Using home equity to fund a food truck, van or mobile business

Lots of mobile businesses start with a great idea, real skills and not much else a lender can see. There’s no trading history yet, so unsecured options are limited. But many of those owners do have something valuable: equity in their home or an investment property. Using it as security can turn “not yet” into “let’s talk”.

How does a property-secured business loan work?

The lender takes security over residential or commercial property you own, and lends to your business based largely on that security rather than on the business’s trading record. The money must be used for business purposes: buying the truck or van, paying the builder, stock, gear, working capital.

Secured amounts start at $20k and can reach $5m. There are three main structures:

Structure	How it works	Often used for
First mortgage	The lender holds the first-ranking mortgage over the property	Unencumbered property, or refinancing an existing loan
Second mortgage	Sits behind your existing home loan, using the equity above it	Owners who want to keep their current home loan
Caveat loan	Lender registers a caveat on the title; usually shorter-term	Short-term business needs

When does property security make sense for a mobile business?

• New operators with no trading history — the property provides comfort the business can’t yet.
• Bigger builds — a custom food truck, a second rig or a fleet of courier vans.
• Fit-outs paid in stages — the money is available as the builder invoices, rather than tied to a half-finished vehicle. See food truck fit-out finance.
• Owners with credit blemishes — security can help when the credit file is less than perfect; bad credit is considered case by case.
• Consolidating — tidying several expensive business debts into one.

If you’ve been trading steadily for a while, compare this with turnover-based options. Unsecured funding in the $5k to $500k range leaves your property out of it altogether.

Thinking about using your property? See if you qualify — quick, obligation-free and without a credit check.

What does the lender look at?

• The property — its value, location and type, and what’s already owed on it
• The purpose — what the funds are for, with quotes or invoices
• The business plan — how the business will earn, especially for a new venture
• The exit — how the loan will be repaid, particularly for shorter-term loans
• You — your experience, your credit history and your other commitments

A clear plan matters. business.gov.au’s guidance on applying for a business loan suggests having your business plan, financial statements or forecasts and identification ready, and understanding what repayment you can afford before you apply.

The risks, honestly

Putting your home up as security for a business is a serious decision, and it deserves a serious plan:

1. Test the numbers conservatively. Use the truck-stop calculator and check the quiet-week column, not just the good weeks.
2. Don’t borrow the maximum just because you can. Borrow what the project needs, plus a sensible buffer.
3. Know the exit. For a short-term loan, know whether you’ll repay from trading, refinance later or sell an asset.
4. Talk it through at home. If others live in or co-own the property, they need to be part of the decision.
5. Get independent advice from your accountant on structure and tax.

Illustrative example: chef to truck owner

An experienced chef wants to launch a smoked-meat truck. The custom build and start-up costs total well beyond his savings, and with no trading history, unsecured options are limited. He and his partner own their home with a modest mortgage. A second mortgage behind the existing home loan funds the build in stages as the builder invoices. They plan to refinance to a turnover-based facility once the truck has a solid trading record. (Illustrative only.)

For the full picture of building a truck, see food truck finance. If you’re expanding an existing business, see adding a second truck or van.

First, second or caveat: how to choose

The right structure usually depends on three things:

1. What’s already on the property. If there’s an existing home loan you want to keep, a second mortgage or caveat loan sits behind it. If the property is owned outright, a first mortgage may make more sense.
2. How long you need the money. Caveat loans and many second mortgages are typically shorter-term. A longer-term need may suit a different structure, or a plan to refinance once the business has a trading record.
3. How the loan will be repaid. From trading income, a refinance, or the sale of an asset. Be specific.

A specialist will talk you through the trade-offs for your situation. You don’t need to have picked a structure before you enquire — just be clear about the property, what’s owed on it and what the money is for.

Unlock the equity, with a plan

Property security can get a great mobile business off the ground. Tell us what you want to fund, the property you’d use and how the business will trade. Asking is quick and doesn’t involve a credit check, and a real person reviews your situation — your details aren’t farmed out to a queue of lenders.

Please fill in the form accurately, including roughly what’s owed on the property. It helps us match the right structure first time.

See if property security could work for me →