Secured loan against industrial property: what a lender checks before it accepts the security

Industrial property often holds more equity than its owners realise. A factory bought fifteen years ago, a strata unit paid off from the business’s profits, a yard on the edge of town that’s now surrounded by logistics sheds. That equity can fund stock, equipment, a tax bill or the next site. But industrial buildings raise questions a house never does, and knowing them in advance is what keeps the loan moving.

For the loan products and what owners use them for, see our industrial property loans page. This page focuses on the security itself: what a lender checks on an industrial title before it accepts it, and how to have the answers ready.

What does a lender check on an industrial property?

Check	Why it matters	What to supply
Title and ownership	Confirms who signs and what’s already registered	Owner details; company extract or trust deed if an entity owns it
Existing debt	Sets how much room is left	Latest statement for every loan on the title
Zoning and use	Shows who else could occupy or buy the property	What the site is used for and any planning approvals
Access and services	Trucks, parking, power and water drive demand	A short description; photos help
Environmental history	Contamination can narrow buyers and slow a refinance	Any reports, notices or remediation records
Fixtures and plant	Separates what the mortgage covers from what it doesn’t	A list of major plant and how it’s attached
Leases	Supports the property’s worth to an investor	Leases, rent statements, options

None of these needs a sworn valuation; we assess value ourselves, so there’s nothing for you to book or pay for.

Why does environmental history matter so much?

Because it’s the one issue that can follow a property from owner to owner. EPA Victoria, for example, maintains a priority sites register of sites with land or groundwater contamination and an active remediation notice. It notes that the duties to manage contaminated land apply to anyone in “management or control of the land” and “apply regardless of who caused the contamination.”

For a lender, that means a site with a history of fuel storage, chemical use or heavy manufacturing may have fewer buyers and may be harder to refinance with a bank. It rarely rules a property out. What helps is disclosure: tell us what the site has been used for, and share any assessments or clearances you have. Every state keeps its own environmental records, so your solicitor can check the right one.

Is your machinery part of the security?

Generally, no, and it’s worth understanding why. A mortgage is security over land, which includes the buildings and anything fixed to them. Machinery and equipment that can be removed is personal property. The PPSR glossary describes personal property as property “other than land, buildings and fixtures to land”, and security over it is recorded on the national Personal Property Securities Register, not on the land title.

In practice:

• Fixed items, such as a built-in cool room, a gantry crane bolted into the structure or a mezzanine floor, generally form part of the property.
• Removable plant, such as a CNC machine, a forklift or racking that can be unbolted, generally doesn’t.
• Finance on plant may already be registered against it by an equipment financier.

The distinction matters because specialised plant doesn’t add to what the property supports, and a buyer of the building won’t necessarily want it. If you’re comparing ways to fund equipment, our page on buying equipment with property equity covers the options.

What if your own company occupies the building?

This is the most common setup for industrial owners: a family trust or holding company owns the building, and the operating company runs the business from it. It works well as security, with two practical points:

1. The owner of the property offers the security. If a trust owns it, the trustee signs, and the deed must allow borrowing and mortgaging. See company or trust owned property.
2. A written lease helps. A lease from the owner to the operating company, on sensible terms, shows what the building would be worth to an investor and supports a refinance or sale as the exit. If there’s no formal lease, say so; it doesn’t stop the loan.

Strata units, freestanding buildings and industrial land

Security	Strengths	Points to check
Strata industrial unit	Many comparable sales; simple to assess	Levies, by-laws, special levies
Freestanding warehouse or factory	Flexibility for many users	Roof, fire services, condition
Industrial land with a yard or hardstand	In demand near freight routes	Contamination history, drainage, access
Vacant industrial lot	Serviced lots in estates sell readily	Zoning, services, plans to build

Industrial land is assessed case by case. If you own a lot outright, our vacant land loans page explains how land is treated more generally.

Do state taxes affect industrial security?

They can affect the exit. In Victoria, the State Revenue Office explains that commercial and industrial land enters a new scheme through an “entry transaction” on or after 1 July 2024, after which an annual tax applies “10 years after the initial transaction” and later sales are generally exempt from duty while the land stays in commercial or industrial use. That can change what a future buyer pays and what a sale nets. Ask your accountant how your state’s rules apply if a sale is the exit.

If you’d like an indicative answer before gathering anything, run the 60-second loan check with the property’s details.

Illustrative example: a former engineering works

Illustrative example only; the business and figures are made up.

A Wollongong fabrication company needs $650k to buy steel for a two-year infrastructure contract. The directors’ family trust owns the company’s workshop on an industrial estate, debt-free and assessed at around $1.5m. The site was used by a previous owner as a vehicle depot with an underground fuel tank, removed some years ago.

The directors disclose the depot history upfront and supply the tank removal records. The trust offers a first mortgage over the workshop and the directors guarantee. Illustrative: at a 50% band, the workshop supports up to $750k, covering the $650k. The CNC machines inside aren’t part of the security and stay with the company’s existing equipment financier. Interest is capitalised, so nothing is payable for the first 6 months, and the exit is a bank refinance once the contract’s first payments are banked.

What should you have ready before you enquire?

A short pack answers nearly every industrial-specific question before it’s asked:

• the address, the owner’s name and, for an entity, the company extract or trust deed;
• the latest statement for any loan secured on the property;
• a sentence on what the site is used for now and what it was used for before;
• any environmental reports, notices or clearance letters;
• leases and rent statements, including any lease to your own company;
• a list of major plant, noting anything already under equipment finance;
• what the money is for and how the loan will be repaid.

With that in hand, funding can happen in as little as 24 hours from a clean, complete application.

Own an industrial property? See if you qualify

The businesses that own their own sheds and factories tend to be the ones that build things, move things and keep the economy running. Their property can do more than house the business.

Our loan check takes about 60 seconds, with no credit check when you enquire, so your credit file isn’t touched. You’re dealing with the direct lender, which means your details aren’t passed around to multiple lenders. A specialist who understands industrial property reads your enquiry and phones you. Answer accurately about the site, its use and what’s owing, and you’ll get a real answer the first time.

Check what your industrial property can secure →