When your business is ready to grow, the biggest hurdle is often cash flow. Whether you need capital to fit out a second location, invest in new staff or equipment, or simply strengthen your buffer, using equity in property can be a strategic and cost-effective way to fund expansion. In 2025, as business lending remains tight, tapping into equity offers an alternative that many business owners overlook.
What Is Equity and How Does It Work for Business Owners?
Equity is the difference between what your property is worth and what you still owe on the mortgage. If you’ve owned a home or commercial premises for several years, chances are you’ve built up equity — either through paying down the loan, rising property values, or both. You can access this equity through refinancing, drawing down a line of credit, or applying for a new loan secured against your existing asset.
Unlike unsecured business loans, equity-based lending tends to come with lower interest rates, longer repayment terms, and higher borrowing limits. That makes it ideal for business owners who want flexibility and breathing space while investing in long-term growth.
Different Ways to Tap into Equity
There are multiple ways to structure a loan using equity, and your broker will help assess which option suits your situation best. These might include:
Loan Top-Up: If you’re keeping your current lender, a simple loan increase might be all you need. The process is relatively quick and uses your existing mortgage structure.
Equity Release via Refinance: You may switch to a new lender who offers a better rate and higher loan amount, providing a lump sum to reinvest into your business.
Line of Credit Facility: A revolving credit line secured by your property, giving you the flexibility to draw down funds only when needed.
Each has its benefits, and choosing the right structure will depend on how much you need, when you need it, and how you plan to repay it.
Risks and Considerations
Equity lending should be approached strategically. Taking out more debt than your business can service, or failing to consider what happens if interest rates rise, could strain your personal and business finances.
Make sure to:
- Avoid over-leveraging your property
- Plan repayments based on conservative business forecasts
- Understand potential tax implications with your accountant
Working with a broker can help you compare multiple scenarios and find a structure that aligns with both your short-term business goals and long-term personal wealth plan.