Although evolving digital technology has seen many service providers leave the industry, Australia Post still remains a lucrative franchise model.

As Australia’s largest logistics company, there are some lenders that will offer great terms on an Australia Post franchise loan.

By putting forward a strong business, and with a residential property as security, you can borrow at a higher Loan to Value Ratio (LVR) and qualify for a great interest rate.

How much can I borrow?

  • Existing store: Borrow up to 50-70% of total business costs or up to 100% with an existing residential property as security.
  • Loan term: 10 years or as per the franchise agreement.
  • Loan term with the property as security: 25 to 30 years (standard loan term).
  • Interest only: Typically 2 years.
  • Low doc options not available.
  • Discounted interest rates available.

Bear in mind that these are just general guidelines from a few of our lenders.

Like other commercial loans, getting a great deal and borrowing the amount you need for your business is about building a strong case with the right lender.

Call us on 1300 889 743 or complete our free assessment form and discover if you qualify for an Australia Post franchise loan.

How do I qualify?


Do you have at least 3-5 years experience managing a post office or a similar-sized business in a comparable industry?

You’ll have a much better chance of getting approved if you can show that you have these skills under your belt.

Think from a bank’s perspective: why would they approve what is essentially a business loan for someone who doesn’t understand anything about the day-to-day operations of an Australia Post store?

The more work references you can provide, the better!

Franchisee financials

Just like you you should be doing your own due diligence, the bank will typically ask for the last 3 years financials of the current franchisee.

If you’re buying an Australia Post store at a discount because of poor sales or poor management, the bank will want to know specifically about you plan to turn things around.

Is there an interest cover requirement?

Sometimes there is a requirement that a business or franchise generate “so many” times earnings before interest, tax, depreciation and amortization (EBITDA) compared to the amount of interest on the franchise loan per annum.

There is no specific requirement for Australia Post but, in most cases, an acceptable interest cover is 1.75x EBITDA.

Cash flow forecasts and profit projections

Even if you’re buying an existing store, you’ll need to illustrate to the bank how you intend to make money and run a profitable business well into the future.

This shows that you’ll actually be able to meet your mortgage repayments!

Work with your accountant to draft up a business plan showing cash flow forecasts and other financial modelling.

You may even want to provide the bank with your marketing and sales plan if your intention is to turn an existing store around.

Working capital

In most cases, the bank will want to see how much you’re planning to contribute to the business to get it up running.

This is known as “hurt money” and it’s a typical requirement for most business loans.

Should I use my property as security?

You may want to consider it.

In fact, unless you have cash to put towards the purchase, you’ll have to use equity to complete the purchase as banks won’t lend more than 70% of the business value for an Australia Post franchise.

If you have enough equity, you won’t even need to put anything towards the purchase other than your own working capital requirements.

Speak to us about refinancing your mortgage to access equity for an Australia Post franchise loan by completing our free assessment form.

How does an Australia Post franchise work?

Australia Post has been around for over 200 years but its real struggle has only been felt in recent times with the emergence of the interest and digital technology.

Being successful in this franchise will come down to your management and sales skills.

The setup costs

When you buy an Australia Post franchise, you’re actually buying a licence to run what they call a Licensed Post Office (LPO).

As a the licensee, you’re responsible for the fit-out (which will need head office approval), maintenance and the operating costs, including the payment of a point-of-sale technology fee.

The costs will vary depending on location and the size of the store, particularly if you’re from a rural location and planning to buy Community Postal Agent (CPA).

To get a better understanding of the establishment costs, it’s best to request a franchise kit from Australia Post.

What’s a CPA?

Although two-thirds of Australia Post’s national postal network is made up of LPOs, the remainder is made up of CPAs.

CPAs are the Australia Post counters you normally find in newsagents and general stores. You typically only find these types of stores in rural and remote areas although you sometimes find then metro locations.

These types of Australia Post outlets operate on 2-year common agreements with the store owner and offer an over-the-counter delivery service.

If you’re from a rural location and you want to buy an Australia Post CPA, complete our free assessment form to find out if we can get you approved.

There may be postcode restrictions or you may need to provide a bigger deposit or more equity to get approved.

Franchises aren’t available in the top end!

Unfortunately, Australia Post franchise models aren’t available in the Northern Territory.

What should I look for in a store?

The purchase price for a store will vary depending on:

  • Store location: You should expect to pay a premium for stores located in metro and city areas.
  • Premises: Prices will vary depending on whether the store is located in a shopping centre, a retail shop front or within a newsagency.
  • Condition of the store: This relates more to shop fronts which may suffer from structural problems that have not been properly managed and repaired by the landlord. It’s a totally different circumstance to a store located in a shopping centre where centre management would take better care of premises.
  • Number of PO boxes let: This is really something to hang your hat on from a business valuation perspective. Think of it like buying a book of clients.

Revenue estimates

It’s difficult to provide a dollar figure because, like any business, it comes down to the location and size of the store and the business acumen of the store owner.

If you can come to the table with significant experience and solid business plan, you can potentially earn a great income from your franchise business.

Do I have to run the store myself?

Unlike most other franchise systems that require the owner to be hands-on with the business, you’re actually permitted to appoint a manager to run the day-to-day operations.

Although owning an Australia Post franchise isn’t a passive investment, the ability for you to hire someone with job-ready management experience is a huge benefit.

How do I sign up?

The most common way is to buy an existing LPO, although Australia Post does accept expressions of interest from people interested in opening a new store.

You’ll have to negotiate a deal with the existing licensee yourself, who will then notify Australia Post head office of the intent to sell.

Once this happens, the approval process will begin and you’ll generally be asked to provide the following:

  • Your last 7 years employment history including referees.
  • Cash flow projections and a business plan.

Once you submit your information request, an assessment interview will typically be conducted at your relevant state head office.

Initial training will begin at the same head office location once you pass the assessment interview.

The final step is signing the agreement and the business handover period with the departing franchisee.

Altogether, the process from application to settlement takes about 3 months.

Australia Post franchise loan FAQs

Why Australia Post?

What you’re getting with an Australia Post franchise is a nationally-recognised brand.

That has significant value in itself but what you’re also able to do is leverage the resources and buying power of a large corporation.

Specifically, you get:

  • An annually revised fee and commission structure.
  • Management and business systems like point-of-sale.
  • Ongoing support and training.
  • National marketing and advertising reach.
  • A “no term” licence that can be assigned and transferred at any time (on approval).

It’ll cost you a bit to set up the outlet and buy the Australia Post licence than if you were to start your own business.

However, you could potentially save yourself more time and money over the long term by operating under a franchise system.

It’s essential that you get independent financial and legal advice before making a business decision!

Read the fine print!

If you’re interested in owning an Australia Post franchise, request a Uniform Franchise Offering Circular (UFOC).

This is essentially the franchise kit which covers such information as:

  • Litigation.
  • Bankruptcy.
  • Initial franchise cost and ongoing fees.
  • Initial investment.
  • Restrictions on what you can sell.
  • Your obligations as a franchisee.

There are restrictions and responsibilities such as trademarks and patents so you should read the UFOC carefully and even seek out the advice of your solicitor before signing up to anything.

In particular, make it contains an example of the franchise agreement you’re expected to sign.

Don’t lay down any funds unless you know you’ve been pre-approved for an Australia Post franchise loan first.

What services does Australia Post provide?

Basic services and products

  • Mail acceptance and processing.
  • Postage stamps
  • Money orders
  • Bill payment
  • Banking

Additional offerings

  • Mail delivery
  • Philatelic items
  • Packaging products
  • Stationary
  • Gifts
  • Post office boxes

What does the industry look like currently?

It’s fair to say that the entire postal industry is in a state of transition due to an overall decline in mail volume.

This has been an issue since the internet gained traction in the 2000s but Australia Post still remains the industry leader.

Much of this to its focus on being “future ready” since 2010 although, like other service providers in the industry, Australia Post has been slow to evolve.

A few Australian banks and lenders have accredited Australia Post franchises largely due to its continued market dominance but this may well change in the future.

Apply for a loan today

Discover if you qualify for an Australia Post franchise loan!

Call 1300 889 743 or complete our free assessment form to speak with one of our franchise loan specialists!

We can negotiate a great interest rate on your behalf and push to get you the amount your need to make your business dreams a reality.

  • Torreggiani

    What’s “hurt money” and is this a requirement or something optional?

  • Hey there,

    “Hurt money” is basically the amount that planning to contribute to the business to get it up running i.e. working capital. This is a typical requirement for most business loans and banks will want to see just how much you’re contributing to the business yourself.

  • clarke

    I am on a temporary visa and my co-applicant holds an Australian PR. We would like to borrow $250k at 90% LVR to buy a post office near Narra. We are purchasing the business only. We can sell existing house to help if need be. Can your brokers help us?

  • Hi clarke,
    We have a few lenders in mind that may be able to help. Please note that you may need to drop the LVR a bit or offer the existing property as security instead of selling it. Some banks may also require you to have experience in this franchise sector. Please call 1300 889 743 to discuss with an expert franchise loan specialist.

  • scott

    What about a business loan instead of a franchise loan? If I get that instead, how much can I borrow?

  • Hello scott,

    The amount you can borrow with a business loan generally depends on the lender, the loan product and their assessment of your application. Typically, you may be able to borrow anywhere from $250k to $50 million. However, business loans over $5 million to $50 million have stricter lending criteria.

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