Finance for a deposit due on a business or premises purchase

What exactly does the contract say?

Deposits are where “we’ll sort it out” conversations meet hard contract terms. Before anything else, find these four things in the contract, heads of agreement or offer:

1. The deposit amount — a fixed figure or a percentage of the price.
2. When it’s due — on signing, on exchange, within a set number of days, or when a condition is met.
3. Who holds it — usually a lawyer’s or agent’s trust account.
4. The settlement or completion date — and what else must happen by then (finance approval, due diligence, lease assignment).

If anything is unclear, ask your lawyer or conveyancer now. A deposit that turns out to be due “on signing” rather than “within 14 days” changes the funding plan completely.

Why plan the deposit and settlement together?

A deposit is usually the first of two payments. Funding it in isolation can cause a problem later: if you use the equity in your home for a deposit loan, that same equity may not be available for the settlement, and the purchase finance may need to be restructured at the worst possible moment.

Before enquiring, put three numbers side by side:

	Amount	Date	Where it comes from
Deposit
Settlement balance
Costs (legal, stamp duty where applicable, stock, working capital)

A specialist can then look at whether a single structure covers both, or whether a short-term deposit loan now and separate settlement finance later is the better plan. For business purchases, don’t forget the working capital needed from day one — stock, wages and the gap before the first customer payments.

Which funding suits a deposit?

• You own property with equity: a property-secured loan is usually the fastest and most flexible route. Loans run from $20,000 to $5,000,000 as first mortgages, second mortgages or caveat loans; $20k to $250k is possible same day and up to $5m within 24–48 hours. See using property security quickly.
• No property, trading business, smaller deposit: unsecured cash-flow funding, typically $5,000 to $500,000, sized on turnover and bank statements.
• Deposit bond or guarantee: in some purchases the seller will accept a bond in place of cash. Ask your lawyer whether it’s an option — it may reduce how much cash is needed now.

To see how your timing and security line up, try the triage checker, or start the enquiry with the contract to hand.

Can the deposit terms be negotiated?

Often, if you ask before signing — and sometimes after. Options include:

• A later due date, tied to your finance approval.
• A staged deposit: a smaller amount on signing, the balance within a set time.
• A reduced deposit where the seller is motivated.
• A deposit bond in place of cash, where the contract allows.

Any change should be in writing, agreed by both sides, and checked by your lawyer.

An illustrative example

Illustrative only. A physiotherapist agrees to buy a second clinic for $480,000, with a 10% deposit of $48,000 due within five business days of signing and settlement in 60 days. Most of her cash is committed to fitting out her existing clinic. She owns her home with a bank mortgage and significant equity behind it.

Before signing, she enquires with the deposit, the settlement balance and six months of working capital all on one page. A second mortgage funds the deposit within the week. Settlement finance is arranged separately over the following weeks, structured so the second mortgage is cleared at completion — rather than two loans competing for the same security.

What due diligence can’t be skipped, even with a tight date?

A deposit deadline is pressure to sign quickly. Some checks are worth protecting even when time is short. business.gov.au’s guidance on buying a business puts heavy weight on due diligence — reviewing financial records, operations and legal documents such as leases, licences and supplier agreements. At a minimum, before the deposit goes in:

• Confirm what you’re buying: assets, stock, goodwill, contracts and any liabilities that transfer.
• Check the lease if premises are involved — term, options, rent and whether the landlord will consent to an assignment.
• Verify the numbers with your accountant, including recent BAS and bank statements for the business.
• Understand the conditions in the contract and what happens to the deposit if one isn’t met.
• Get legal advice on the contract itself.

A few days spent here protects the deposit you’re working so hard to fund.

What if the deal falls through after the deposit is paid?

Read the contract clauses on conditions and deposits with your lawyer before you pay. Whether a deposit is refundable depends on the contract and on why the deal didn’t proceed. That’s another reason to plan the deposit and settlement together — and to be clear with any lender about the exit if the purchase doesn’t complete, such as repaying the deposit loan from a refunded deposit or from trading.

Secure the deal — see if you qualify

A deposit date is one of the few deadlines you can see coming from the moment you sign. Tell us the amount, the due date, the settlement date and what security you have. There’s no credit check to make an enquiry, your details aren’t auctioned off to a string of lenders, and a real person looks at both payments together and calls you. Please fill in the form carefully — accurate amounts and dates mean we can protect the deposit and the settlement at the same time.

See if you qualify →