How to describe property as security when you call a lender

Why property changes the conversation

Property is one of the biggest levers in business lending. With it, a specialist can often look at larger amounts, longer terms, or situations where the business’s credit history or trading time would make unsecured lending hard. Without it, there are still good options, but they’re sized mostly on turnover and bank statements.

So when the specialist asks, “Do you own any property?”, they’re not fishing. They’re working out whether a whole second set of options is on the table. Property-secured business loans range from $20,000 to $5,000,000 and can be secured over residential or commercial property.

The five facts to give

1. Type of property. Your home, a commercial or industrial property, an investment property, vacant land.
2. Where it is. Suburb and state is enough for the first call.
3. Who’s on the title. You alone, you and a partner, a company, a family trust.
4. Rough value. An estimate from a recent sale nearby or an online estimate is fine.
5. What’s owing. The balance on any existing mortgage, and who with.

Then, just as important: how you feel about using it.

Scripts you can adapt

The straightforward version:

“I own our home in Ballarat with my wife. It’s probably worth around $750k and there’s about $380k left on the mortgage. We’d both be comfortable using it if it makes sense.”

Illustrative example only.

The “prefer not to” version:

“I do own a home, jointly with my partner, but I’d rather not use it unless there’s no other way. Can we look at options without it first?”

Illustrative example only.

The commercial version:

“The business operates from a warehouse we own through a company. It’s worth maybe $1.4m, and there’s a first mortgage of about $600k with our bank.”

Illustrative example only.

All three give the specialist what they need. The second one is especially useful: it tells us to lead with unsecured options, which is exactly what we’ll do.

First mortgage, second mortgage or caveat?

You don’t need to know which structure suits you before you call. That’s the specialist’s job. But it helps to know the terms if they come up:

Structure	In plain words	Often used when
First mortgage	The loan is registered first on the title	The property is unencumbered, or an existing loan is being refinanced
Second mortgage	Registered behind an existing first mortgage	There’s equity above the current mortgage and the first lender stays in place
Caveat loan	A caveat is lodged on the title to record the lender’s interest	Speed matters or the amount is smaller and shorter term

A caveat is a document someone with a legal interest in a property lodges with the land registry; in Victoria, Land Use Victoria describes it as a note on the title that alerts others a third party may have rights connected to the property.

Who has to agree

This is the part that most often catches people out. Every owner of the property must agree to it being used and sign the relevant documents. If the property is:

• jointly owned, both owners sign
• owned by a company, the directors authorise it
• owned by a trust, the trustee signs, and the trust deed may matter
• owned by a family member who isn’t in the business, they’d be giving security for someone else’s loan, which needs careful thought and independent advice

Mention the ownership on the first call. It shapes how the loan is structured and who needs to be available to sign.

Getting the numbers roughly right

Nobody expects a valuer’s figure on a phone call. But a figure that’s wildly off (a value from the last boom, or a mortgage balance from three years ago) can send the conversation in the wrong direction. Two minutes of checking helps:

• Mortgage balance: your lender’s app or latest statement.
• Value: recent sales on your street or in your suburb, or an online estimate, treated as a guide only.

If you go ahead, a formal valuation is ordered. Our page on what happens after the call explains where it fits.

When property security helps most

Owners often come to property security when:

• they need more than unsecured options would allow
• there’s ATO debt to clear in one go
• past credit problems make unsecured lenders cautious
• there’s a hard deadline and the business can’t wait

It’s also worth asking what happens if you plan to sell or refinance the property during the loan. Our list of questions to ask a lender covers that.

Common property questions on the first call

A few questions come up on almost every call about property security. It helps to have a view on them before you ring:

• “Is the property your home?” The family home is treated carefully. If you’re open to using it, say so; if you’d rather not, say that too.
• “Is anyone else living there?” Adult family members or tenants may need to be considered in how the loan is set up.
• “Are you planning to sell or refinance soon?” A sale can be a clean way to repay a short-term loan. Tell us if one is planned.
• “Is the existing mortgage up to date?” Arrears on a first mortgage affect second mortgage and caveat options.
• “Is the property in good condition?” Unusual properties, such as those needing major work, rural land, or properties with unapproved structures, may affect valuation.

None of these has a wrong answer. They just shape the options. If you’d like to see the whole list before you call, our page on what a specialist asks covers the business and credit side too.

Ready to talk about the property?

With the type, location, owners, rough value and balance in mind, ring 03 4059 1829. Or set it out in a 60-second enquiry and a specialist will call you. Enquiring won’t lead to a credit check, your property details aren’t shared with a line of lenders, and the specialist will respect how you feel about using your home. Accurate property figures, even rough ones, are what let us find the right fit the first time.