Industrial property loans: borrow against a warehouse or factory

Industrial property is often the most useful asset a business owner has and the least used. The factory or warehouse sits on the balance sheet, quietly gaining value, while the business borrows on expensive unsecured terms or waits weeks for a bank. A private loan secured on that industrial property can unlock it quickly, either as a first mortgage or as a second mortgage behind your existing bank loan.

This page is specifically about industrial security. For shops, offices and commercial property in general, see commercial property first mortgages; if you’re buying a warehouse rather than borrowing against one you own, go to industrial and warehouse purchases.

Can you borrow against an industrial property privately?

Yes. A private lender can take a first mortgage over industrial property you own outright or are refinancing, or a second mortgage or caveat behind an existing bank loan. The decision rests on two things: how much equity the property carries, and how the loan will be repaid.

Industrial loan basics	Detail
What can secure it	Warehouses, factories, workshops, strata units, depots; industrial land case by case
Loan size	From $20k up to $5m
Position on title	First mortgage, second mortgage behind the bank, or a caveat
How long	1 to 24 months on a first mortgage; shorter for a second or caveat
Repayments	None required during the term if interest is prepaid or capitalised
Turnaround	Possible in 24–48 hours with documents in hand; same day possible for $20k–$250k
Inspection report	Not needed: no formal valuation required

What industrial property makes good security?

Not all industrial buildings are equal. The question a lender asks is simple: if the exit failed, how readily could this property be sold or refinanced?

Property type	What tends to help	What to check
Strata industrial unit	Established estates, lots of buyers, simple to assess	Strata levies, by-laws, any special levy
Freestanding warehouse	Truck access, clearance height, yard space, zoning	Building condition, roof, fire services
Factory or workshop	General-purpose layout, three-phase power, parking	Specialised fit-out that only suits one user
Depot or hardstand yard	Location near freight routes	Contamination history, fuel or chemical storage
Cold store or processing plant	Strong if the location is in demand	Narrow buyer pool, refit cost
Zoned industrial land	Serviced lot in an estate	Access, services, planning controls

Two features matter more for industrial than other security. Environmental history: anything that hints at contamination, such as underground tanks or past chemical use, can narrow the buyer pool and complicate a bank refinance. Specialisation: a building designed for one process may be worth a lot to its current owner and much less to the next.

Tenanted or owner-occupied: what changes?

	Tenanted industrial	Owner-occupied industrial
What supports the exit	The lease, rent and tenant quality	The building’s appeal to buyers and banks
Documents	Lease, rent statement, any options	Business details, purpose of the loan
Common exit	Bank refinance or sale to an investor	Bank refinance, sale, or sale and leaseback
What weakens it	Short lease, arrears, break clauses	Highly specialised fit-out

A vacant industrial building, where a tenant has recently left, is its own case; see vacant commercial property loans.

First mortgage or second mortgage behind the bank?

• Private first mortgage when the property is debt-free, when you’re repaying the bank (perhaps because it won’t renew; see bank won’t renew your facility), or when the amount is large relative to the bank loan. The private first mortgage business loans pillar covers terms and exits.
• Second mortgage when the bank loan is worth keeping and you need extra funds on top. See second mortgage on commercial property.
• Caveat loan for small, fast needs; it can later convert to a registered second mortgage.

What do industrial owners use the funds for?

Purpose	Typical exit	Related page
Buying the unit next door or a bigger site	Bank loan over both properties	Buy commercial property fast
Machinery a financier won’t fund	Equipment finance later, or trading cash flow	Equipment and machinery
ATO debt or a director penalty notice	Bank refinance once accounts are lodged	Pay ATO debt with property equity
Large order raw materials	Customer payment	Manufacturing and industrial
Fleet, depot or yard upgrade	Refinance or cash flow	Transport and logistics

What state taxes and settlement points affect an industrial loan?

These don’t change whether you can borrow, but they shape the exit and the numbers.

• Victoria’s commercial and industrial property tax (CIPT). Commenced 1 July 2024. Commercial and industrial land enters the regime on an entry transaction from that date; duty still applies to that entry transaction, and an annual tax on site value starts ten years later. Unpaid CIPT is a first charge on the land. Buyers who used the government’s transition loan for entry duty have a first-ranking statutory charge on the land, which any private lender needs to know about.
• Land tax. In NSW, factories, warehouses and shops are covered. Liability is based on land held at midnight on 31 December, it isn’t pro-rated, and unpaid land tax transfers with the property. Other states have their own regimes.
• Clearance certificates on sale. Since 1 January 2025 there’s no value threshold: unless an Australian resident seller gives the buyer an ATO clearance certificate, the buyer must withhold part of the price. If your exit is a sale, apply early.

How does it work?

1. Describe the building. The 60-second enquiry asks for the address, what’s owed on it, the amount, the purpose and the exit. Nothing is checked against your credit file at this point.
2. Talk through the site. A specialist asks the industrial questions: access, tenancy, any strata scheme, environmental history.
3. Get the terms in writing. The Letter of Offer sets the loan size, the term, whether interest is prepaid or capitalised, and the assessment fee.
4. Sign with your solicitor. Every owner and guarantor completes identity checks.
5. Settle. The mortgage is registered and funds go where they’re needed, whether that’s your account, the bank being repaid or a machinery supplier.
6. Repay and discharge when the refinance, sale or contract income arrives.

Industrial deals rarely stall on the lender’s side. They stall when a lease can’t be found, a strata manager is slow to respond or a payout figure arrives late, so request those on day one.

Who suits an industrial property loan?

• Owner-occupiers in manufacturing, logistics, trades and wholesale who need fast funds.
• Industrial investors bridging a lease renewal, a purchase or a bank refinance.
• Businesses whose bank says not yet, because of a loss year, ATO arrears or a covenant breach.
• Companies and trusts holding industrial property for a business purpose.

When isn’t it the right move?

• When the need is long-term. A bank commercial loan is cheaper over years.
• When the building is highly specialised and the exit relies on selling it. Consider whether a refinance is more realistic.
• When contamination is known and unmanaged. Deal with it first.
• When selling now is the better answer. See borrow against property vs sell it.

How does a private industrial loan compare?

	Private first mortgage	Second mortgage behind bank	Bank commercial loan	Equipment finance	Sale and leaseback
Speed	24–48 hours possible	24–48 hours possible	Weeks	Days to weeks	Months
Rests on	Property and exit	Equity behind bank	Financials and servicing	The equipment	A buyer and lease terms
Term	1 to 24 months	Typically short	Years	Asset life	Long lease
Keeps ownership	Yes	Yes	Yes	Yes	No
Best for	Short-term need, any purpose	Topping up without refinancing	Long-term borrowing	Standard new machinery	Releasing all the capital

Documents you’ll need

• Photo ID for every owner and guarantor; ABN or ACN; trust deed if relevant.
• Property address and any strata details.
• Statements for loans on the property.
• Leases and rent details, if tenanted.
• Any environmental or building reports you already hold.
• Evidence of the exit.

What it costs (without the guesswork)

There’s no published price list. A factory with a long lease to a national tenant and a refinance lined up is a different risk from a specialised plant with an exit that depends on a sale, and each is priced on its own security, LVR, term and exit, with the aim of the sharpest outcome the deal allows. The cost components are interest, prepaid upfront or capitalised to the end; the assessment fee, which is small, varies per loan and appears in the Letter of Offer; your legal costs and the titles office’s registration fees; and the discharge when the loan is repaid. Ranking second behind a bank costs more than ranking first.

Illustrative example (net funds): a Geelong metal fabricator owns its factory, worth about $1.6m, with $500k owing to a bank that won’t extend further until next year’s accounts. It needs $400k for a laser cutter and materials for a defence supply contract. Illustrative: a private first mortgage refinancing the bank at 60% of value would allow up to $960k.

• Loan: $950k private first mortgage for 12 months
• Less bank payout: $500k
• Less interest prepaid for 12 months (set on the Letter of Offer): say $95k
• Less assessment fee, legal and registration costs: say $15k
• Funds to the business: about $340k, with the balance of the purchase from cash flow
• Exit: a bank refinance once the contract appears in the accounts The Geelong private lender page covers local title and CIPT points in more detail.

Equity sitting in a warehouse? Put it to work with a 60-second enquiry.

Own industrial property? See if you qualify

Tell us the property, what’s owing on it, whether it’s leased, how much you need and how you’ll repay. No credit check is run when you enquire, and your details go to one lender only, not a long list. A specialist who understands industrial security reads the file and calls you with a straight answer.

The more accurately you describe the building and existing debts, the faster that answer comes. See if you qualify, or read the private first mortgage page for terms and exits.