Cross-collateralisation is the practice of using one security to support multiple loans, or multiple securities to support a single loan. In Australian private credit and commercial lending, the second form is more common: a single facility secured by two or more properties.
The structural advantage: the lender can underwrite at a portfolio level rather than security-by-security. A borrower with two properties, one at 50% LVR, one at 75%, might be unable to top up against the 75% security alone but can release capital cleanly when both properties are cross-collateralised at a combined 62.5% LVR.
The structural disadvantage: cross-collateralised loans are harder to unwind partially. If the borrower wants to sell one of the cross-securitised properties, the lender's consent is required (because reducing the security pool changes the credit position) and the loan may need to be partially repaid or restructured.
Archer Wealth files are sometimes cross-collateralised on multi-asset commercial portfolios and on borrowers with multiple investment properties. The decision to cross-secure is made at the credit committee, it's a structuring choice, not a default. Single-asset security is simpler when the LVR and exit support it.