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Two-thirds of small businesses are using property as security

New research shows despite recent government assistance measures, the family home remains the most common form of security to fund borrowings for SME’s to recover from the pandemic. YouGov research, conducted on behalf of business finance company Apricity Finance, in the last week of April 2021, found the traditional forms of funding for small businesses have now become too hard for them to access.

It also found that the likelihood of adopting secured finance increases as the business size increases, as small businesses with 20 to 49 employees (82 per cent) and six to 19 employees (74 per cent) and two to five employees (63 per cent) are more likely than sole traders to say they prefer or are willing to use secured financing.

The research shows that of small business owners:

  • only 12% applied for finance since the outset of the pandemic in March 2020 until April this year
  • the 12% figure is from the broader total of 39% who said they had either sought finance in the past year, or are planning to in the next two years
  • a similar proportion of businesses who have or intend to seek funding needing it to simply stay afloat (45%), as those who have used or plan to use it to fund growth (44%)

Apricity Finance CEO, Linden Toll said the research shows of those who sought, or would seek, secured finance, 63% have used or would be willing to use their own properties (family or private home) as security.

“It’s our view that these findings show a continued perception that accessing home equity is the easiest way to secure finance. Couple this with new rules enabling access to higher amounts of super for home ownership and we may be looking at a situation where Australian small business owners are putting both their present and future personal security on the line to fund their business, despite this being far from the only option,” said Mr Toll.


“The research found that established businesses (10 or more years old) with an annual turnover of more than $500,000 are more likely than those with less, to have used, or to be aware of alternative funding sources other than the Big Four banks.

The findings found more than one in five (22%), the equivalent of more than half a million small business owners, are not aware of any alternative sources of financing.


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