Finance for backyard units
Backyard unit finance
A second home on the lot, built in the factory.
Woolong Capital finances factory-built backyard units, the small second dwellings often called granny flats, for companies that own the unit and rent it to tenants. Your company puts in 20% of the contract price, Woolong pays the builder in 5 certified stages, and repayments of principal and interest run for up to 10 years from handover.
At a glance
Proposed terms, indicative and subject to credit assessment.
Who borrows
An Australian company, or a super fund's company trustee, that owns the unit and rents it to tenants
The site
Land your company owns, or a lease or licence of the backyard site for at least the loan term, with a site deed
Your equity
20% of the contract price or more, paid before the first draw
Loan size
70% of the security or less
The build
Up to 6 months in 5 certified draws, with interest added to the facility
Repayments
Monthly principal and interest for up to 10 years from handover
How a backyard unit is funded
The unit is built in your builder's factory while the backyard is prepared. Each of the 5 stages is certified by an independent quantity surveyor before Woolong pays your builder, and title to the stage passes to your company the same day.
On a leased or licensed backyard site, the unit is set on screw piles with plug-in services and nothing cast in, so it stays movable. On land your company owns, the land and the finished unit are valued together and Woolong takes a mortgage over the land.
When the lot belongs to someone else
Many backyard units sit on a lot owned by someone other than the borrowing company, often a director. Your company can lease or license the backyard site for at least the loan term, with a site deed signed by the landowner and any mortgagee, so the unit stays your company's property and stays removable.
The unit then counts at its re-sited value, what it would sell for in its next home after the cost of moving it, alongside equity in a property a director owns. The loan stays at 70% of the security or less. Every facility carries the same 5 pieces of security, all in place before the first draw. They are listed with the full terms.
Check the planning rules first
Each state and council sets its own rules for second dwellings, including size limits and whether a permit is needed. Confirm what your lot allows before you sign a build contract, and send us the approval with your application.
Questions people ask
Can I finance a granny flat for my family to live in?
No. Modular Build Finance is for companies that own the unit and rent it out as an investment. It doesn't fund personal or household use.
Does the unit have to be movable?
On a leased or licensed backyard site, yes: screw piles, plug-in services and nothing cast in. On land your company owns, the land and the unit are valued together and Woolong takes a mortgage over the land.
Who builds the unit?
A modular builder on Woolong's panel, or another builder once Woolong approves them. The builder is paid direct for each certified stage.
Room out the back?
Send us the lot details and your builder's plans, and we'll shape a facility around your unit.