Video · 1:03

The lender pulled out days before settlement: how a country pub purchase was saved

1:03 · Posted 11 November 2025 on the HomeSec YouTube channel

Paul Stone tells how a buyer's private lender pulled out days before settlement on an 1890s pub in rural South Australia, and how a first mortgage over the pub and second mortgages over three investment properties saved the purchase.

In short

When a lender withdraws days before settlement, the purchase and the deposit are both at risk.
This purchase was saved by spreading the security: a first mortgage over the pub and second mortgages over three investment properties.
One loan can sit across several titles at different ranks, so equity that no single property could provide is combined.
The assessment rested on the property, not on the trading record of a business the buyer did not yet own.

What happened

Paul tells the story of a buyer who had contracted to buy a pub in rural South Australia, a building dating from 1890. With settlement only days away, the private lender funding the purchase withdrew. The settlement date was fixed in the contract, so the buyer was about to lose the pub and, very likely, his deposit with it.

How the deal was put back together

HomeSec took a first mortgage over the pub being bought and second mortgages over the buyer's three residential investment properties. No single property had enough equity behind it to carry the purchase alone, so the loan was secured across all four titles, ranking first on one and second behind the existing lenders on the other three. Lenders call this cross-collateralisation. It lets equity that is spread thinly across several properties do the work of one large security, and the existing home loans on the investment properties stay exactly where they are.

Why this purchase could be funded at all

Two things decide whether a business purchase like this can be helped. The first is what is being bought. A pub sale is partly goodwill, and no lender can take security over goodwill, so the loan has to rest on real property. Here the pub's own freehold was part of the sale, and buying commercial property is something HomeSec can fund in a personal or a company name. The second is time. A lender assessing the buyer's existing properties and the exit can move inside a settlement window; a lender wanting the business's trading history, a valuation and weeks of credit review usually cannot.

The written guide to a loan to buy a business covers buying a business, buying into one and buying out a partner. If the contract was for property rather than a business and the date has already passed, the settlement in rescission video is the closer match.

Planning the way out

A purchase rescued at short notice still needs an exit. For a buyer in this position it is usually a bank refinance once the business has a year or so of trading under the new owner, or the sale of one of the properties offered as security. The term is open, so the loan does not force that decision early, and it can be repaid in full the day the refinance settles with no early repayment fee.

Read the transcript

Sometimes the dream you've worked for can slip through your fingers in a single moment. For one man, that dream was a pub in rural South Australia. The place was built in 1890. It was full of history and ready for a new story. But at the very last minute, his private lender pulled out. So just days before settlement, his dream and his deposit were about to vanish. Now, most people would have walked away, but not him, and not us. We found a way. A HomeSec second mortgage was placed on his three residential investment properties and a first mortgage on the pub. We pushed the limits, because keeping the dream alive was what mattered most. Now that old pub was saved, and today it's thriving. A business, a community, a legacy. Because when others say no, HomeSec steps in. We don't just fund businesses, we fund dreams. We fund what the banks won't. Your project doesn't have to stop.

Transcribed from the recording's own captions. Every loan is subject to assessment and approval, real estate security, fees and an acceptable exit strategy.

Questions people ask next

Can HomeSec fund the purchase of a pub or other commercial property?

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.

Can one loan be secured over several properties?

Yes. A loan can be secured over more than one property, and the ranking can differ between them: a first mortgage over one title and second mortgages over others, as in this purchase. Everyone on each title signs. The amount available is worked out across them all, up to 80% of residential value and 70% of commercial value, less what is owed on each.

What should I do the day my lender pulls out?

Ask your solicitor or conveyancer exactly when the vendor can end the contract and what happens to the deposit if you do not settle, because that sets the real deadline. Then list every property with equity and what is owed on each, and ring a replacement lender with the settlement date, the purchase price and how the loan will eventually be repaid.

The full guide

The video is the short version. The written guide has the detail: a loan to buy a business.

To talk it through about your own property, ring a Lending Manager on 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.