Equity Release & Succession Refinance
Take money out without selling up.
When the freehold is paid down and the business still trades, a refinance releases the capital you need and leaves the asset, and the income, with you. It is how owners of motels, caravan parks and pubs fund retirement, settle an estate, or buy out a partner, without selling.
Commercial, business-purpose finance, structured around the going concern, not a sale.
What equity release actually is.
You draw capital out of a business you keep. Same idea, three reasons people do it.
Asset-rich and super-poor after years in the business. A refinance frees a lump sum to clear the home and de-risk, while the income keeps coming. You slow down without selling.
No. And it is not the home-loan product you have read about.
Most of what comes up under "equity release" is a residential product that shares the name.
The confusion
Reverse mortgage & Home Equity Access Scheme
Residential products secured against your home, for personal use, assessed under consumer credit law. Built for retirees drawing on the family home.
The reality
Business-purpose refinance against the going concern
A release from a going-concern motel, park or pub is commercial lending secured against the business asset. Different security, different borrower, completely normal.
So "equity release" in the headlines usually means a home product, not a business refinance. Confirm your own structure with your accountant.
How the numbers stack up.
The release is set against a going concern valuation, not what you paid, and not what is left owing.
Freehold going concern motels and parks are typically financed at around 60% to 70% of valuation. Leasehold is financed against the lease, with the term capped inside it. A commercial property loan is the usual vehicle. Market-standard ranges, not an offer.
Your age is not the barrier it would be on a home loan.
The age limit that blocks retirees from home loans is a consumer-credit rule. It does not apply the same way to business lending.
On a home loan
The retirement-age test
Residential lending must check you can repay before retirement without hardship. If you cannot, the loan can be refused. Age is used against you.
On a business loan
Assessed on the asset
Business-purpose lending is assessed on the asset and its trading income, not your age. Where the borrower is a company or trust, it generally sits outside consumer credit entirely.
Being outside the retirement-age test does not remove the lender's own judgement. A commercial lender still assesses the asset, the income and the security, wants guarantees, and will reasonably ask how the business keeps running if you step back. A simple management plan answers that, and it is part of presenting the deal well.
Refinance and keep it, or sell part of it.
Two routes to the same outcome. One is debt, one brings in a partner, and the line between them matters.
Refinance and keep it
You keep 100% and release capital against the asset. The cleanest route, and the one I arrange end to end.
Sell part of it
A new entrant buys a share of the operating entity or trust, releasing capital and reducing your exposure, without a full exit.
Arranging the secured credit, the refinance and any debt inside the structure, is what I do as a credit representative. Offering or promoting an equity interest in a unit trust or co-ownership is dealing in a financial product and sits behind an AFSL, so a licensed partner handles that side. Partial sale and succession, explained.
How it is documented.
Documents are your solicitor's and accountant's work. We arrange the facility and structure the release around it.
Why owners use it here.
Three reasons stack up. Tap each.
The business was the retirement plan, so the wealth is in the park or motel, not in super. A refinance turns some of that into cash without giving up the income.
Releasing equity, or covering a timing gap?
Structural
Equity release & refinance
When you want to draw capital from a business you are keeping, that is a refinance against the going concern, secured over the asset.
Timing
Private lending or caveat
When money only needs to move for a short, defined window, a probate or a settlement on a clock, that is short-term secured lending: private lending or a caveat loan, then refinanced out.
Equity release, answered.
Yes. That is exactly what a succession refinance does. It releases capital while you keep the asset and the income, because it is business-purpose lending assessed on the going concern, not on whether you are still working.
No. A reverse mortgage and the Home Equity Access Scheme are residential products against your home, under consumer credit law. A succession refinance is commercial lending against the business asset. Different security, different rules.
Age is far less of a barrier than on a home loan. The retirement-age serviceability test that blocks home loans does not apply to business-purpose lending, which is assessed on the asset and its income. A lender still runs its own credit assessment.
As a market-standard range, freehold going concern motels and parks are typically financed at around 60% to 70% of a going concern valuation, with supporting security able to lift that. The exact figure depends on the asset, the trade and the valuation.
Releasing equity through a refinance is borrowing, not a sale, so it does not itself trigger a capital gains event the way selling would. Tax depends on your circumstances, so your accountant should confirm it.
Yes, and it is one of the most common reasons owners do it. A refinance releases cash so the child running the business keeps it and the others receive their fair share now, settling the estate while you are alive.
A refinance against the business can pay the departing owner in full, which is cleaner than installments. An independent valuation sets a fair price. Tax depends on how the business is held, so involve your accountant and solicitor early.
Yes. Most accommodation businesses are held in a company or trust, and that is normal for this lending. Where the borrower is a company or trust, the loan generally sits outside consumer credit as business-purpose lending.
Deciding what happens to a business you built?
Retiring, settling an estate, or buying out a partner, we can show you how a release could be funded and what you could draw, without selling.
By Nick Lim, founder of Switchboard Finance. Credit Representative 576702 under ACL 384704 (Finsure). General information, not credit, legal or tax advice.