Business finance to bridge the wait until a property sells

The sign out the front says “Sold”. The agent has the signed contract. Settlement is ten weeks away. Meanwhile, the business has a tax bill due on Friday, a supplier refusing to ship again until the account is cleared, or a contract that needs materials bought now. The proceeds are on their way, only not in time.

Lots of owners borrow short term against real estate for exactly this reason: the stretch between agreeing a sale and seeing the money. This page explains how to fund it sensibly, and how to avoid borrowing against proceeds that turn out smaller than you expected.

This is a different problem from buying before you sell, where the bridge funds a new purchase. If that’s your situation, our bridging finance page covers peak debt and end debt. Here, the focus is on releasing cash from a property that’s on its way out the door.

Sold, or just listed? Lenders see two different loans

The single biggest factor in how much you can borrow, and how easily, is where the sale is up to.

Where the sale is at	How lenders view it	What to expect
Unconditional contract, settlement date set	The exit is close to certain, subject to the buyer completing	Higher share of the net proceeds, quicker approval, simpler questions
Contract signed but still subject to finance or other conditions	The exit is likely but could fall over	Lender may wait until conditions clear or lend more conservatively
Listed, no contract yet	The exit depends on the market	Smaller loan against the lender’s valuation, a plan B required
Not yet listed	Really a standard property-secured loan	Assessed on equity and an alternative repayment plan

If the timing allows, waiting until the contract goes unconditional often improves both the amount and the total cost. If it doesn’t, a lender can still help on a listed property, but expect them to discount the asking price and to ask what happens if no buyer appears.

What will the sale really leave you?

Lenders don’t lend against the sale price. They lend against what’s left after everything that comes out at settlement. Work it out before you ask, because owners routinely overestimate it.

• The existing mortgage payout, including any break costs if the loan is fixed, and the discharge fee.
• Agent’s commission and marketing, which normally come out of the sale money.
• Any other debts registered on the title, for example an earlier caveat or second mortgage.
• GST, if you’re selling commercial property in a taxable sale rather than as a going concern.
• Tax you’ll owe on the gain, which isn’t deducted at settlement but is very much a claim on the money.
• Capital gains withholding, the trap covered below.

The 15% withholding most sellers don’t expect

Since 1 January 2025, the foreign resident capital gains withholding rules apply to every Australian property sale, whatever the price, and the withholding rate rose to 15%. Australian resident sellers avoid it by giving the buyer a clearance certificate from the ATO before settlement. Without one, the buyer has to keep back 15% of the price and send it to the tax office, and the seller recovers it only once their tax return is assessed.

On a $900k sale, that’s $135k missing from settlement. For a lender relying on those proceeds, it can turn a comfortable loan into a shortfall. Processing can stretch to 28 days according to the ATO, so lodge the application well ahead. A certificate lasts 12 months, and each seller named on the title needs their own, matching the title exactly. A bridging lender will almost certainly ask whether yours is in hand.

Which kinds of finance fit the wait?

Option	How it works	Speed	Fits best when
Caveat loan	Security by caveat over the title you’re selling	Very fast, often days	Settlement is weeks or a few months away and the need is urgent
Second mortgage	Registered behind the existing mortgage	A little slower	Larger amounts, or a longer or less certain wait
Top-up from your current lender	Your mortgage lender increases the existing loan	Varies	The bank is supportive and the timing works
Early deposit release	Part of the buyer’s deposit released before settlement, where the contract and state rules allow	Depends on buyer consent	The need is small and fits the permitted purpose
Business line of credit	An unsecured or secured facility drawn as needed	Fast if already in place	The gap is modest and the business already has one

Banks are often the cheapest option, so if your mortgage lender will top up the loan quickly, ask. Where the bank can’t move in time, or won’t lend against a property it knows is about to be sold, short-term private lenders do this every day. HomeSec Business Finance, our own lender, is one example: its lender profile lists bridging loans alongside caveat and second mortgage loans secured on property. Our comparison of bridging finance and caveat loans sets out how the two structures differ.

Waiting on a settlement and need funds sooner? Tell us about the property and the sale. It’s a quick form, and nothing about asking affects your credit rating.

Why there may be no repayments until settlement

Short-term property lenders commonly structure the interest so you don’t pay anything month to month:

• Capitalised interest rolls into the balance monthly and is cleared together with the principal on settlement day. Our glossary entry on capitalised interest explains the mechanics.
• Prepaid interest is calculated for the expected term and deducted from the loan when it’s paid out, so you receive a little less upfront.

Both keep cash in the business while you wait, which is the point. Both also mean the amount owing at settlement is larger than what you received, so build that into your net proceeds figure. The bridging loan calculator helps you see the end balance for a given term.

How much should you borrow against the sale?

1. Start from the realistic net proceeds, after every deduction above.
2. Allow for delay. Settlements slip. A buyer’s lender runs late, a title issue appears, a public holiday gets in the way. Price the loan for a few weeks longer than the scheduled date.
3. Allow for the price, if the property isn’t sold yet. Use the lender’s valuation, not the listing price, and assume some negotiation.
4. Take only what the business genuinely needs, rather than the most a lender offers. The less you take, the more of the sale comes back to you.
5. Have a plan B, such as refinancing into a longer loan, if the sale falls over.

Worked example: a Perth builder waiting on an investment unit

This is an illustration only. Dean runs a small building company in Perth and has sold an investment unit for $720k with an unconditional contract and settlement in 75 days. The business needs $160k now to clear an overdue ATO debt and pay for materials on a new job.

Net proceeds estimate	Amount
Sale price	$720k
Less existing mortgage payout and discharge	$410k
Less agent’s commission and marketing	$20k
Expected net proceeds	$290k

Dean’s accountant has already obtained his ATO clearance certificate, so no withholding applies. A private lender approves a $160k caveat loan over four months with interest capitalised, comfortably inside the net proceeds even if settlement runs a few weeks late. The ATO debt is cleared within days, the materials are bought, and at settlement the conveyancer repays the caveat loan from the proceeds. The lender withdraws its caveat, and Dean receives the balance.

The key numbers were the net figure and the unconditional contract. Without the clearance certificate, $108k would have been withheld, leaving far less room.

Mistakes to avoid

• Borrowing against the gross price. The mortgage, fees and tax all come first.
• Forgetting the clearance certificate. It’s free, but it takes time, and missing it hits proceeds hard.
• Matching the loan term exactly to settlement. Leave yourself a few weeks of slack.
• Hiding the sale from the lender. A lender who knows the property is sold can structure around it. One who finds out later won’t be pleased.
• Using a short-term loan for a long-term problem. If the business needs funding beyond the sale, plan a proper refinance.

Turn a pending sale into money the business can use

A property sale is often the best exit a short-term lender can see, which is why this kind of request is usually very fundable, sometimes within days. We regularly help owners who are watching a settlement date while a bill won’t wait.

Completing the enquiry is about a minute’s effort, and simply asking leaves your credit history as it was. Nothing you send is broadcast across the market; a single team keeps it, and an actual person reviews the sale and the deadline, then rings you. Enter the true sale price, the settlement date and the current mortgage balance, because accurate figures let us point you at a fitting option straight away.

See what your pending sale could unlock →