Quick answer
Yes, in most irrigation states a water share or water access licence can be mortgaged, and the mortgage is recorded on the state's water register rather than the land title or the PPSR. In practice, mainly banks and agribusiness lenders take water as security, usually alongside land. If they won't, the land, a home, machinery or the farm's turnover can stand behind the loan instead.
Key points
- A water entitlement is an ongoing share of a water resource; an allocation is this season's volume. Lenders take security over the entitlement, not the allocation.
- Security over water is recorded on each state's water register, so a PPSR search or a land title search will not show it.
- High-reliability water is generally easier to lend against than low-reliability water.
- Fewer lenders accept water than accept land, and many want it bundled with the farm.
- If water won't carry the loan, a home or other property, machinery, contracts or turnover can stand behind it.
Yes, you can usually borrow against water entitlements. In the main irrigation states a water share or water access licence can be mortgaged, and the lender’s interest is recorded on the state water register, not on the land title or the PPSR. The catch is the lender pool: mostly banks and agribusiness lenders take water, and most want it bundled with the farm. When they won’t, other assets can carry the loan.
That’s the short answer. The rest of this guide follows the water from the register to the credit desk, and then looks at the detours when water alone won’t get you there.
What exactly are you offering when you offer water?
Start with the difference between the two things people call “water”, because a lender treats them very differently.
- The entitlement. Victoria’s Water Register describes a water share as “an ongoing entitlement to a share of the water available in your water system”. South Australia calls its version a water access entitlement. In New South Wales it’s a water access licence. Each is a long-lived right with its own record. This is the asset.
- The allocation. Each season the resource manager announces how much water each entitlement actually gets, as a percentage. A 100 ML share at 50% allocation gives you 50 ML to use or trade this year. South Australia’s guidance frames the allocation as the right to a volume for a single water year, 1 July to 30 June. This is the income the asset produces.
A lender secures the entitlement. The allocation matters to the lender too, but as evidence of what the asset is worth and what the farm can grow, not as something it can hold.
In the irrigation states, water rights have been “unbundled” from land. In Victoria you can buy and sell a water share separately from land, and you don’t need to own land to hold one. That separation is what makes water a distinct piece of security, and also what makes some lenders wary of it.
Where does a lender’s claim over water sit?
Not where most owners expect. Water rights sit outside the land titles system, and a PPSR search won’t show them either. Each state runs its own water register, and that’s where a mortgage is recorded.
| State | What you hold | Where security is recorded |
|---|---|---|
| Victoria | Water share | Victorian Water Register (the Water Registrar) |
| New South Wales | Water access licence | Water Access Licence Register, kept under the Water Management Act 2000 |
| South Australia | Water access entitlement on a water licence | The state Water Register |
Victoria’s Water Register says a water share is a separate asset that can be mortgaged in much the same way as land. Its current fee schedule lists recording a mortgage of a water share at $75.30 and a copy of the share’s record at $17.30 (fees are indexed each 1 July, so check the fees page before you lodge anything).
South Australia sets out the features of a recorded security interest plainly on its entitlements and allocations page:
- The lender gets a power of sale if you default.
- Certain dealings need the lender’s consent.
- The interest survives a transfer unless it’s discharged first.
- Priority follows the order of lodgement.
- It expires 15 years after registration unless extended or discharged.
That last point is worth flagging for anyone with an old facility. A security interest that quietly runs out is a housekeeping job for the lender, but it shows up when you refinance.
If you’ve read our guide to the PPSR and business funding, the logic is the same: a public register, first in generally ranks first, and a clean record speeds everything up. The register is simply a different one.
What does a lender look at before lending against water?
Strip it back to the recurring question: what stands behind this loan, and could the lender turn it into cash if it had to? For water, that breaks into five checks.
- Reliability class. In Victoria, allocations are made to high-reliability shares before low-reliability ones. High-reliability water delivers in more seasons, so a lender can value it with more confidence. Low-reliability water may deliver little in a dry run of years.
- The water system and trading zone. Where the water can be traded affects how many buyers exist for it. A deep market is easier to value and to sell into.
- The record itself. Who’s on the record, whether there are existing mortgages or limited term transfers, and whether the share is linked to the land, the delivery share and the water-use licence that let you actually use it.
- How the water earns. The entitlement produces a return only when water is used on a crop, leased or traded. A lender will ask how this water pays its way in your business.
- Valuation. Many lenders want a recent valuation or a market reference for the specific water. Expect a more conservative lending figure than you’d see against a house.
None of this is a reason not to try. It’s the reason the conversation with a lender who doesn’t do water often ends quickly, and the conversation with one who does goes into detail.
Want a second opinion on what your assets can carry? Start a short enquiry and a real person will look at the whole picture, water included.
Why do some lenders say no to water?
Most non-bank lenders in Australia lend against residential and commercial property, equipment, debtors or turnover. Water is a specialist asset with its own register, its own market and its own price swings. A lender that doesn’t hold water regularly would need to learn the register, track the market and be ready to sell water in a downturn. Many simply choose not to.
Banks and agribusiness lenders do take water, but they usually want it inside a farm package: land, water, delivery rights and machinery under one set of security. That’s tidy for them. It also means that once your bank holds the lot, a second lender has little left to stand behind.
That’s where people get stuck. A no on water isn’t a no on the business. It’s a sign to look at what else is on the balance sheet.
If water won’t carry the loan, what else can?
Here’s the map. Each route asks a different asset to stand behind the money.
| What you hold | Route | Trade-off |
|---|---|---|
| A home, investment or commercial property without the farm’s bank on it | Property-secured loan, first or second mortgage, typically $20,000 to $5,000,000 | Puts a property on the line; leaves the farm security alone |
| Pumps, pivots, tractors, headers | Equipment and vehicle finance secured on the machine | Only funds the asset itself |
| Steady sales and bank statements | Cash-flow or line-of-credit funding, typically $5,000 to $500,000, sized on turnover | Needs regular deposits; seasonal farms must show the full cycle |
| A signed supply contract with a processor or packer | Funding against contracts and purchase orders | Tied to delivering that contract |
| Water you can spare this season | Sell allocation or lease the share | Not borrowing at all; you give up the water for that period |
Two of these deserve a closer look, because they keep the water and the farm out of the new deal.
A property that isn’t part of the farm. If you own a house in town, an investment unit or a commercial building, it may support a first or second mortgage for a business purpose without touching the bank’s farm security. That keeps the farm package intact.
Trading water instead of borrowing against it. In Victoria, future allocations keep going to the share owner until a transfer or limited term transfer is recorded. Selling allocation you won’t use, or leasing the share for a fixed term, turns water into cash without adding debt. If the water is already mortgaged, check your loan terms for consent before you trade.
Sale and leaseback logic can apply too: some irrigators sell an entitlement to an investor and lease the water back. It frees capital but swaps an asset for an ongoing lease cost, and it’s permanent. Our page on sale and leaseback walks through the general trade-offs.
Illustrative example: a pump station, a full bank and a house in town
Illustrative only. Not a real client.
A horticulture grower in northern Victoria needs about $180k to replace an ageing pump station and upgrade drip lines before summer. The bank already holds a mortgage over the land and the high-reliability water shares, and it has said no to an increase this season after a soft harvest.
Mapping what the business holds:
- Water shares: already mortgaged to the bank, first in line on the water register.
- Land: same.
- New pump and drip gear: the gear itself can be financed, but only part of the job is equipment.
- A rental house in a nearby town: owned outright.
- Processor contract: signed for next season’s crop.
One sensible structure: equipment finance on the new pump, secured on the pump, and a modest first-mortgage loan secured over the rental house for the installation and drip upgrade. The bank’s farm security is untouched, nothing new is recorded on the water register, and the repayments are planned around the processor’s payment dates. Whether that’s right depends on the numbers, but the route exists because the owner looked beyond the water.
Laying two facilities side by side is covered in our guide to combining funding routes without clashing.
What should you gather before you ask?
- A copy of the record for each water share or licence, showing reliability, volume, system and any recorded interests.
- The last two or three seasons of allocation and any trading or lease income.
- A list of who holds security over what: water, land, machinery, other property.
- Recent BAS and business bank statements covering a full season.
- Any processor, packer or supply contracts.
- A rough valuation or recent market reference for the water.
Having the water record to hand is the step most owners skip. It answers half a lender’s questions in one page.
Water is an asset. Let’s see what your whole balance sheet can do
Irrigators are asset-rich and cash-patchy by nature. The water sits on a register, the land sits with the bank, and the bills arrive before the harvest. We work with farm and regional businesses all the time, and we start with what you already hold, not with a product we’d like to sell.
Enquiring takes about 60 seconds and there’s no credit check when you first enquire. We don’t spray your details across a pile of lenders, so your phone won’t start ringing off the hook. A real person reads your answers, thinks about your water, land and other assets as a whole, and calls you to talk it through.
Please fill the form in accurately, especially what you own and who already holds security over it. Accurate answers let us match you with the right route the first time.
Frequently asked questions
Can I get a business loan secured only by water shares?
Sometimes, but the field is narrow. Water held without land is accepted by a smaller group of specialist and agribusiness lenders, and they tend to lend a lower share of its value than they would against land. Most lenders prefer water mortgaged together with the farm it serves.
Where is a mortgage over water recorded?
On the state's water register. In Victoria the Water Registrar records mortgages over water shares; in South Australia security interests are recorded against the water licence or entitlement on the Water Register; in New South Wales mortgages over water access licences are registered on the Water Access Licence Register. It is separate from the land title.
Can a lender take security over this year's water allocation?
Generally no. South Australia's guidance, for example, says security interests cannot be recorded against a water allocation. Lenders secure the ongoing entitlement, while the allocation is treated as seasonal income or a tradeable product.
Do I need the lender's consent to sell or lease my water if it's mortgaged?
Usually, for permanent dealings. South Australia lists lender consent for certain dealings as a feature of a recorded security interest, and your loan documents may require consent for leases or limited term transfers too. Ask before you trade, not after.
Does high or low reliability make a difference to a lender?
Yes. In Victoria, allocations go to high-reliability water shares before low-reliability shares, so high-reliability water delivers more consistently and is generally valued more confidently as security.
What if my bank already holds the water and the land?
Then a second lender usually looks at other assets: a home or investment property, machinery, contracts with a processor, or the business's turnover. You can tick what you hold in our funding finder to see which routes fit.