Secured Business Term Loans Australia 2026
Leverage property and high-value assets for larger borrowing at lower rates. From 7.49% p.a. — facilities up to $5M+. Compare 40+ Australian lenders.
TL;DR — Secured Term Loans
- Pledge property or high-value assets as collateral to unlock lower rates, larger limits, and longer terms.
- Secured business term loans start from 7.49% p.a. (May 2026), with facilities from $10,000 to $5M+.
- Terms can stretch up to 15–25 years on property-backed facilities.
- Lenders typically advance 60–80% of the asset's value (LVR).
- If you want a broader view including unsecured options, see business term loans.
Secured Term Loans — Leverage Your Assets for Larger Borrowing at Lower Rates
If your business owns property, substantial equipment, or other high-value assets, you're holding something most borrowers aren't: negotiating power. A secured term loan lets you put that equity to work — unlocking larger facilities, sharper rates, and longer terms than most unsecured products can offer. LoanGorilla compares secured business loans from 40+ lenders to find the structure that fits your assets and your ambitions.
Check your secured term loan options with LoanGorilla — free comparison, no credit score impact, takes 2 minutes.
Compare NowRate snapshot (May 2026): Secured business term loans from 7.49% p.a. Facilities from $10,000 to $5M+, depending on asset value and equity. Rates vary by lender, collateral quality, and borrower profile.
Secured vs Unsecured at a Glance
| Feature | Secured Term Loan | Unsecured Term Loan |
|---|---|---|
| Rate from | 7.49% p.a. | 12.85% p.a. |
| Borrowing range | $10,000 – $5M+ | $5,000 – $500,000 |
| Term | Up to 15–25 years (property) | 3 months – 5 years |
| Approval speed | 1–4 weeks | 24–72 hours |
| Collateral required | Yes | No (director guarantee common) |
Indicative rates as of May 2026. Rates vary by lender, collateral quality, LVR, and borrower profile.
What Is a Secured Term Loan?
A secured term loan is a business lending structure where you borrow a lump sum and pledge an asset — most commonly commercial or residential property, but also equipment, vehicles, or other high-value collateral — as security against the loan. If you default, the lender has the legal right to take possession of the secured asset and sell it to recover the outstanding debt.
That risk transfer from lender to borrower is precisely why secured term loans unlock better economics: lower interest rates, higher borrowing limits, and longer repayment terms than you'd access on an unsecured basis.
The key distinction: This page is about secured term loans in the specific sense — where security is the primary mechanism enabling the loan structure. It's not about a general business term loan where a director's guarantee is the only recourse. If you want to understand the full spectrum of term loan products (including unsecured options), business term loans is the broader overview.
How Secured Term Loans Work
Identify the loan purpose and amount
Acquisition, expansion, major equipment purchase, debt consolidation, or working capital for a large project.
Nominate collateral
The asset(s) you're prepared to secure against the loan. Property is preferred by most lenders for its liquidity and stability of value.
Valuation and due diligence
The lender arranges an independent valuation of the security. For property, this means a formal valuation report; for equipment, a market value assessment.
Loan-to-Value Ratio (LVR)
Lenders typically advance up to 60–80% of the asset's value depending on type. Commercial property often sits at 65–70% LVR; residential at 70–80%.
Security registration
The lender registers their interest on the PPSR or via a mortgage over property. This is what creates the legal security.
Drawdown
Funds are released and the repayment schedule begins.
Discharge
Once the loan is fully repaid, the lender releases the security interest.
What Assets Work as Collateral?
The type and quality of your collateral drives everything — the rate you're offered, how much you can borrow, and which lenders will touch your deal. Property is the gold standard, but other assets can also work.
Commercial property
Offices, warehouses, retail, industrial — typically 60–70% LVR.
Residential property
Owner-occupied or investment — typically 70–80% LVR.
Equipment & machinery
Plant, earthmoving, specialised machinery — 40–60% LVR.
Vehicles & fleet
Commercial vehicles, trucks, fleets — 50–70% LVR.
Receivables & inventory
Accepted by some specialist lenders at lower LVRs.
Rural / agricultural property
50–65% LVR depending on location and productivity.
Important note on the family home: LoanGorilla strongly recommends prioritising commercial or investment property as security before your family home. Business loans fail — and losing your family home to a failed commercial venture is a risk that deserves careful thought before you proceed.
When a Secured Term Loan Makes Sense
Secured term loans are the right tool for capital-intensive moves where you need significant scale (typically $300,000+), longer terms (5–15+ years), the lowest available rate, or to consolidate multiple high-cost facilities into one lower-cost structure.
Good fit
- Purchasing commercial premises your business currently leases
- Funding a major plant expansion or production upgrade backed by property equity
- Acquiring a competitor or complementary business beyond unsecured limits
- Refinancing an existing loan stack at a lower rate using property equity
- Financing a franchise rollout or multi-site expansion with property as cornerstone security
Poor fit
- Smaller borrowing needs under $100,000 where unsecured speed wins
- You don't own property or substantial assets to pledge
- You need funds in days, not weeks
- Volatile cash flow that can't sustain a long-term commitment
- You're not comfortable putting personal or business assets at risk
Quantifying the Trade-Off (May 2026 example)
The rate differential between secured and unsecured business lending is meaningful — and it compounds over time.
| Scenario | Secured @ 8% p.a. | Unsecured @ 17% p.a. |
|---|---|---|
| Loan amount | $500,000 | $500,000 |
| Term | 7 years | 5 years |
| Monthly repayment | ~$7,780 | ~$12,390 |
| Total interest paid | ~$152,700 | ~$243,400 |
| Interest saving (secured) | ~$90,700 | — |
Illustrative example only. Real rates depend on lender, security quality, and borrower profile.
What to Compare on Secured Term Loans
Secured term loans have more moving parts than unsecured products. Compare across:
Interest rate and comparison rate
Get the comparison rate, which includes lender fees. For a 10-year, $1M facility, even a 0.5% rate difference is worth fighting for.
LVR policy
How much of your asset's value will the lender advance? Higher LVR = more borrowing power.
Security priority
Can the lender take a second mortgage behind an existing one? Some will; many won't.
Valuation costs
Typically $500–$2,000+ for commercial property valuations, paid upfront. Factor this into your comparison.
Legal and settlement fees
Mortgage registration, legal documentation, and settlement costs add $1,500–$5,000+ to the process.
Early repayment and break fees
Longer-term secured loans often carry meaningful break costs if you refinance or sell the secured asset early.
Loan structure
Interest-only periods (common in commercial property), balloon payments, and P&I schedules each affect cash flow differently.
LoanGorilla compares secured term loans from 40+ lenders across all of these dimensions — not just the rate.
Potential Drawbacks
Your family home is at real risk if business fails
Many SME operators use residential property (including the family home) as security because it unlocks the best rates and highest LVRs. The consequence of default is real — the lender can and will enforce the security. Use investment or commercial property first if you have it.
Reduced asset flexibility while secured
Property or equipment used as collateral can't be sold, subdivided, or substantially altered without lender approval — sometimes for years. This isn't just administrative friction; it can constrain strategic options at the worst possible time.
Valuation gaps during market downturns
If property values fall after you've borrowed at a high LVR, you can end up in negative equity. Most commercial property secured loans have LVR covenant clauses — breaching them can trigger a review or early repayment demand.
Eligibility Snapshot
Secured term loan lenders typically want: an active ABN, 12–24 months of trading history, a demonstrable ability to service the debt from business cash flow, and security with clear title and sufficient equity. Banks typically require 2+ years of trading and full financials; specialist and non-bank lenders can sometimes work with shorter histories if the security and cash flow are strong.
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Rates shown are subject to change. WARNING: Comparison rates are true only for the example given and may not include all fees and charges. Always read the lender's terms before applying.