How to Use Equity in Your Home or Business to Grow Your Wealth
Got Equity Tied Up in Your Home or Business? Here’s How to Make It Work Harder for You
When we talk about equity, we mean the difference between what you own and what you owe.
And here’s the exciting part, you might have more equity than you realise!
In property (residential or commercial), equity is the property's current market value minus any lending secured against it.
In business, equity is your assets minus your liabilities.
If you’ve built up equity, you could potentially leverage it to:
Invest in property and grow your wealth
Expand or strengthen your business
Fund new investment opportunities
But before you get too excited, keep in mind: not all equity is usable. Banks and lenders usually require a buffer:
Owner-occupied property: Retain 20%
Rental property: Retain 30%
Commercial property: Retain 35–40%
Business equity: Retain 30–40%
Equipment equity: Retain 20–30%
How to Use Property Equity or Business Equity
Using Property Equity
If you have usable equity in your home or investment property, you could:
Buy a rental property, commercial property, or business
Renovate or upgrade your existing property
Consolidate debt onto better terms or lower interest rates
Inject capital into your business to fund growth
Using Business Equity
If your business has strong equity, you could:
Restructure debt to free up cash flow
Fund 100% of a commercial property purchase for your business
Fund 100% of a business purchase using business and/or personal assets
Support a business succession plan or exit strategy
Real-Life Examples of Unlocking Equity
Here’s how clients are using equity right now with our help at Vesta Finance:
Purchasing commercial property for their business, using 100% bank funding through equity and business cash flow.
Releasing equity from residential property to inject funds into a growing business.
Buying an established business, fully funded by leveraging owner-occupied property equity and proven business cash flow.
Frequently Asked Questions About Using Equity
What is usable equity?
Usable equity is the portion of your total equity that lenders allow you to access after accounting for their required buffer (e.g., 20% for a home, 30% for a rental or 40% for a business).
How can I calculate my usable equity?
The basic formula is:
(Current market value × 80% for owner occupied homes) – Current loan balance = Usable equity
Different rules apply depending on the type of asset, homes, rentals, commercial property, and businesses each have different lender criteria.
Can I use home equity to buy a business?
Yes, you can! Many lenders allow you to leverage your home equity to fund a business purchase, provided you have a strong business case and solid cash flow forecasts.
Is it risky to use equity to invest?
Using equity can be a smart move, but like all investments, it comes with risks. It’s important to structure lending carefully, understand repayments, and have a plan for different market conditions.
How do I know if now is the right time?
If you have strong equity and clear investment or business goals, it could be a good time. A discovery call with an adviser (like us!) can help you assess your situation and plan the best path forward.
Why Unlocking Equity is a Smart Strategy
Whether you're planning for growth, creating passive income streams, or building long-term wealth, unlocking your equity can fast-track your goals.
The key is doing it strategically, ensuring the numbers stack up, risks are managed, and the structure fits your overall financial plan.
That’s exactly where we come in.
At Vesta Finance & Advisory, we specialise in helping professionals and business owners unlock hidden potential and build long-term wealth through smart lending strategies.
If you’re wondering how to use your home equity or business equity to create more wealth, improve cash flow, or grow your business, we’re here to help.
Not sure what’s best for your situation? Contact us at Vesta Finance & Advisory.
We’re here to help you navigate your financial options and ensure you’re making the best choice for your future!
A reminder, the above information is generic in nature and not personalised financial advice. If you would like to discuss the details of your own situation, please contact our team directly.