Equity Release to Pay Off Business Debts

Why traditional lenders won't consolidate business debts

Banks look at your business financials first — tax returns, BAS statements, bank account history. If your business has been through a rough patch — missed supplier payments, overdue credit cards, or unpaid tax — the bank sees risk and declines.

What they don't do is separate the property (which might be worth $2 million and has real value) from the business troubles (which are temporary). A business loan application also requires you to prove your income is stable enough to repay. If your business is recovering, this becomes impossible.

This is where equity release is different. Instead of assessing your business ability, lenders assess your property.

How private lenders look at this differently

When you release equity, the lender's first question is simple: What is the property worth and how much equity is available?

If you own a property with good equity, you have something of real value to pledge as security. The business troubles become less relevant — the lender isn't betting on your business recovery, they're betting on the property itself.

You don't need strong business income. Asset-based lending means the property is the primary security, not your ability to repay from business cash flow.
You don't need perfect credit. Private lenders accept credit-impaired borrowers as long as the property value stacks up.
You can consolidate everything. In one transaction, you can pay off suppliers, ATO debt, credit cards, and any other liabilities, rolling them into a single loan secured against your property.

Got business debts and a property with equity?

Tell us what you're dealing with and we'll show you what's possible.

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What a typical deal looks like

Illustrative example — not a real case

Imagine a printing business owner who has built up debt over the past two years. They owe $80,000 to suppliers, $70,000 on credit cards for equipment, and $170,000 to the ATO. Combined, that's $320,000 in liabilities across different creditors. The bank won't refinance because the business is still recovering.

But the owner also owns a commercial property worth $2 million with a $700,000 mortgage still on it. That means they have $1.3 million in equity available.

A private lender agrees to release $400,000 of equity — at 55% loan-to-value. The funds clear all the debts ($320,000) plus costs, leaving some buffer. Now instead of juggling three creditors, the owner has one loan. The plan is to refinance to a bank once the business is trading cleanly again, which usually takes 12 to 24 months.

Typical deal structure

Asset type

Commercial property (business-owned)

Loan purpose

Consolidate business debts into one loan

Typical LVR range

Up to 80% commercial, 95% residential

Loan sizes

From $50K up to $80M

Interest rates

From 4.99% p.a., depending on the deal

Settlement speed

As fast as 24 hours for straightforward deals

Ranges shown are across our full panel of specialist lenders. Your deal may fall within a narrower range depending on the specifics.

What lenders want to see

To approve equity release for debt consolidation, lenders need clarity on three things:

Property valuation. A recent valuation or evidence of market value. The more equity, the stronger the deal.
Debt details. A clear list of what you owe — suppliers, credit cards, ATO, existing loans — and to whom. This helps the lender plan the settlement and payout structure.
Exit strategy. How will you repay this loan? The standard answer is refinancing to a bank once the business stabilizes and the old debts are cleared. Some lenders will also accept selling a property or asset as an exit.

When this might not work

Equity release isn't right for every situation. A deal like this might not stack up if:

The total amount you need to borrow is too high relative to the property value — the LVR exceeds what the lender is comfortable with.
There's no realistic exit. If the business shows no signs of recovery and there's no plan to refinance or repay the loan, lenders won't proceed.
The property itself is encumbered — for example, the ATO has placed a charge on it, or there are multiple mortgages with little room to add another loan.

What our panel can offer for this scenario

Our panel includes specialist lenders who actively fund equity release for business debt consolidation. Across these lenders:

Credit-impaired borrowers are accepted — your business troubles don't automatically disqualify you
Lo doc options available — lenders don't always need full profit and loss statements or tax returns
Settlement as fast as 24 hours for straightforward deals
Coverage across all Australian states and territories

The exact lender and terms depend on your property value and total debt. Describe your situation and our AI will match you with the most suitable lenders.

How to release equity to pay off business debts

The process is straightforward:

Step 1: Describe your situation. Tell us what property you own, what it's worth, what business debts you're carrying, and what you're trying to achieve. You don't need perfect information — just the basics.
Step 2: Get matched with lenders. Our AI checks your deal against specialist lenders on our panel and shows you which ones are likely to fund you, with plain-English explanations of their terms.
Step 3: Move forward. Review the options, pick the one that fits, and connect directly with the lender. Most can provide an indication within days.

Common questions

Can I use equity release to consolidate all my business debts at once?

Yes. If your property has enough equity, you can release a lump sum to pay off multiple debts — suppliers, credit cards, ATO, loans — and roll them all into a single loan secured against your property. This simplifies your repayments and often improves your cash flow.

Will equity release clear my ATO debt as well?

Equity release can provide the funds to clear ATO debt, but the ATO usually needs to be notified before settlement. Some lenders will pay the ATO directly as part of the loan settlement; others release the funds to you with the expectation you'll clear the debt yourself. It depends on the lender and the deal structure.

Can I release equity if I already have a mortgage on my business property?

Yes. If there's equity left after your existing mortgage, you can release it. For example, if your property is worth $2 million and your mortgage is $700,000, you have $1.3 million in equity available. A private lender might release a percentage of that equity depending on the LVR they're comfortable with.

How do I repay an equity release loan?

You make regular repayments — monthly, quarterly, or however the loan is structured — just like any other loan. Some people use the loan as a bridge while they improve their business cash flow, then refinance to a bank at a lower rate. Others refinance to a bank once their debts are cleared and credit improves.

Is equity release or a business loan better for paying business debts?

It depends. A business loan is unsecured, so rates are higher and you need to prove serviceability (ability to repay from income). Equity release is secured against your property, so rates are lower and income proof is often not required if you have good assets. If your business is struggling with income, equity release is often more achievable.