Quick answer
A secured loan against commercial property uses a shop, office, strata suite, medical centre or mixed-use building as security for a business loan, by first mortgage, second mortgage or caveat. We lend up to 70% of value on commercial security, from $20k to $5m. How much a building supports depends on its location, leases, vacancy and how specialised it is, more than on its price tag.
Key points
- Up to 70% of value on commercial security, with every existing debt counted
- Location, lease quality and how many buyers would want the building drive the amount
- Owner-occupied and tenanted property both work; the evidence you supply differs
- Specialised buildings and strata suites are fine with the right paperwork
- No sworn valuation — we assess value ourselves
- LVR
- Up to 70% of value on commercial security
- Amounts
- $20k – $5m
- Valuation
- No sworn valuation — we assess value ourselves
- Terms
- Open terms — repay early anytime with no penalty
Commercial property can be powerful security for a business loan. It’s often large, it’s often debt-light by the time an owner needs funds, and it can be offered without involving the family home. But commercial buildings aren’t judged the way houses are. Two shops with the same price can support very different loans, because what really matters is who would buy them and how quickly.
This page explains how a private lender judges commercial property as security. For the loan products themselves, see the commercial first mortgage page, or the second mortgage on commercial property page if your bank stays in first place.
Can you get a secured loan against commercial property?
Yes. A shop, office, strata suite, medical or professional rooms, showroom or mixed-use building can secure a business loan from $20k to $5m. The lender can take:
- a first mortgage if the property is debt-free or the existing lender is being repaid;
- a second mortgage behind a bank that stays in place;
- a caveat for a short, quick need, which can later be converted to a registered second mortgage.
We lend up to 70% of value on commercial security, counting every existing debt on the title. There’s no sworn valuation: we assess value ourselves, so there’s nothing to arrange or pay for.
How are different commercial properties judged?
The question behind every assessment is simple: if the loan had to be repaid from the property, how readily would it sell, and to how many buyers?
| Property | What strengthens it | What to have ready |
|---|---|---|
| Strip shop or retail unit | Busy strip, foot traffic, a sound tenant on a longer lease | Lease, rent statement, any outgoings recovery |
| Freestanding office | Parking, access, flexible floorplate | Leases or confirmation it’s owner-occupied |
| Strata office or suite | Established complex with regular sales | Levy notice, any special levy, by-laws |
| Medical or professional rooms | Fit-out that suits many practitioners, not just one | Lease and any planning approval for the use |
| Childcare, hotel or other specialised use | Strong location and a long lease to an established operator | Lease, approvals, operator details |
| Shop-top or mixed use | Separate titles for the shop and dwellings | Title details showing how each part is held |
Specialised buildings aren’t ruled out. They simply carry a narrower pool of buyers, so the exit needs more thought.
Tenanted or owner-occupied: what changes?
Both are common. The difference is what supports the exit.
- Tenanted. The lease does a lot of the work. A long lease to a reliable tenant makes the building easier to sell to an investor or refinance with a bank. A short lease, rent arrears or a break clause weakens it.
- Owner-occupied. Your own business is the occupant. If your operating company pays rent to the company or trust that owns the building, provide that lease. If there’s no formal lease, say so; it doesn’t stop the loan, but the exit will lean more on a sale or refinance of the property itself.
A building that has just lost its tenant is its own case. Our page on vacant commercial property loans covers how that’s assessed.
What can reduce the amount a commercial property supports?
A few features come up again and again:
- Existing debt. The 70% limit applies to everything secured on the title, not just the new loan.
- Vacancy or short leases. Less certainty for the next owner.
- Heavy specialisation. A fit-out that suits only one kind of business.
- Strata issues. Large special levies or disputes within the owners corporation.
- Title surprises. Titles Queensland notes a title search shows owners and interests “including mortgages, easements, covenants, leases and caveats”. Anything unexpected there needs explaining.
Our page on how much equity you can use shows how the limit and existing debts combine.
Are there state taxes that affect commercial property security?
They can affect the exit, so they’re worth knowing. In Victoria, the State Revenue Office explains that the commercial and industrial property tax “progressively abolishes land transfer duty (stamp duty)” for commercial and industrial land. Property enters the scheme through an entry transaction on or after 1 July 2024, and an annual tax starts “10 years after the initial transaction”. Later sales of property in the scheme are generally exempt from duty if the property stays in commercial or industrial use.
For an owner, that can change how attractive a building is to the next buyer and what a sale nets. If a sale is your exit, ask your accountant how state taxes and GST apply to your building before you rely on the figure. If you’re unsure what a building can support, a quick loan check gives an indicative answer without a credit check.
Illustrative example: a strata suite funding a second clinic
Illustrative example only; the business and figures are made up.
An Adelaide physiotherapy practice wants to open a second clinic and needs $250k for the fit-out and equipment. The practice owner’s family trust holds the strata suite the first clinic operates from, debt-free, and assessed at around $700k. The practice company pays rent to the trust under a written five-year lease.
Illustrative: at a 70% commercial limit, the suite could support up to $490k, so the $250k sits comfortably within it. The trust offers a first mortgage over the suite, the trustee signs, and the owner guarantees. The family home isn’t involved. Interest is capitalised, so nothing is payable for the first 6 months while the new clinic builds its patient list, and the exit is a bank refinance once both clinics have a full year of figures.
How does commercial security compare with other property types?
| Commercial | Residential | Industrial | |
|---|---|---|---|
| Lending limit | Up to 70% of value | Up to 80% of value | Assessed case by case, like commercial security |
| What drives the amount | Location, leases, vacancy | Location and saleability | Access, zoning, use, specialisation |
| Typical evidence | Leases and strata papers | Rates notice and loan statements | Leases and any environmental history |
| Read more | This page | Residential security | Industrial security |
For a side-by-side of homes and commercial buildings in more depth, see residential vs commercial security.
What should you prepare before you enquire?
- The property address and how it’s owned (personally, by a company or by a trust).
- The latest statement for any loan secured on it.
- Leases, rent statements and the strata levy notice if it’s a strata lot.
- Company extract or trust deed if an entity owns it.
- What the money is for and how it will be repaid.
With those ready, funding can happen in as little as 24 hours from a clean, complete application.
Own commercial property? See if you qualify
A building that’s working hard for your business can do a little more. Tell us about the property, the leases and what’s owing, and we’ll tell you what it can support.
The check takes around 60 seconds, and there’s no credit check to find out, so asking won’t affect your credit file. Your details come straight to us as the direct lender, not sold on to a list of lenders who all chase you. A specialist who knows commercial property reads your enquiry and calls you. Accurate figures on the property and its debts mean the answer you hear first is the one that holds.
Frequently asked questions
Why is the lending limit lower on commercial than residential property?
Commercial property usually has fewer buyers and takes longer to sell, and its worth leans heavily on the tenant and lease. A lower limit leaves a buffer for that. We lend up to 70% of value on commercial security and up to 80% on residential.
Can I borrow against a commercial building my own business occupies?
Yes. Owner-occupied commercial property is common security. If your operating company pays rent to the entity that owns the building, have the lease ready; if there's no formal lease, tell us, because it changes how the exit is assessed.
Does a vacant shop or office still count?
Yes, case by case. Vacancy narrows the exit options, so the plan to lease or sell matters more. Our page on vacant commercial property loans covers how that's handled.
Can a strata office or medical suite secure a loan?
Yes. Strata commercial lots are often easier to assess than whole buildings because there are more comparable sales. Have the latest levy notice and any special levy details ready.
Is a mixed-use building assessed as commercial or residential?
It depends on how the building is used and titled. A shop with a flat above on one title is usually assessed as commercial; separately titled residential lots above a shop can sometimes be assessed as residential.
Will I need to provide leases?
If the property is tenanted, yes. The lease, the rent being paid and any options or break clauses help show what the building is worth to a buyer and how secure the exit is.