Short term business loans — without the short term

A short term business loan is business finance taken for a defined, usually brief period and repaid from a known event rather than from trading profit. HomeSec funds exactly this kind of borrowing, from $20,000 to $5,000,000 against property security, in as little as 24 hours. What we do differently is that we do not fix the term. There is no minimum, no maximum, no penalty for repaying early and no fee for extending.

What people mean by a short-term business loan

Almost nobody wants a loan for a short time. They want a loan for however long the problem lasts, and every lender they have spoken to has offered them a fixed block of months instead. "Short term" is the phrase the market uses for borrowing that is not a twenty-year bank facility, and it is usually the wrong shape for the problem it is meant to solve.

What sits behind it is usually one of four things: a bill with a date on it, a payment that is late arriving, an opportunity that closes this week, or a lender who has said no. Those are the situations we fund, and none of them come with a term attached.

Short term property finance, and the one version of it we do not do

A lot of people arrive here having searched for a short term property loan or short term property finance rather than for a business loan. It is the same money, described by its security instead of its purpose — and the phrase covers two different things that need two different lenders. What separates them is not the property and not the term. It is what the money is for.

The version we do

Short-term finance secured by real property, for a business or investment purpose. HomeSec provides credit wholly and exclusively for business and investment purposes. The property is the security; it does not have to be the thing you are buying, and in most files it is not. A borrower uses equity in a property they already own to solve something happening somewhere else in the business — a tax bill with a date on it, stock that has to be paid for this week, a settlement that is short, a facility a bank has called in.

The property can be residential or commercial, held personally or in a company or trust. Residential security is assessed to 80% LVR and commercial security to 70% LVR, and the loan runs from $20,000 to $5,000,000. No sworn valuation and no financials, and the term stays open — which is the whole argument of this page and the thing a fixed three-month property loan cannot give you.

Two neighbours to this page, if your situation is really one of them:

• Buying the property itself — where the loan funds a purchase rather than sitting behind one you already own.
• Bridging finance — where the exit is a specific transaction with a date on it, which is the business cousin of the consumer bridging above.

Why we are not a short term lender

A fixed term is a lender's convenience dressed up as a product feature. It lets the lender price a defined risk window and plan its book. It does very little for the borrower, and when the term is wrong it does real harm.

HomeSec funds its own loans, with its own money, and has since 2004. That is why we can leave the term open: there is no fund mandate behind us requiring capital back on a date, and no credit committee that needs the maturity profile to look tidy. If your settlement moves, we move with it. It costs you nothing and it takes a phone call.

Fixed term against open term

A comparison of lender process and terms, not of price. Rates are risk-priced per file and we do not publish a headline number — here is why, and here is what it actually costs.

What a minimum term costs — in months, at any rate

Most short-term lenders write one to twelve months with a three-month minimum interest period. We publish no rate, so here is the arithmetic in months charged, which holds whatever the rate is.

Fixed-term characteristics are general category observations of short-term business lending, September 2026. Individual lenders vary.

Interest-only business loans, and the other option

Two ways to structure repayments, and you choose. Interest-only: interest paid monthly, principal repaid at the exit. Capitalised: no payments at all for up to 6 months, the interest added to the balance, everything cleared from the exit. No daily or weekly direct debits. Neither structure has a fixed term, and either can be changed by a phone call if the plan moves.

From the call to the money

What it costs

Priced per file, on the property, the position, the amount and the exit. No rate is published, because a rate with "from" in front of it is the best file's number. How it is priced, and every fee that exists.

What happens at the end of the term

Nothing automatic, and nothing punitive. Interest is prepaid for the period you chose, so there is nothing to service along the way. When that period is coming to an end you either repay, or you tell us you need longer and we extend it. There is no fee to extend, and most extensions are done in a single phone call.

The one thing that matters is the exit. We will ask about it at application and we will keep asking, because a loan without a clear way out is a problem we would both rather not have. An exit that is dated and documented — a signed contract of sale, a formal letter of offer from an incoming lender, a certified progress claim — is what makes an open term safe rather than reckless.

Which product this actually is

"Short term business loan" describes when you need the money, not how the money is secured. The security decides the product, and there are three:

• Caveat loan — fastest to settle, no first mortgagee consent required, typically the answer when the deadline is days away.
• Registered second mortgage — larger amounts, better priced, sits behind your existing first mortgage.
• Bridging finance — where the exit is a specific transaction with a date on it.

You do not need to work out which one you want. Tell us the amount, the purpose and what property is available, and we will tell you which instrument fits and what it costs — generally within the hour.

Reviewed by Paul Stone, Joint Chief Executive