Sold a commercial property but settlement is months away? Get the money now.

The sale is done. The money is not.

Commercial property contracts often carry long settlements. Ninety days is common, and longer terms are negotiated when a buyer needs time to arrange finance, complete due diligence or secure a tenant. For the seller, that means a large sum of money is certain but out of reach. Meanwhile the business still has bills, plans and opportunities that will not wait three months.

We see this scenario regularly. A business owner has sold a warehouse, a shop, an office or a factory unit. They want to clear a tax debt now, buy new premises before someone else does, pay out a partner, fund a project, or simply stop running the business on fumes while the sale grinds towards completion. Equity Tap can advance funds now, secured against property, and be repaid from the sale proceeds at settlement.

Why a bank will not help with a three-month gap

Banks lend on long-term serviceability. A loan that exists only until a sale settles does not fit their process. Even if a bank were willing, a new facility or a refinance commonly takes up to three months or more, which is the whole settlement period. You would be approved, if at all, just as the money arrives anyway. Banks also want years of financials and will check credit history, and a business in the middle of selling an asset does not always have a tidy file.

Cash flow lenders are not built for this either. They lend against trading revenue, not property, and the amounts they offer are rarely enough to match a real need when a commercial property is involved.

How an advance against a commercial sale works

Equity Tap lends from $50k to $5m for one to twelve months, secured by a first mortgage, second mortgage or caveat over residential or commercial property anywhere in Australia. In this scenario the security is usually the property being sold, another property you own, or both.

• If the sold property has an existing mortgage, we can often take a second mortgage or caveat behind it, leaving the first lender where it is. The first lender's consent may be needed.
• If the sold property is clear, we can take a first mortgage over it.
• If there is not enough equity in the sold property alone, we can look at adding another property as security.

At settlement, the sale proceeds repay the existing mortgage, then repay the Equity Tap loan, with the balance going to you. The exit is already written into the contract of sale, which is why this is one of the cleanest scenarios we fund. See our page on a property sale advance for the general product.

No payments while you wait

Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments in that period. For a three-month settlement, that means you get the advance, use it for the business, and the whole loan is repaid from the sale. Interest is not waived; it is simply paid at the start or at the end instead of monthly. Each loan is priced on your individual circumstances, aiming for the sharpest rate available for that situation, and the full cost is shown before you proceed.

What you might use the advance for

If the plan is to buy, look at commercial property loans and business bridging loans as well.

What we need

Because the loan is secured by property, we do not need tax returns, BAS, profit and loss statements, an accountant's letter or bank statements. We need:

• ID for the borrowers and guarantors
• The address and ownership details of the security property
• Details of any existing mortgage and the current balance
• A copy of the signed contract of sale, showing the price and settlement date
• A short note on what the funds are for

We do not order a valuation before approval. That saves time and the cost of a valuation, and you are not pulled away from the business to meet a valuer at the property. No credit check is made at initial assessment, and bad credit history or ATO debt is not automatically a problem.

From first call to funds

1. Call us with the contract details. Price, settlement date, any existing mortgage and how much you need.
2. Conditional approval. Often given on the phone, with a term sheet issued in about 30 minutes.
3. Documents and consent. We prepare the loan documents and, if we sit behind a first mortgage, deal with consent where needed.
4. Funding. Eligible loans can settle in as little as 24 hours.
5. Settlement repays us. When the sale completes, the loan is repaid from the proceeds.

For example, a business owner who has sold a factory unit on a 120-day settlement might take a four-month loan secured by a second mortgage over that unit, use the funds to secure new premises, and have the loan repaid in full on the day the factory sale settles.

What if the sale is delayed?

Settlements do slip. A buyer's finance can run late or a condition can take longer to satisfy. Our terms run from one month to twelve months, so we can set the term with room to spare. If the settlement moves, talk to us early and we will work through the options with you. If the sale falls over completely, the loan still needs an exit, so we look at the property, the equity and any fallback plan at the start. Our guide to business loan exit strategies explains how we think about this.

Brokers

If your client has exchanged on a commercial sale and needs funds before completion, send the scenario through our broker page. You deal with the same lending team and get a fast indicative answer so you can keep the client.

Get the money while the buyer gets organised

You have done the hard part by selling. There is no reason the business should sit still for three months. Apply online or call 1300 123 024 and tell us about the sale. If a residential sale is involved instead, see waiting on a property settlement.

Business-purpose lending only. Approval, timing and terms depend on the scenario.

Frequently asked questions

Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.