Accommodation Finance in FY27: The New-Year Funding Map
Accommodation Finance in FY27 | Switchboard Finance
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Accommodation Finance · FY27 · Funding Map
Accommodation Finance in FY27: The New-Year Funding Map
A new financial year resets the runway for buying an accommodation business. There are three ways in: buy the trade as a going concern, fund the freehold leg, or plan the entry before you commit. This is the FY27 funding map, and where each path fits.
Quick Answer
There are three ways into an accommodation business in the new financial year: buy the trade as a going concern, fund the freehold leg, or plan the entry before you commit. The going-concern read does the work, whichever path fits your position.
There are three ways into FY27
There are three ways into an accommodation business as a new financial year opens, and naming your own is the first move. You can buy the trade as a going concern, you can fund the freehold leg of a venue, or you can plan the entry and structure it before you ever sign. Each one is a different funding map, and the path you are on decides what a lender looks at and what you need to bring.
What ties the three together is the going concern: an accommodation asset is funded on the income it produces and the trade that comes with it, not on the building alone. The going-concern read does the work in all three positions, which is why the same valuation logic shows up whether you are buying a motel, a park or a pub. In practice, the buyers who start FY27 cleanly are the ones who picked their path early and built the file to suit it.
The new-year timing matters too. The small-business measures in the Federal Budget 2026-27, announced, not yet law, sit in the background of an FY27 entry rather than driving it, so they are worth understanding but not worth waiting on. The funding map below is about your position today, on a new-financial-year footing.
If you are buying the trade: fund it as a going concern
If you are buying an operating accommodation business, you fund the trade as a going concern, and the valuation is built on the income and the established custom, not on the bricks in isolation. This is the most common FY27 entry, and it is where vendor finance most often earns its place.
A senior lender funds the bulk of a going-concern purchase, and vendor finance can sit behind that senior loan to close the last part of the price it will not reach, cleared by a refinance over the first years of trading, varies by lender. For a motel or a similar trading asset, that combination is what gets a first purchase across the line without an outsized cash deposit. Our explainer on what going concern actually means walks through how the valuation, the GST treatment and the borrowing line up.
If you are taking the freehold: fund the bricks and the trade as one
If you are taking the freehold of a venue, the senior loan sits on the whole asset, the real estate and the operating business valued together as one going concern, on a commercial property loan. A freehold venue is not two purchases bolted together; it is one asset a lender reads as a single going concern.
For a larger licensed asset like a pub or hotel, the lender lends against the going-concern value of the freehold rather than the land alone, and extra security you already hold can stretch what a lender will advance where the deposit is tight, indicative and varies by lender. In practice, this is the position where the strength of the trade matters most, because a specialised operating asset is financed more conservatively than a standard property, and the income is what carries the loan.
If you are planning the entry: structure it before you offer
If you have not committed to a property yet, FY27 is the year to structure the entry rather than chase a deadline. Planning the entry means deciding between a freehold and a leasehold position, sizing the deposit and any supporting security, and reading the going concern of a target before you make an offer.
This is the quietest of the three paths and often the strongest, because the work happens before the clock starts. Mapping the deposit, the security and the likely valuation early is what turns a rushed purchase into a clean one. The accommodation finance hub sets out how the lanes connect, and once the business is bought, the owner's own home loan is a separate step that reads more cleanly once the new structure has had time to settle.
FY27 does not change what an accommodation asset is worth, but it is a clean moment to choose how you enter. Buy the trade as a going concern, fund the freehold leg of a venue, or plan the entry and structure it first: three positions, one funding map, and the same going-concern read underneath each. Name your path early and the new year does the rest.
Key takeaway: there are three ways into an accommodation business in FY27, and the going-concern read decides what you can borrow on each.Frequently Asked Questions
The best way to finance an accommodation business in FY27 depends on your buyer position rather than a single product. If you are buying an operating business you fund it as a going concern; if you are taking the freehold you use a commercial property loan on the whole asset; if you are still planning, you structure the entry first. The going-concern read sets what you can borrow in all three.
Buying an accommodation business with little money down is sometimes possible, but it depends on the going concern and the security, not on the headline price. A senior loan funds the bulk of the purchase and vendor finance or supporting security can close part of the gap, which keeps the cash deposit smaller. The deposit you actually need is sized on the going-concern valuation and varies by lender.
Going concern means you are buying the operating, trading business as a whole, including the income and the established custom, not just the building and the fittings. For accommodation, the valuation and the loan are both built on that going concern, which is why a lender funds the trade rather than the bricks alone. Our going concern explainer covers how that shapes the valuation, the GST treatment and the borrowing.
The 2026-27 Budget changes form part of the FY27 backdrop, but they are announced measures and not yet legislated, so they shape planning rather than dictate it. For a buyer, the funding still turns on the going concern and the structure of the deal, which is where the real decisions sit. It is worth understanding the measures with your accountant, then funding the purchase on its own merits.
Whether you buy the freehold or the leasehold of an accommodation business changes the loan to value ratio, the term and the deposit, so it is a funding decision as much as a lifestyle one. A freehold going concern is financed as one asset that includes the real estate, while a leasehold entry funds the business and the lease rather than the land. Mapping both against your deposit and your plans is the right first step before you offer.
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