Finance for the buildings business runs on.
A commercial property loan is secured by a building that businesses use: an office, a shopfront, a warehouse, a factory or a mixed-use site. It can fund a purchase, refinance an existing facility, or release equity sitting in a property you already own.
Owner-occupiers use it to buy the premises their business runs from. Investors use it to buy, hold and reposition income-producing property. When a bank's timeline, policy or appetite doesn't match the deal, a private commercial property lender is often the one that does.
We work with private and non-bank lenders who specialise in commercial property loans, and we stay across what they're funding right now. If your scenario fits, we can connect you with the lenders it suits.
A house is valued by comparison with the one next door. A commercial property is valued mostly by what it earns.
Valuers typically take the net income from the leases and apply a capitalisation rate: the return the market expects from that kind of asset in that location. Divide the income by the rate and you have a value. It sounds mechanical, but the consequence is anything but. Change the lease and you change the value. A building let long-term to a strong tenant and the same building sitting empty are, to a lender, two different assets.
That's why commercial lenders spend as much time on the tenant as on the bricks. In commercial property, the lease is part of the security.
Purchase funds the acquisition of an office, retail, industrial or mixed-use property. Commercial property refinance replaces an existing facility, often one that's expiring, being called in, or no longer fits the plan. Equity release borrows against a property you own to fund the business, another purchase or a project.
The loan-to-value ratio sets the ceiling. After that, a commercial lender reads the leases: who the tenants are, how long the leases have to run, and whether the rent covers the interest with room to spare. Lease length is often measured as a weighted average across all tenants, known as the WALE. A short WALE on a property whose debt is due soon is the kind of timing a lender will want explained.
Then the property itself: its location, condition, zoning and how readily it would sell. A specialised building with one likely user is harder to lend on than a standard warehouse any business could occupy. The question isn't only what the property is worth today. It's what it would be worth to the next buyer.
And, as with any private loan, the exit: how the loan will be repaid or refinanced when the term ends.
Private commercial property loans are priced above bank lending, and the difference pays for things a bank won't give you: a lender that can work to a settlement date, appetite for a vacant or part-leased building, or a structure outside standard policy. Pricing follows the risk the lender carries: the loan-to-value ratio, the quality of the income, the property type and the strength of the exit. There are usually establishment fees, and interest may be paid monthly, prepaid or capitalised.
Getting indicative terms costs you nothing, and any fees are agreed with you up front, before any work starts.
This page is general information only. It isn't financial, credit or legal advice and doesn't take into account your particular circumstances. Lending decisions are made by the lender.
Pocket compass, 19th century Taking a bearing before setting out.
Across our lender network, commercial property loans go up to $250m. How much a lender will advance depends on the property's value, the quality of its income and the resulting loan-to-value ratio.
Often, yes. Private and non-bank lenders will look at vacant and part-leased property when the plan to lease or sell it is credible. Expect a lower loan-to-value ratio than on a fully leased building, because the income that supports the value isn't there yet.
Often, yes. A private lender can refinance an expiring or called-in facility, either as a longer-term solution or to buy time for the next step. Every lender has its own criteria, and the lender makes the credit decision.
Details of the property, the current leases and rent, what's owed against it, and how the loan will be repaid or refinanced. For owner-occupiers, the business's financial position matters too.
Office, retail, industrial and mixed-use property are the most common. Specialised properties can be funded too, though lenders look harder at how readily they would sell.
It depends on the lender, the valuation and how complete the information is. Private lenders are often chosen because they can work to a settlement date, and the earlier we hear about it, the more options there are.
No. Owner-occupiers use them to buy or refinance the premises their business runs from, and investors use them to buy, hold and reposition income-producing property. Either way, the loan must be for business or investment purposes.
