Heath McKean, 34, of Ascot, faced Bendigo Magistrates Court on charges of drug trafficking, possession of firearms and possession of proceeds of crime.

He was charged after police raids on his Ascot home and a California Gully mechanic business on Thursday.

The court heard police found eight zip lock bags of speed weighing 6.23 grams, 26 ecstasy tablets and $6415 cash in a carry bag in McKean's office.

A loaded handgun was also found in a laundry basket near his desk, along with a magazine of ammunition and a zip lock bag of ammunition suitable for the handgun.

Police found a silver handgun under a bookshelf in the garage of McKean's Ascot home.

His car contained 112 grams of ecstasy behind the central console, a round of ammunition in the foot well, a further 15 grams of ecstasy in the rear of the car and a zip lock bag of ammunition in a rear cavity.

First Constable Tracey O'Donnell opposed bail, telling the court McKean had displayed erratic and unstable behaviour.

"Police hold fears for the community, his associates and himself due to the fact he has access to firearms and that they are stored in such a dangerous manner within close proximity to himself," she said.

The defence council argued bail should be granted as McKean had co-operated with police and continued close supervision of McKean by police would decrease any public threat. 

McKean's parents provided character statements to the court.

Magistrate Jennifer Tregent said it was clear McKean had 'a little empire going' and keeping a loaded firearm near his desk posed a risk to customers, staff and the public.

"It was clear what that gun was there for - it was there in case a deal went wrong," she said.

Magistrate Tregent said McKean had yet to have the benefit of a corrections order.

McKean was granted bail under strict conditions that he reside at a Strathdale home with a curfew from 10pm to 6am, undertake weekly drug tests and report daily to Bendigo Police Station.

He will reappear at the Bendigo Magistrates Court on January 19.