Quick answer
Property owned by a company, family trust or unit trust can secure a private business loan. The owning entity grants the mortgage or caveat, and directors or trustees usually provide personal guarantees. Lenders need the company details or trust deed to confirm who has power to borrow and sign. Private lenders handle these structures routinely, even when banks find them complex.
Key points
- The owning company or trustee grants the security
- Directors or individual trustees usually give guarantees
- The trust deed must allow borrowing and granting security
- Private lenders deal with these structures every day
- Owners accepted
- Companies, family and unit trusts
- Documents
- ASIC extract, trust deed, ID
- Guarantees
- Usually from directors or trustees
- Loan size
- $20,000 to $5,000,000
Lots of business property in Australia isn’t owned by a person at all. It sits in a company, a family trust or a unit trust, often for good tax and asset protection reasons. Banks can make heavy work of these structures. Private lenders handle them routinely.
How it works
The legal owner of the property, the company or the trustee of the trust, is the one that grants the mortgage or caveat. It may also be the borrower, or it may be providing security for a loan to a related business.
Because a company or trust can’t personally stand behind a loan, lenders usually ask the individuals behind it to guarantee the debt.
| Owner | Who signs the security | Typical guarantors |
|---|---|---|
| Company | The company, through its directors | All directors |
| Family trust with a corporate trustee | The trustee company | Directors of the trustee |
| Family trust with individual trustees | The individual trustees | The trustees personally |
| Unit trust | The trustee | Directors of the trustee, sometimes major unitholders |
Documents the lender will need
- a current ASIC company extract for any company involved
- the full trust deed and any variations
- details of the appointor and beneficiaries, for a trust
- ID for every director, trustee and guarantor
- confirmation of who owns the shares or units, where relevant
The lender’s solicitor reviews these to confirm the entity has power to borrow and grant security. Older deeds sometimes lack the right powers, and fixing that can take time, so send the deed early.
Cross-entity security
A common situation: the property is owned by a family trust, but the business that needs the money is a separate company. Many private lenders accept this if the trust deed permits the trustee to give security or guarantees for a related party. Expect a closer legal review and possibly a requirement for advice to the trustee.
Why private lenders are easier here
Bank policy often struggles with layered structures, cross-entity security or trusts with unusual deeds. A private lender’s solicitor simply works through the documents. As long as the entity has the power and the right people sign, the structure isn’t a barrier.
A note on director obligations
If the company is under ATO pressure, directors may face personal exposure through director penalty notices. Using company or trust property to clear those debts quickly can protect directors’ personal assets. Get advice on the best way to structure it.
A worked example: the trust’s warehouse backs the company
A family trust in Brendale owned the warehouse leased to the family’s transport company. The company needed $600,000 to settle a fleet purchase before a supplier price rise, but its own balance sheet carried heavy equipment finance. The bank said the cross-entity structure would need a full restructure of its facilities.
A private lender read the trust deed, confirmed the trustee company had power to give security for a related party, and took a first mortgage over the warehouse. The directors of the trustee and of the transport company gave personal guarantees, and the trustee received independent legal advice before signing.
From first enquiry to settlement took nine business days, most of it spent locating the original deed and a variation from years earlier. The loan ran for twelve months while the company’s accountant prepared a restructure that the bank later refinanced.
Common snags with entities
Most delays in company and trust deals come from paperwork, not lending policy. Watch for:
- trust deeds that can’t be found, or that exist only as unsigned copies
- deceased or departed trustees who were never formally replaced
- a corporate trustee that has been deregistered or has overdue ASIC fees
- appointors or guardians whose consent the deed requires before borrowing
- share or unit registers that don’t match what the owners believe
- old caveats, charges or PPSR registrations that still need releasing
Sorting these out early can save a week. If you’re unsure whether your structure is in order, send what you have and the lender’s solicitor will tell you what’s missing.
A quick call to your accountant before you enquire, asking for the latest ASIC extract and a copy of the deed, is usually the single most useful thing you can do to speed up a structured deal.
Send us the structure
Tell us who owns the property, what’s owed, which business needs the money and why. We’ll tell you how a private lender would approach it and what documents to gather. There’s no credit check when you first enquire, and your details stay with our desk.
Accurate ownership details help us brief the right lender first time. See if you qualify, or read about commercial and industrial security and then get in touch.
Frequently asked questions
Does the trust deed matter?
Yes. The lender's solicitor will check that the trustee has power to borrow, to grant security and, if relevant, to guarantee another party's debt. Older or unusual deeds sometimes need a variation or a beneficiary's consent.
Can a trust's property secure a loan to my company?
Often, yes, if the trust deed allows the trustee to give security or guarantees for another party. The lender will want to see the deed and may require advice to the trustee.
Who needs to give guarantees?
Usually all directors of a corporate borrower or trustee, and sometimes key beneficiaries or shareholders. The lender sets the requirement based on the structure.
Is a self-managed super fund property acceptable?
SMSF property is subject to strict superannuation rules about borrowing and charges over fund assets. It generally can't be used to secure a business loan. Speak to your SMSF adviser.