Is this the same as equity release for retirees?

No. Consumer equity release and reverse mortgages are regulated credit for individuals over their homes. This is a business-purpose loan to a company, trust or partnership, secured by investment or commercial property, with a defined term and exit.

Can I release equity without disturbing my bank loan?

Usually, with a second mortgage behind the bank. The bank has to consent, and the combined loan-to-value ratio has to sit within the second lender's limits. We run the consent process alongside credit so it does not hold up settlement.

How much equity can be released?

Typically up to around 75% of the lender’s valuation on a gross basis, less any existing mortgage. The figure moves with the asset type, its location and the strength of the exit.

Does the property have to be the business premises?

No. Any real property the entity owns can be security — an investment unit, a warehouse, a development site. The property and the purpose do not have to be related, as long as the purpose is business or investment.

Solutions

Equity release against commercial and investment property

If an entity owns property with equity in it, that equity can fund an acquisition, working capital, a tax liability or the next project without selling the asset. This is not consumer “reverse mortgage” equity release — it is a business-purpose first or second mortgage over property held by a company, trust or partnership.

Two ways to release equity

Add a second mortgage. Keep the existing first mortgage — usually a bank loan on terms worth preserving — and register a second behind it for the amount needed. Requires the first mortgagee's consent; runs in parallel with credit.
Refinance the whole position. A private first mortgage pays out the existing lender and releases the additional capital in one facility. Simpler where the bank will not consent, where the existing loan is maturing, or where the entity wants a single short-term facility with one exit.

The LVR arithmetic

Private lenders typically work to around 75% of value on a gross basis — for a second mortgage that is the first and second combined. A commercial unit valued at $3m with a $1.2m bank first has, on those numbers, roughly $1m of releasable equity before fees and capitalised interest. The valuation the lender relies on is theirs, not the entity's, and specialised assets (hospitality freeholds, childcare, rural) are assessed on a more conservative basis.

Purposes that work — and ones that don't

Acquiring another property, a business, or a partner's shareholding.
Working capital, stock, equipment or a contract mobilisation cost.
Clearing an ATO liability or a creditor that is holding up a bank refinance.
Equity for the deposit on the next development site.
Not personal, domestic or household spending, and not a loan to an individual over their home. Every borrower signs a Business Purpose Declaration confirming the use of funds.

What the lender needs

The property, its current encumbrances and a realistic value; the borrowing entity's details; the amount and purpose; and an exit — a refinance to a bank once the purpose is achieved, a sale, or trading cash flow over a defined term. Indicative terms are usually available typically within 24–48 hours; a clean file settles in 5–10 business days.

The products behind it

Second Mortgage Loans

Sit behind a major-bank or other priority lender. Raise capital without disturbing an existing first.

First Mortgage Loans

Registered first mortgage over residential investment, commercial, industrial, rural or mixed-use property.

Is this the same as equity release for retirees?: No. Consumer equity release and reverse mortgages are regulated credit for individuals over their homes. This is a business-purpose loan to a company, trust or partnership, secured by investment or commercial property, with a defined term and exit.
Can I release equity without disturbing my bank loan?: Usually, with a second mortgage behind the bank. The bank has to consent, and the combined loan-to-value ratio has to sit within the second lender's limits. We run the consent process alongside credit so it does not hold up settlement.
How much equity can be released?: Typically up to around 75% of the lender’s valuation on a gross basis, less any existing mortgage. The figure moves with the asset type, its location and the strength of the exit.
Does the property have to be the business premises?: No. Any real property the entity owns can be security — an investment unit, a warehouse, a development site. The property and the purpose do not have to be related, as long as the purpose is business or investment.

Related reading

Important — Business Purpose Lending Only

IMPORTANT — BUSINESS PURPOSE LENDING ONLY. Andorra Capital Solutions Pty Ltd (ACN 675 464 623 / ABN 32 675 464 623) is a commercial finance broker and introducer. We arrange property-secured business-purpose loans between Australian corporate borrowers and a panel of non-bank lenders and private investors. We do not provide credit ourselves. We do not arrange consumer credit and we do not arrange credit regulated by the National Consumer Credit Protection Act 2009 (Cth) (NCCP Act) or the National Credit Code. We are not an Australian Credit Licensee. Every loan arranged through us is either to a borrower that is not a natural person (outside the National Credit Code under section 5(1)) or for purposes that are wholly or predominantly business or investment purposes (outside under section 6(1)), or both. All borrowers are required to execute a Business Purpose Declaration and to evidence the true business purpose of the funds. No part of any loan arranged through us may be applied for personal, domestic or household purposes. If a borrower applies any part of the funds for a purpose to which the NCCP Act would apply, the borrower does so in breach of the loan agreement and indemnifies the lender against any resulting loss, claim or cost. The information on this website is general in nature, does not constitute financial, legal or taxation advice, and does not take into account your objectives, financial situation or needs. No interest rates, fees or other commercial terms are advertised on this website; pricing is determined by the relevant panel lender or private investor and is disclosed to the borrower as part of indicative terms. All loans are subject to credit assessment, satisfactory security, valuation, and execution of formal loan documentation by the relevant lender. For consumer credit (regulated under the NCCP Act), contact a licensed credit provider.

Equity sitting idle in a property the business owns?

Enquire about equity release or call 0480 521 605