Using residential property as security for a business loan

Last updated 3 November 2026 · Reviewed by 360 MMS Compliance

How does a business loan secured by residential property work?

The loan is for your business, but the lender takes a mortgage over a residential property, such as your home or an investment property, as security. If the loan isn't repaid, the lender can take steps to recover the debt from the property. Because the property is the main security, the loan isn't tied to a particular business asset, which can help where a business needs funds for a purpose that equipment or vehicle finance doesn't cover.

Each application is assessed on its circumstances and lending criteria.

What can the loan be used for?

The loan must be for a genuine business purpose. Depending on the loan, that can include things like:

• working capital and cash flow for the business
• a fit-out of business premises
• expanding the business.

The business purpose is confirmed and documented before the loan goes ahead. These loans can't be used for personal or household needs.

What can't it be used for?

Some business purposes are excluded. For example, a business loan secured by residential property can't be used to:

• buy a business
• pay for goodwill
• fund a property development.

Other restrictions may apply depending on the loan. Your broker or our team can confirm what's allowed before you apply.

Can a company borrow against residential property?

Yes. Business-purpose loans to companies are available, secured by residential or commercial property. On some of our loans, the directors and shareholders of a borrowing company are co-borrowers on the loan. Company borrowers may pay a rate loading. Requirements vary by loan, and your broker can explain the conditions that apply to your structure.

If the property is owned by someone other than the borrower, such as a director who owns the home personally, that person may need to act as guarantor or give security. On some loans, independent legal advice is required before a guarantor signs.

What are the risks of using your home as security?

The main risk is that your home is on the line if the business can't keep up with repayments. Before you decide, think about:

• how the business will make the repayments if trading slows
• what would happen to your household if the property had to be sold
• whether everyone who owns the property understands what they're signing
• whether other security, such as the asset you're buying, could be used instead.

Your accountant can help you weigh up the business case, and a solicitor can explain your obligations under the loan documents.

How do I apply?

You can apply through your preferred mortgage broker or contact us directly. Our credit team can discuss a scenario before lodgement, so you know early whether a deal is likely to fit policy. Your broker will assess your income and financial situation, and every application is assessed on its circumstances and lending criteria.

Expect to provide identification for each borrower, director and guarantor, details of the property, information about the business and what the funds are for, and evidence of income or business performance.

What other options are there?

• Commercial property as security: if your business owns commercial property, it may be able to secure a business loan instead. Our commercial property loans guide explains the options.
• Equipment and vehicle finance: if you're buying an asset, the asset itself can usually act as security. 360 Asset Finance, part of the 360 group, can help.
• Unsecured business loans: 360 Asset Finance can also arrange unsecured business loans through its lender panel, subject to the lender's assessment.

FAQs

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. All loans are subject to lending criteria, and fees and charges apply. Kuone Pty Ltd T/As 360 MMS (ABN 81 621 683 672), Australian Credit Licence 504193.