Business Loan Against House? Secure Funds Fast (2026)

So, you've got a brilliant business idea and a house that you own or are paying off. You’re wondering if you can leverage the equity in your home to secure a business loan. It's a common query, especially in today’s dynamic economic environment where entrepreneurs seek flexible financing solutions. Our team at Esteb and Co, with access to over 83 lenders, is here to help you navigate the path to funding your business while using your home as collateral.

Understanding Using Your House for a Business Loan

Leveraging your home for a business loan essentially means using the equity in your residential property as security to borrow funds. Equity is the difference between the current market value of your home and the outstanding balance on your mortgage. In Australia, this is a popular strategy among business owners who are asset-rich but cash-poor.

By using your home as collateral, you may access larger loan amounts and potentially lower interest rates compared to unsecured business loans. However, this also means that your home is at risk if your business cannot repay the loan.

Interest Rates, Requirements, and Options

As of 2026, interest rates for secured business loans in Australia typically range from 6.49% to 12%, varying based on the lender, your credit score, and the amount of equity available in your home. Here are some key factors and options to consider:

The eligibility criteria typically include:

• A minimum of 20% equity in your home
• A stable income to support repayments
• Good credit history
• Detailed business plan and financial projections

How to Secure a Business Loan Against Your Home

Securing a business loan against your home involves several steps. Here's a practical guide:

1. Assess Your Equity: Calculate your available equity by subtracting your remaining mortgage from the current market value of your home. An up-to-date property valuation may be required.
2. Prepare Your Business Plan: Draft a comprehensive business plan that includes your business goals, strategies, and financial projections. This will be crucial for convincing lenders of your business viability.
3. Check Your Credit Score: Ensure your credit score is in good shape. Pay off outstanding debts and correct any errors in your credit report.
4. Compare Lenders: Use our network at Esteb and Co to compare more than 83 lenders, assessing their rates and terms to find the best fit for your needs.
5. Submit Your Application: Once you've chosen a lender, submit your application along with the required documentation, including proof of income, business plan, and property valuation.
6. Review the Offer: Carefully review the loan offer, including interest rates, fees, and repayment terms, before accepting.

Tips and Considerations

Here are some expert tips to help you make an informed decision:

• Risk Management: Remember, your home is at risk if your business fails to repay the loan. Consider the worst-case scenario and ensure you have a solid repayment strategy.
• Consult Professionals: Engage with a financial advisor or mortgage broker from Esteb and Co to help navigate the complexities of securing a loan using your home equity.
• Mind the Market: Keep an eye on the property market. A downturn could affect your home’s value and your available equity.
• Diversify Funding: Consider combining this loan with other funding sources to spread risk.
• Regular Reviews: Regularly review your business’s financial health and adjust your strategies as necessary to ensure you meet your repayment obligations.

Frequently Asked Questions

• Can I use any type of property as collateral? Generally, lenders prefer residential properties, but some may accept commercial properties as well.
• What happens if I default on the loan? If you default, the lender has the right to sell your home to recover the loan amount. Hence, it’s crucial to have a robust repayment plan.
• Is it possible to refinance my home loan to secure a business loan? Yes, refinancing can be an option to access additional equity, often with better terms.
• Can I get a business loan if I have a mortgage? Yes, but your equity and current mortgage terms will affect the amount you can borrow.
• How long does the loan approval process take? Approval times vary by lender but can range from a few days to several weeks.
• Will using my home affect my personal finances? Yes, if you default, it could impact your personal credit score and financial stability.
• Are there alternatives to using my home as collateral? Yes, unsecured business loans, personal loans, and investor funding are alternatives but usually come with higher interest rates.