What Changes on 1 July and How to Fund Your Next Move
Business Finance Reset for 1 July | Switchboard Finance
Business Owners
Business Finance · New Financial Year · 1 July Reset
What Changes on 1 July and How to Fund Your Next Move
Every new financial year quietly resets how lenders read your business, and a handful of policy changes land at the same time. The smart play is not to chase a product, but to match your next move to the right kind of finance. This map shows which tool clears which first move, and when property-backed or cashflow-backed funding makes more sense.
Quick Answer
The new financial year resets how lenders read your business, so the smartest funding move depends on what you are trying to do next. Match the move to the tool: property-backed equity release for expansion, or cashflow-backed working capital when you would rather keep the house out of it.
The new financial year resets your borrowing position
When the financial year ticks over, your borrowing position effectively resets. Lenders start reading a fresh set of figures, and that post-EOFY borrowing read is what shapes your options for the year ahead. From 1 July a few changes also land that directly affect how you fund growth.
The instant asset write-off is now law for eligible assets first used by 30 June, and the 2026-27 Budget has announced making the 20,000 dollar write-off a permanent feature for small businesses, though that extension is not yet legislated. Payday Super also commences, so superannuation has to reach an employee fund within 7 business days of payday, which tightens the timing of your wages cash. In practice, the owners who get ahead treat 1 July as a planning line, not a paperwork date, and line up funding before the figures change.
The first fork: property-backed vs cashflow-backed finance
Before you choose a product, you choose a side, property-backed vs cashflow-backed finance. Property-backed funding releases equity you already hold, usually by sitting a second loan behind your first mortgage, which can be powerful when you have built up equity and want larger, longer-term capital. Cashflow-backed funding does the opposite, advancing money against your trading and receivables with no charge over real estate, which keeps the family home out of the deal.
More owners are leaning cashflow-backed than they used to, partly to avoid tying every move to the house. If you are still mapping the basics, our guide to what a business loan actually is is a useful starting point. The numbers below show how large, and how non-bank friendly, the small business base has become.
If your next move is property-backed expansion, look at a second mortgage
If your next move is expansion you can secure against property, a second mortgage is usually the cleanest tool. It releases equity from a property you already own by registering a further loan behind your first mortgage, with the first mortgagee consent. That gives you sizeable capital for the new financial year reset without refinancing the whole facility or disturbing a low first-mortgage rate.
In practice, this is where owners with real equity and a clear growth plan get the most leverage, so it is worth reading how a second mortgage actually works before you commit. It suits a fit-out, a new site, or a larger one-off investment that pays back over years rather than weeks.
If your next move is one time-critical payment, look at a caveat loan
If the move is a single, time-critical payment with a clear way out, a caveat loan can cover the gap. It secures against your property title for a short period, releases funds quickly, and is repaid when the planned event lands, such as a stock sale or an incoming customer payment.
Because it is fast and short, a caveat loan suits deadlines rather than long-term funding, and it works best when the exit is genuine and dated. It is not a substitute for ongoing cashflow finance, so it pays to understand what a caveat loan costs before you use one.
If your next move needs ongoing cash without the house, look at working capital or invoice finance
If the move needs ongoing cash and you would rather not lean on real estate, cashflow-backed finance fits. A working capital loan gives you a lump sum repaid over a set term, and you can compare secured against unsecured working capital before deciding. Invoice finance instead advances money against your unpaid invoices, so funding rises as your sales do.
Neither has to be secured against your home, which keeps personal property out of the business decision. In practice, this is where owners protect their borrowing capacity for a future home or investment purchase, rather than spending their equity early. The deeper mechanics of working capital and invoice finance are worth a read once you have narrowed the choice.
Your 1 July funding reset, in order
The new financial year reset is a chance to fund your next move deliberately instead of reactively. Decide first whether the move is property-backed or cashflow-backed, then match it to the tool: a second mortgage for equity-led expansion, a caveat loan for a dated one-off, and working capital or invoice finance when you would rather keep the house out of it. The business owners finance hub pulls these together, and the right sequence depends on what you want to borrow next year, not just this one.
Key takeaway: match your next move to property-backed or cashflow-backed finance before you pick a product, and speak to a broker before 30 June to set it up.Frequently Asked Questions
At the start of a new financial year, your business borrowing position effectively resets, because lenders begin assessing a fresh year of figures and a set of 1 July policy changes takes effect. The instant asset write-off settings and Payday Super both land at this point, which can change the timing of your equipment and wages cash. Mapping your plans against the business owners finance hub early helps you act before the numbers shift.
Whether you fund your next move with property or with cashflow depends on what the move is and how much of your home equity you want to keep in reserve. Property-backed options release equity you already hold, while cashflow-backed options advance money against your trading without touching real estate. As a rule, equity-led moves suit expansion, and trading-led moves suit smoothing the everyday.
Whether a second mortgage or a working capital loan is better for expansion comes down to whether you hold property equity and how you want to repay. A second mortgage releases equity for larger, longer-term capital, while a working capital loan gives you a flexible lump sum without a charge over your property. Many owners use the second mortgage for the big fit-out and working capital for the running costs around it.
You can fund business growth without using the family home as security by leaning on cashflow-backed finance such as invoice finance or an unsecured working capital facility. These advance money against your sales and receivables rather than your property, which leaves your home borrowing power intact. That can matter later if you are planning a one doc home loan or another personal purchase.
The best time to speak to a broker about new financial year finance is before 30 June, while you can still line up a facility and act on the 1 July changes rather than scrambling afterward. Getting the structure right early protects your cashflow and your borrowing capacity for the year ahead. A short conversation now is usually cheaper than a rushed decision in July.
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