Finance question
Can I get a business loan with a low deposit against property?
Often yes, because your property equity acts as the deposit. When real estate secures the loan, the equity you already hold does the job a cash deposit would, so many property-backed business facilities need little or no money down, subject to lender assessment.
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The short answer
Your equity stands in for the cash deposit
A deposit exists to give the lender a cushion of security. With a property-backed business loan, that cushion is already there in the form of your equity. The more of the property you own outright, the less the lender needs from you in cash, which is why low-deposit and even no-deposit structures are common when real estate is behind the deal.
This is a real advantage for owners who are asset-rich but cash-tight. You might have strong equity in a home or commercial premises but not want to drain working capital for a large upfront payment. The equity carries the loan, so the money stays in the business where it is doing work.
The trade is loan-to-value. A lender will lend a share of the property value and expect equity to cover the rest, so the amount you can borrow is set by how much room sits behind any existing mortgage. Where the equity is strong, the cash you need to put in can be minimal.
Do you qualify?
What lets equity replace the deposit.
Equity in property
The more you own outright, the less cash you need.
Room to lend against
Value above any existing loan sets your borrowing capacity.
A business purpose
Expansion, stock, equipment, working capital or a bill.
A serviceable structure
The lender needs comfort the facility can be repaid.
Why property means less money down
Security replaces cash
Equity does the job a deposit would, so you keep your cash.
Single-digit pricing
Real estate security is why the rate lands closer to a home loan.
Capital stays working
Money you would have parked as a deposit stays in the business.
A real example
A cafe owner wants $180k to fit out a second site but would rather not hand over a large cash deposit. She holds strong equity in her home, so the facility is secured against that equity with almost nothing down, and her cash stays free for stock and staff at opening. Illustrative only, subject to valuation.
Common questions
Frequently asked questions
Do I need any deposit at all?
Often very little or none. Your property equity acts as the deposit, so the cash you put in can be minimal where the equity is strong.
What sets how much I can borrow?
The value of the property and the equity behind any existing loan, rather than a fixed deposit percentage.
Can I keep my working capital in the business?
Yes, that is the point. Letting the equity carry the deal means you are not tying up cash as a deposit.
Does an existing mortgage stop this?
No. As long as there is equity behind the current loan, a low-deposit facility can often be arranged against it.