Quick answer
A first mortgage business loan is secured by a property that has no other loan on it, or where the new loan pays the existing one out. Being in first position gives the lender the strongest security, which means larger amounts and faster decisions. Loans run from $20k to $5 million, with no valuation needed and funds possible in as little as 24 hours.
Key points
- For unencumbered property, or to pay out an existing mortgage.
- Residential, commercial or industrial property.
- The strongest security, so the largest amounts.
- A short-term loan with a clear exit: a bank refinance or a sale.
- Loan amounts
- $20k to $5 million
- Security
- First mortgage over property
- Funding
- In as little as 24 hours
- Valuation
- Not needed
If you own a property outright, or close to it, you’re sitting on one of the most powerful tools in business finance. A private first mortgage turns that property into fast, sizeable funding for your business, without waiting weeks for a bank.
Who uses a private first mortgage
- Owners with debt-free property. A paid-off home, an investment unit, a factory or a block of land.
- Owners whose bank is too slow. A deal needs funding this week and the bank is talking about next month.
- Owners a bank has declined. Recent losses, a tax debt, a new venture or a credit issue the bank won’t look past.
- Owners who want to pay out their current mortgage and release extra cash in the same transaction.
How it works
- Send a 60-second enquiry. No credit check to enquire.
- Talk to a lending manager. You’ll usually get a call within 30 minutes in business hours, with an indicative answer.
- Conditional approval. Photo ID, the rates notice and, if there’s an existing loan, the latest mortgage statement. The approval sets out every cost up front.
- Searches and loan agreements. Due diligence is done, then the agreements are issued for signing.
- Settlement. Funds can be in your account in as little as 24 hours.
No formal valuation is needed before approval.
Larger amounts, because the security is stronger
In first position, the lender’s security is as strong as it gets. That’s why first mortgage business loans can go as high as $5 million, and why the decision can be made so quickly.
Short term, with a plan to get out
A private first mortgage is a short-term loan. The best ones have a clear exit from day one, such as:
- Refinancing to a bank once your tax returns are lodged and the business is back on track
- Selling the property, or another property, on a timeline that suits you rather than a fire sale
- A contract or large debtor paying out
If your exit takes longer than planned, you can extend without penalties. If it comes early, you can repay early at any time.
Cash flow relief from day one
You can have up to the first 6 months with no repayments, with the interest added to the loan. That keeps every dollar in the business while you complete the project, clear the debt or get the refinance done.
Ready to start?
Find the property’s latest rates notice tonight, take a photo of your licence and write down what you need and how it gets repaid. Then send your enquiry.
Private first mortgage or bank loan?
A bank will usually offer a lower long-term cost, but only if you fit its policy and can wait. A private first mortgage is the right tool when timing, flexibility or a recent setback matters more than the lowest possible price. Many owners use both: a private first mortgage now to secure the deal or clear the problem, then a bank refinance once the business’s financials support it.
| Bank first mortgage | Private first mortgage | |
|---|---|---|
| Speed | Weeks | Funds in as little as 24 hours |
| Valuation | Usually required | Not needed before approval |
| Credit issues and ATO debt | Often a deal breaker | Considered case by case |
| Repayments | From the first month | None for up to 6 months |
| Term | Long term | Short term, extendable without penalties |
Examples of how owners use them
- A manufacturer with a debt-free factory raises $1.2m to buy out a retiring partner, then refinances to a bank a year later.
- A family who own their home outright clear a $240k ATO debt and stop enforcement action, while the accountant catches up on lodgements.
- A retailer pays out an expensive existing mortgage and releases funds for stock ahead of Christmas.
What happens to my existing mortgage?
If there’s a loan on the property, the private first mortgage pays it out at settlement. The old lender is paid directly, its mortgage is removed, and any extra funds go to your business account.
Owned through a company, trust or SMSF?
Property owned by a company or a family trust can usually be used, with the directors or trustees signing the documents. Property owned by a self-managed super fund generally can’t be offered as security for a business loan, so if your property sits in super, mention it on the first call and your lending manager will talk through the alternatives.
What it costs
Every loan is priced on its own circumstances, including the property, the amount, the term and the purpose. The conditional approval sets out every cost in full before you commit, so there are no surprises at settlement. If you decide not to go ahead after seeing the approval, there’s no obligation.
Frequently asked questions
When would I use a private first mortgage instead of a bank?
When you need the money faster than a bank can move, when a bank has declined you, or when your financials aren't ready for a bank yet. A private first mortgage gets you funded now, and you can refinance to a bank later.
Can a private first mortgage pay out my existing bank loan?
Yes. The new loan can pay out your current mortgage and release extra funds for your business in the same settlement.
Can I use commercial property?
Yes. Factories, warehouses, shops, offices and other commercial property can all be used, as well as residential property.
What if the property is owned by my company or trust?
That's common and not a problem. The directors or trustees sign the loan documents.