A loan to buy a business, or buy out a partner
HomeSec funds business acquisitions and partner buyouts against equity in Australian real property, from $20,000 to $5,000,000. Because the security is property rather than the business, no vendor financials and no business valuation are required — which is what allows settlement on the contract date rather than weeks after it.
See if you qualify in sixty seconds. No credit check to apply, no financials, no payments for the first six months. That's the HomeSec Advantage.
See if you qualifyThe problem with financing an acquisition is what you are buying
In almost every business sale, most of the price is goodwill — the customers, the contracts, the reputation, the trained staff, the position. Goodwill is genuinely valuable and completely unrealisable for a lender: nobody can repossess a client list. Stock and plant carry something, but usually a fraction of the price and often already under finance.
That is why acquisition lending at a bank is so documented. If the security is weak, the bank has to satisfy itself on the earnings instead, which means the vendor's accounts, a valuation of the business, a serviceability model built on your projections, and several weeks to work through all three. None of that is unreasonable. It is simply slower than most contracts of sale allow.
We solve it from the other end. Equity in real property secures the loan, so the business being bought does not have to prove itself to us before you own it. A person decides every loan. Every application is read by a Lending Manager and every credit decision is signed off by a person. We do not use artificial intelligence to assess, approve, decline or price a loan.
The four versions of this file
| What is happening | How it is usually funded |
|---|---|
| Buying a whole business | Goodwill, stock and plant bought from a vendor, settled on the contract date. Property secures the loan. |
| Buying into one | An equity buy-in with a completion date in a shareholders' or partnership agreement. |
| Buying a partner out | A departing partner or shareholder with an agreed figure and a date. Often the most time-critical of the four. |
| Buying a book or a fee parcel | A client list, a fee base or a run — an accounting practice's fees, a broker's trail, a service book. |
How much you can borrow
Take the property's value, multiply by 80% for residential security or 70% for commercial, and subtract what is already owing on it. What is left is roughly what is available, between $20,000 and $5,000,000. Several properties can be added together, and the borrower does not have to be the owner — companies, trusts and sole traders — including start-ups, with everyone on title signing. Up to 80% on residential and 70% on commercial. Lower on large acreage, and LVRs may reduce on properties worth less than $800,000.
Where the equity covers only part of the price, this is frequently used alongside something else: a vendor finance component, a deposit funded here with a bank facility behind it, or a partial payment that secures the contract while the rest is arranged.
Buying the premises at the same time
We can fund the purchase of a commercial property, in a personal name or a company name, and the purchase of a residential property in a company name. We cannot fund the purchase of a residential property in a personal name: credit for that purpose is regulated consumer credit under the NCCP Act, and HomeSec lends for business and investment purposes only.
Where the business comes with commercial premises, the purchase of those premises can be funded as a first mortgage over the property being bought, and the goodwill component funded against other property. That is a single settlement with two security positions, and it is routine.
Where we are the wrong answer
If there is no real property anywhere in your ownership group, we cannot help, and you should know that on the first call rather than a fortnight before completion. The alternatives worth looking at are vendor finance, a specialist acquisition lender that will lend against the earnings, or a bank with enough time to do its work — and if you have the time, a bank will usually be cheaper.
We are also not the right answer where the purchase is a way of rescuing a business that is already failing. Borrowing against your home to buy into something that is losing money does not fix the losses; it adds your property to them.
From the call to the money
Tell us the deal
Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.
Minutes
Conditional approval
Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.
About 15 minutes
Funds released
As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.
As little as 24 hours
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.
Questions we get on the phone
Can I get a loan to buy a business?
Do you take security over the business I am buying?
Do you need the vendor's financial statements?
Can I buy out my business partner with it?
Can it fund a deposit while a bank funds the rest?
I am buying the premises as well as the business. Can you fund both?
What if the business does not perform after I buy it?
Is there a minimum trading history for me as the buyer?
How quickly can it settle?
Can I repay it as soon as the business is running?
The completion date and the amount are what decide whether this works, and they are both in the contract. Tell us those two things and the property behind you, and you will have an answer on the call. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
See if you qualify in sixty seconds
Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.
That's the HomeSec Advantage.
Reviewed by Catriona Anderson, General Manager