Short answer: A settlement advance is a short loan secured against a property you have already sold, repaid from the sale proceeds at settlement. It lets a business use that money weeks earlier instead of waiting. Lenders look at the signed contract, the equity left after your existing mortgage, and a backup exit if the sale falls over.
What is a settlement advance?
You have sold a property. The contract is signed and the buyer has paid a deposit, but settlement is weeks or months away. Meanwhile the business needs money now: a tax deadline, a supplier, a deal that won’t wait.
A settlement advance bridges that gap. It is a short loan secured against the property you have sold, and it is repaid from the sale proceeds when settlement happens. You are not borrowing against hope. You are borrowing against a signed contract.
With us it is a property-secured business loan. It usually sits behind your existing lender as a second mortgage, or as a caveat loan in Victoria, and it is assessed the way all of our property loans are: on the equity and on the exit. Here the exit is unusually clear. It is the settlement itself.
When business owners use one
The common thread is a deadline that lands before the sale money does.
- A tax deadline. An ATO payment plan in default or a director penalty notice with days to run. See our page on ATO tax debt.
- Your purchase settles before your sale. You bought new premises and sold old ones, and the dates don’t line up. That is a classic settlement shortfall.
- An opportunity with a closing date. A business for sale, a bulk stock buy, a deposit on the next site.
- A cash-flow crunch. Payroll, rent or a supplier who has moved you to cash on delivery.
It has to be for a business purpose. Selling your home rather than an investment property doesn’t rule it out. What matters is what the money is for, not which property secures it.
What a lender looks at
A settlement advance is quick to assess because most of the answers are in the contract. Expect questions about four things:
- Is the sale unconditional? Cooling-off finished, finance and building clauses satisfied or waived, deposit paid. Until then the sale can still fall over.
- What is left after the payout? Sale price, less the existing mortgage, agent’s commission and other selling costs. That figure is the real security.
- When is settlement? The loan term is set to run past it with a margin.
- What if the buyer doesn’t settle? A lender wants a plan B, usually a refinance or a resale. A sale that falls through is rare once a contract is unconditional, but it happens.
Take a transport operator who has sold a small industrial unit. The contract is unconditional, settlement is nine weeks away, and an ATO payment plan has defaulted with a deadline in ten days. After the existing mortgage and selling costs there is solid equity left. This is an illustrative example, but it shows the shape: a short advance pays the ATO now, and settlement pays the advance out.
How repayment works on settlement day
You don’t write a cheque at the end. Before settlement, your conveyancer asks each lender on the title for a payout figure: your existing lender first, then us. On the day, those amounts come straight out of the buyer’s funds, the mortgages are discharged, and the buyer gets clear title. Whatever is left goes to you. The advance is simply one more line on the settlement statement. That is also why the paperwork matters. Give us your conveyancer’s details early, so the payout request isn’t the thing that holds up settlement.
Early release of the deposit: the cheaper option, if you qualify
Before you borrow, check whether you can use the buyer’s deposit. It costs nothing in interest. The catch is that it is only the deposit, often around a tenth of the price, and the rules are strict.
In Victoria, Consumer Affairs Victoria says early release needs an unconditional contract, a buyer satisfied with your information about debts on the property, no secured debts or debts no more than 80 per cent of the sale price, and at least 28 days since the contract was signed (Consumer Affairs Victoria).
That process is being replaced. The Consumer Legislation Amendment Act 2026, which received Royal Assent on 8 September 2026, repeals the section 27 release process in the Sale of Land Act. From 1 June 2027 at the latest, a deposit can only be released early if the contract expressly allows it and both sides agreed. If you are selling in Victoria, raise it with your conveyancer before the contract is drafted, not after.
In New South Wales there is no statutory process. It depends on a release-of-deposit special condition the buyer agrees to, often limited to things like the deposit on your own next purchase. Off-the-plan deposits must stay held until settlement (NSW Registrar General).
Deposit release, bridging or a settlement advance
| Option | How much | How fast | The catch |
|---|---|---|---|
| Early deposit release | Up to the deposit held | Depends on the buyer and the state’s rules | Buyer must agree; amount is capped; Victorian rules are changing |
| Bank bridging loan | Varies | Bank timeframes, with full financials | Built mainly for buying your next home, not for business cash |
| Settlement advance | $20,000 to $5M, depending on equity | As little as 24 hours | Costs more than a bank; you need a plan B if the sale fails |
| Ask the buyer to settle early | The full proceeds | Only if the buyer’s lender is ready | You can ask, but you can’t make them |
For many sellers the answer is a mix: release what the contract allows, and advance only the gap. For larger or more complex cases, our business bridging loans page covers the wider options, and urgent bridging loans covers the tightest deadlines.
What it costs, and how to keep it down
A settlement advance costs more than a bank loan. You are paying for speed, certainty and a lender that doesn’t need your financials. Because the term is short, the number that matters is the total in dollars, not a headline figure.
- Ask for the full cost. Interest for the expected term plus establishment, legal and valuation costs, written as one dollar figure.
- Check for a minimum term. If settlement comes early, will you pay for the full period anyway?
- Borrow the gap, not the maximum. Every extra dollar costs money until settlement.
- Build in a buffer. A term that ends the day of settlement leaves no room for a delay.
Our page on business loan costs lists the questions to put to any lender.
When a settlement advance is the wrong answer
It is a bridge, so it only works if there is solid ground on the other side.
If the sale is still conditional, you are relying on a contract that can disappear, and the loan needs a different exit. If the business will still be short of cash after settlement, the advance only buys time. The underlying problem needs a longer-term fix, such as a loan sized for it or a change to how the business runs. And if the existing mortgage and selling costs leave little equity, there may not be enough room to borrow safely.
If the problem is the other way round, with your own purchase at risk because the bank pulled out, read our guide on finance falling through before settlement.
See how much you could unlock before settlement
Bring the contract of sale, the expected settlement date and a rough idea of what is owed on the property. That is usually enough for us to tell you within a day whether a settlement advance works and how much it could be.
Start with the 60-second eligibility check. It makes no credit enquiry and costs nothing to apply. If the deadline is days away, our 24-hour business loans and urgent business loans pages explain how the fastest settlements are done, or call 1300 863 711.
Frequently asked questions
Can I get a settlement advance before the sale is unconditional?
Some lenders will look at it, but while cooling-off or a finance clause is still running the sale isn’t certain. The lender then needs a second way to be repaid, usually a refinance, so expect it to be assessed more like an ordinary property-secured loan.
How much can I borrow?
It depends on the equity: the sale price, less what is owed on the property and the costs of selling. We lend $20,000 to $5M against residential, commercial or industrial property, and we don’t need financials or tax returns.
What happens if settlement is delayed?
Interest keeps running until the loan is repaid. Set the term with a buffer past the expected settlement date and tell the lender as soon as you hear of a delay. A short extension is far easier to arrange before the due date than after.
Does the buyer have to agree?
No. The loan is registered against your title like your existing mortgage and paid out of the proceeds at settlement. Your conveyancer arranges the payout figures with each lender, so the buyer still receives clear title.
Can I use the money for personal costs?
No. These are business loans for business purposes, such as a tax debt, payroll, stock or buying a business. If the money is for personal use, a consumer lender or mortgage broker is the right path.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
