More funding routes, the real divide in commercial property, and personal guarantees explained

There are more ways to fund a business than there used to be

Sentiment has shifted this year, and it is carrying into business and commercial appetite alongside housing. Having spent years in banking, I watch what lenders actually do rather than what the headlines say. The majors remain central to business and commercial lending and are the right answer for most deals. What has changed is that they are more selective on the larger and more complex ones.

Alongside that, the alternatives have grown. Private credit and challenger lenders can increasingly support a business where a major cannot, whether that is bridging finance or a structure that fits how the business runs. Credit is still growing, so the shift is simply that there are more places to take a deal than there were a few years ago.

For a business owner or acquirer, the lender you approach matters more than it has in years, and finding the right one is most of the work.

In commercial property, asset quality is the real divide

The headlines on commercial property, office in particular, have been uniformly gloomy. The picture underneath is more nuanced. Most of the vacancy is concentrated in secondary buildings, while prime, well-located assets with strong tenants are holding up. In several markets, prime stock is now trading below what it would cost to build today, which is the kind of gap that tends to interest buyers with a longer horizon.

There is also a quieter tailwind from the budget. The negative gearing and CGT changes apply to established residential property. Commercial was left untouched. For investors reassessing residential after the budget, that gives commercial a relative tax advantage it did not have a year ago, and we are hearing more of those conversations.

On the lending side, the quality tier of the asset drives serviceability and risk assessment far more than the sector headline does. A prime asset with a strong covenant is a very different conversation with a lender than a secondary one, even in the same building type. If you are weighing a commercial purchase, that distinction is worth getting right early.

Personal guarantees, explained

On almost every early searcher call, the personal guarantee comes up, usually as a worry about the family home. It is one of the most common questions we get, so it is worth setting out plainly what it actually is.

A personal guarantee is a commitment that makes you personally responsible for the loan if the business cannot repay it. What matters is the detail: what it covers, what is genuinely at risk, and how far that exposure extends.

It also helps to know how lenders treat them in practice. Enforcing a guarantee is a last resort. If a business runs into difficulty, the first step is almost always a restructured repayment plan.

We have put together a guide that walks through how they work, the three types, and what is actually at risk. Read the full guide here.

Client outcome: a second acquisition, financed on positioning

An operator who had completed their first acquisition within the past year came to us with a second business already on the table. The timing made existing lenders cautious. The first business was still early in its operation, and its trading was running differently to the original model.

• 70% · $1.26M bank loan
• 17% · $300K vendor / deferred
• 13% · $240K cash

The $1.8M deal landed at 70% leverage on the operator, comfortably within lender appetite. It got done because the operator, the structure, and the rationale were positioned clearly enough that the credit team could see the business the way the buyer did.

Acquisition finance is decided on how clearly the deal is positioned. Rate is rarely the thing that earns a yes. We have sat on both sides of a credit team, and that is the work we do. Read the full case study.

Australia ETA Community

If you're exploring business acquisition in Australia, the Melbourne ETA community is a good place to start. Resources, upcoming events, and connections in one place. Visit the Australia ETA Community.