Direct answer
A commercial property loan funds the purchase, refinance or investment acquisition of income-producing office, industrial, retail or mixed-use property. In Australia it is secured by a first mortgage over the commercial property, runs from one year through to longer bank terms, and is arranged through banks, private lenders and specialist funds depending on the property, the borrower's structure and the timeframe involved.
Who uses it and why
Commercial property loans sit at the core of business-purpose property lending: an investor buying an industrial warehouse for its rental yield, an owner-occupier purchasing the premises their business trades from instead of continuing to lease, or an established property investor refinancing a portfolio to release equity or secure a better rate. Unlike a residential mortgage, the lender's assessment is built around the property's income and tenancy profile as much as the borrower's own financial position, since a well-let commercial asset carries much of its own servicing capacity.
The category spans a wide range of asset types and borrower profiles — a single-tenant industrial facility, a multi-tenant office building, a retail strip shop, or a mixed-use asset combining several uses — and the right lender for each varies with the asset's quality, tenancy strength and the borrower's own structure. Typical borrowers are property investors building a commercial portfolio, owner-occupiers purchasing their own business premises, and borrowers refinancing an existing commercial facility to improve terms or release equity for further investment.
Industrial, office and retail assets each carry a different risk lens: industrial is generally assessed on tenant covenant and lease length given typically longer-term leases; office on tenant mix, building grade and location within a precinct; and retail on foot traffic, trading history of the tenant, and exposure to a single anchor tenant versus a diversified tenancy schedule. None of this changes the underlying mechanics of the loan, but it does shape which lenders are genuinely active for a given asset type, which is where an intermediary with current panel relationships adds the most value.
What lenders look at
The property itself is assessed on its type, location, condition and, critically, its tenancy: lease terms, tenant covenant strength, vacancy risk and the weighted average lease expiry all shape how a lender views the income the asset generates. Loan-to-value ratios typically extend to 65–75%, informed by asset quality and tenancy strength as much as by the borrower's own position.
Banks generally offer the sharpest pricing and longest terms for well-tenanted, mainstream commercial property with a strong borrower covenant, and will want full financial disclosure and, often, an owner-occupier or long-term investment intent. Private lenders and specialist funds come into their own for properties or borrowers that fall outside a bank's standard box — a vacant or partially let asset, a specialised property type, a shorter-term hold, or a borrower needing alt-doc or low-doc assessment — and can generally move faster, though typically at a higher rate reflecting the additional flexibility and risk involved.
Serviceability is assessed on the property's net rental income relative to the loan, on the borrower's broader financial position where the property is owner-occupied or vacancy is a live risk, or on a blend of both. Entity structure — company, trust, or an SMSF where applicable — is confirmed early since it shapes both the lender panel and the facility structure. Credit history carries a reasonable tolerance: minor, explained defaults are generally accommodated across the panel, particularly where the property and tenancy profile are otherwise strong.
Typical terms
|
|
| Size |
$500,000 to $100m+, subject to lender assessment |
| LVR |
Typically up to 65–75% |
| Term |
One to five years with private lenders and specialist funds, longer with banks |
| Speed |
Indicative approval in 14–56 business days from a complete application |
| Security |
First mortgage over the commercial property |
| Pricing |
Priced on risk and security; indicative range on enquiry |
Structures we see most
Owner-occupier purchase. Funds a business buying the premises it trades from, generally supporting strong terms given the borrower's direct interest in the property's stability and often paired with the operating business's own financials in the assessment.
Investment purchase. Funds an income-producing commercial property bought for its rental yield and capital growth potential, assessed primarily on the tenancy profile and the property's income relative to the loan.
Refinance and equity release. Moves an existing commercial facility to better terms, or releases equity from an appreciated or now unencumbered property for further investment or business purposes.
Vacant or transitional asset finance. Funds a property with above-average vacancy or a tenancy in transition, typically placed with private lenders or specialist funds comfortable underwriting that additional leasing risk until the asset stabilises.
Portfolio facility. A single loan structured across multiple commercial properties held by the same borrower or entity, used to simplify administration and, in some cases, to achieve better overall terms than financing each property separately.
Development exit facility. Takes out a construction loan once a commercial project has completed and reached stabilised occupancy, converting a construction facility into standing, longer-term commercial property debt.
Costs and how we're paid
Pricing on commercial property loans reflects the asset quality, tenancy strength, loan-to-value ratio and lender type, and is quoted on enquiry once a lender has reviewed the file — no flat rate applies across the product. Facilities may carry an establishment fee and ongoing line or account fees; all costs are set out in the loan offer before a borrower commits.
Solara is remunerated by the lender, the borrower, or both, depending on structure, which may include a commission from the lender and/or a broker fee agreed with the borrower. Any commission or fee is disclosed in writing before an application proceeds.
Because commercial lending spans such a wide range of terms — from a one-year private facility to a long-dated bank mortgage — comparing total cost across offers means looking beyond the headline rate to fees, the term itself, and any conditions attached to renewal or early repayment. A slightly higher rate with genuine flexibility on term and exit can be the better outcome for a borrower planning to sell or refinance within a few years.
Process and timing
- Initial scoping call — typically same day. We confirm the property, its tenancy profile, the purpose of the loan and the borrower's structure.
- Document collection — typically 2–5 business days. Lease and tenancy schedules, title information, entity documents and financials appropriate to the doc level.
- Lender matching and submission — typically 2–5 business days. We place the file with the banks, private lenders and specialist funds whose appetite matches the asset type and borrower profile.
- Approval and offer — typically 7–30 business days, faster with private lenders and specialist funds, longer where a bank is the best fit.
- Documentation and settlement — typically 5–15 business days once terms are accepted and the mortgage is registered.
Frequently asked
What counts as a commercial property loan?
Finance secured against income-producing office, industrial, retail or mixed-use property, for purchase, refinance or investment purposes, as distinct from residential mortgage lending.
Can I get a commercial property loan for a vacant property?
Yes, though vacancy or leasing risk narrows the lender panel and typically results in a more conservative loan-to-value ratio, with private lenders and specialist funds generally the more active part of the panel for these files.
Do I need my business to occupy the property to qualify?
No. Investment purchases, where the property is leased to an unrelated tenant, are a core use of this product and are assessed primarily on the tenancy profile and the property's income rather than requiring owner-occupation.
How is a commercial property loan different from a residential mortgage?
Assessment weighs the property's tenancy and income more heavily, loan-to-value ratios are generally more conservative, and terms and documentation requirements vary more between banks, private lenders and specialist funds than they typically do for residential lending.
What size loans are available for commercial property?
Facilities in this category typically run from $500,000 up to $100m and beyond, subject to the lender's assessment of the asset and the borrower. Larger facilities are placed with lenders whose appetite matches the size and complexity.
Can I refinance an existing commercial property loan?
Yes — refinancing to improve pricing, extend or restructure terms, or release equity for further investment is a common and straightforward use of this product, generally assessed in much the same way as a new purchase.
What documentation do I need?
This varies by lender type: banks generally require full financial disclosure and complete tenancy documentation, while private lenders and specialist funds can often work from alt-doc or low-doc evidence where the property and tenancy profile support it.
How long does approval take?
Indicative approval runs from around two to eight weeks depending on the lender and the complexity of the tenancy and borrower structure, with private lenders and specialist funds generally faster than banks.
Related products
SMSF commercial loans — the better fit where the purchasing entity is a self-managed super fund acquiring business real property under a limited-recourse structure.
Private first mortgages — worth considering directly where the property or borrower's file sits outside a bank's standard commercial lending policy.
Low-doc commercial loans — the closer match where full financial disclosure is not available and the file needs to be assessed on alternative documentation.