borrowers should understand the legal and financial implications before proceeding.
What costs affect the amount I need to borrow?
The loan amount may need to cover more than the cash required by the borrower.
Depending on the transaction, costs can include:
Payout of an existing mortgage or private loan.
Accrued interest.
Establishment fees.
Legal costs.
Valuation costs.
Discharge fees.
Interest that is capitalised into the loan.
Other transaction costs.
For a refinance, the lender needs the full payout figure—not just the original loan balance—to assess the required amount and total debt after settlement.
How can I improve my private lending scenario?
A borrower can assist an early assessment by providing:
Property address and ownership details.
Estimated value or recent valuation.
Existing mortgage statement and payout figure.
Details of all caveats, charges or other secured debt.
Proposed loan amount.
Exact purpose of funds.
Required settlement date.
Evidence for the exit strategy.
Relevant company, trust, SMSF or guarantor documents.
Clear information allows the lender to assess the actual structure rather than rely on assumptions.
How much can I borrow from Assurity Capital?
Assurity Capital assesses each private lending scenario individually.
The amount potentially available depends on the property security, existing debt, LVR or combined LVR, loan purpose, transaction complexity and exit strategy. We consider private first mortgages, second mortgages, bridging finance, debt consolidation and short-term business funding across Sydney, NSW and Australia for eligible business and investment purposes.
Finance is subject to assessment, suitable security, eligibility, lender criteria, fees, approval and a realistic exit strategy.
Apply with Assurity Capital Today!
How much can I borrow from a private lender in Australia?
The amount depends on the property value, existing debt, LVR or combined LVR, security type, loan purpose and exit strategy. There is no single amount that applies to every borrower or property.
How much equity do I need for a private loan?
There is no fixed equity amount. A lender assesses the total debt after settlement against its accepted property value and considers the overall transaction.
Can I get a second mortgage without refinancing my first mortgage?
Potentially. A second mortgage may allow eligible borrowers to access equity without replacing their first mortgage, provided the existing security position, combined LVR and lender criteria are suitable.
Can I borrow against an investment property for business purposes?
Potentially. An investment property may be used as security for an eligible business or investment-purpose loan, subject to assessment.
Can I borrow more if my property value has increased?
Potentially. A higher accepted property value may improve the available equity position, but the lender will still assess existing debt, LVR, loan purpose and exit strategy.
Does Assurity Capital provide consumer home loans?
No. Assurity Capital considers private property-backed finance for eligible business and investment purposes only.
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