Commercial Property Refinance — Your Complete Guide

What is commercial refinancing?

Commercial refinancing means replacing one loan with another on a property that generates income — a warehouse, office building, retail shop, apartment block, hotel, or any other business property. You do it for lots of reasons: to get faster cash, to consolidate debts, to lower your interest rate, to restructure what you owe, or to clear a pressing liability like a tax debt or arrears.

The key difference between commercial and residential refinancing is that commercial properties are assessed based on their income-generating ability and the equity in the property. Banks care about cashflow and your credit file. Private lenders care about the property value, how much equity you have, and whether you have a clear plan to repay.

Why banks decline commercial refinances

Banks are hard to please when it comes to commercial property refinancing. Even if you have strong equity, they'll decline your application if:

• Your credit is impaired. A late payment, a default, or a business that's been in trouble will flag on your file and trigger a decline.
• There's ATO debt. Outstanding tax debt means the bank sees your business as risky. Most banks run ATO checks as standard and will decline immediately if there's any outstanding tax.
• You're behind on repayments. If you've missed payments or are in arrears, the bank sees that as default risk and stops the conversation.
• Your documentation is limited. If you're self-employed, don't have full financials, or can't provide two years of accounts, banks often decline without looking at the property.
• The property is unusual. If it's rural, or a property type banks don't normally lend on, or a niche use, they decline based on category rather than value.

How private lenders assess commercial refinances differently

Private lenders don't follow the same rulebook. Instead of leading with your credit file or your tax history, they ask three core questions:

• How much is the property worth? — The property is the security. If there's enough equity, the lender has confidence the loan is protected.
• What's the loan-to-value ratio? — How much are you borrowing relative to what the property is worth? Lower LVR means lower risk.
• What's your exit strategy? — How will you repay this loan? Usually by refinancing to a bank once things settle down, or by selling an asset or property.

If those three things stack up, your credit history, tax situation, or documentation gaps become factors in the deal — not reasons to say no. Many private lenders also offer lo doc options, meaning you don't need full accountants' reports or two years of financials. The property is what matters.

What a typical deal looks like

Imagine you own a commercial warehouse worth $4 million. You have an existing bank loan of $2 million. You've fallen behind on some payments and have an ATO debt of $150,000. The bank won't refinance because of the arrears and the tax debt.

A private lender offers you a loan of $2.2 million — enough to pay out the bank loan, clear the ATO debt, and cover the costs of settlement. The property is worth $4 million, so the loan-to-value ratio is 55%. You agree to a 12-month term, with the plan to refinance back to a bank once you've cleared the tax debt and got current on payments. Settlement happens in 5 business days.

What lenders want to see

Even though private lenders are more flexible than banks, they still need to understand the deal and the risk. Here's what makes a strong application:

• Clear property valuation. A recent valuation or evidence of what the property is worth. The more equity you have, the stronger the deal.
• Realistic exit strategy. How will you repay this loan? Refinancing back to a bank once things settle, selling another property, or completing a development deal. Lenders need to see a path to exit.
• Clear picture of all debt. What other loans exist on the property, what arrears or defaults are on your record, and what's the total borrowing relative to the property value.
• Honest communication. Lenders prefer to know about problems upfront. If there's ATO debt, arrears, or credit issues, tell them at the start. Hiding things kills deals.

When commercial refinancing might not work

Private lending isn't a magic fix for every situation. A commercial refinance might not stack up if:

• The total debt pushes the LVR too high — there's not enough equity in the property to make the lender comfortable.
• There's no realistic exit strategy. If there's no path to refinancing, selling, or clearing the debt, lenders won't proceed.
• The property can't be valued or is too unusual to assess. If the lender can't figure out what the property is worth, they can't calculate the risk.
• You're in serious financial hardship with no way forward. Refinancing is meant to solve a timing problem, not fix a broken business model.

Common commercial refinance situations

Below are the most common situations we see. Click on any one to read the detailed guide:

How to refinance a commercial property

The process is straightforward and built for speed:

• Step 1: Describe your situation. Tell us what property you own, what it's worth, what you owe, and what you're trying to achieve. You don't need to have everything sorted — just the basics.
• Step 2: Get matched with lenders. Our AI checks your scenario against specialist lenders on our panel and shows you which ones are likely to consider your deal, with plain English explanations of why.
• Step 3: Move forward. Review the options, pick the one that fits, and connect directly with the lender. Most private lenders can give you an indication within days.