Quick answer: Do not assume the answer is always yes or always no. The existing mortgage documents and lender policy need to be checked. Some transactions require first-mortgagee consent or priority arrangements before a second-ranking lender will proceed.
Property-security filter: This page is about business-purpose finance backed by Australian real property. If there is no suitable property available as security, this particular funding pathway will generally not apply.
Questions behind this page
- Does the first mortgage lender have to consent?
- Will the bank know about a second mortgage?
Start with the existing mortgage documents
The first mortgagee already has contractual rights over the property. Further security can be restricted by those documents or by lender policy.
The second lender also sets conditions
Even if the borrower has substantial equity, the junior lender may require acknowledgement, consent or a priority arrangement before funding.
Do this before paying unnecessary costs
A second-mortgage scenario should identify the first lender, current debt and property value at the outset so the broker can test whether the structure is realistic before ordering valuations or legal work.
What GPS Finance needs to test a scenario
- Australian property offered as security
- estimated property value and current secured debt
- amount required and business purpose
- whether the proposed facility is first or second ranking
- required timeframe
- proposed exit or repayment strategy
Ask GPS to review a property-backed business scenario.
Related guides
- Property-backed business finance
- Second mortgage business finance
- Bank funding shortfall
- Short-term property-backed finance
Sources and verification
General information only. Business-purpose property-backed lending, private lending, first and second mortgage availability, valuation, pricing, fees, security priority, consent requirements and exit criteria vary by lender and transaction. This is not legal, tax, accounting or personal financial advice.
Need help matching this to a business-finance option?
GPS Finance can review the funding purpose, conduct, documents and lender fit before you make a formal enquiry.
