Can a Trust Get a Loan? Here's How to Secure Funds

You've set up a trust to manage your family's assets or perhaps to run a business, and now you're wondering whether that trust can secure a loan. It's a common scenario and one that involves navigating a few complexities. In Australia's dynamic lending market of 2026, understanding whether a trust can obtain a loan is crucial for making informed financial decisions. Let’s delve into the details to illuminate your path forward.

Understanding Trust Loans

In Australia, a trust can indeed secure a loan, but the process differs from obtaining a personal or a typical business loan. A trust is a legal entity that holds assets on behalf of its beneficiaries, and the trustee, who manages the trust, is the one who applies for the loan. The nature of the trust—whether it’s a family trust, unit trust, or a hybrid trust—can affect the loan application process and the lender's considerations.

The primary concern for lenders is the trust's ability to repay the loan, which depends on the trust's income, assets, and the financial standing of the guarantors, typically the trustees or beneficiaries. Understanding these foundational elements is the first step in securing a loan for your trust.

Trust Loan Rates, Requirements, and Options

Interest rates for trust loans in 2026 generally range from 6.49% to 12%, depending on the lender, the trust's financial health, and the type of loan. Different lenders have varied appetites for risk, meaning terms can vary significantly. Here’s a snapshot of current market offerings:

Lender	Interest Rate	Loan Type
Lender A	6.49% - 8%	Residential Property
Lender B	7% - 10%	Commercial Investment
Lender C	8.5% - 12%	Business Expansion

Eligibility criteria for a trust loan typically include:

• Detailed financial statements of the trust
• Evidence of a sustainable income stream
• Trust deed outlining the powers of the trustee
• Personal guarantees from trustees or beneficiaries

Trust loans can be used for various purposes, including purchasing property, refinancing existing debt, or funding business operations. The key is aligning the trust's financial strategy with the loan purpose.

How to Secure a Loan for Your Trust

Securing a loan for a trust involves several steps, and preparation is essential:

1. Assess the Trust's Financials: Compile comprehensive financial records, including balance sheets, income statements, and cash flow projections.
2. Review the Trust Deed: Ensure the trust deed allows for borrowing and that the trustee has the authority to apply for loans.
3. Identify Guarantors: Determine who among the trustees or beneficiaries will provide personal guarantees.
4. Consult with a Mortgage Broker: At Esteb and Co, our access to 83+ lenders allows us to find options tailored to your trust's needs.
5. Submit the Application: Present a compelling case to the lender, highlighting the trust's ability to repay and the loan's strategic fit.
6. Negotiate Terms: Be prepared to negotiate interest rates and loan terms to secure the best possible deal.

Expert Tips and Considerations

Here are some expert tips to enhance your trust loan application:

• Maintain Accurate Records: Keeping meticulous financial records can significantly improve your trust’s credibility with lenders.
• Understand Tax Implications: Consult with a tax advisor to understand how a loan will impact your trust’s tax obligations.
• Consider Loan Security: Offering additional security, such as property owned by the trust, can help negotiate better terms.
• Prepare for Rigorous Scrutiny: Lenders will scrutinise the trust's financial health and the guarantors' creditworthiness in detail.

Frequently Asked Questions

1. Can all types of trusts apply for loans?

Yes, but the process and requirements can vary. Family, unit, and hybrid trusts can all apply, though lenders may have specific preferences.

2. What happens if the trust defaults on a loan?

If a trust defaults, the lender may seek repayment from the guarantors or liquidate trust assets, depending on the loan agreement.

3. How long does the loan approval process take?

Approval times can vary widely but typically range from a few weeks to several months, depending on the complexity of the trust and loan.

4. Are interest rates for trust loans higher than personal loans?

They can be, as trust loans are often considered higher risk due to the complexity of trust structures and repayment assurances.

5. Can a trust refinance an existing loan?

Yes, trusts can refinance existing loans, potentially securing better rates or terms under favourable market conditions.

6. Do all lenders offer loans to trusts?

No, not all lenders offer loans to trusts. At Esteb and Co, our panel of 83+ lenders includes those willing to work with trusts.