Why banks decline warehouse refinances
Warehouses are a trickier asset class for banks than general commercial property. Banks have specific lending criteria for industrial properties, and warehouse refinances often fail to meet them — not because the property isn't valuable, but because it doesn't fit the bank's narrow box.
Common reasons for decline include: the property is single-tenant (so the bank worries about what happens if the tenant leaves); the lease term is shorter than the bank would accept; the tenant's creditworthiness is questionable; the owner's income documentation is lo-doc or self-employment; or the property is a specialized warehouse (cold storage, logistics, hazmat) that the bank doesn't lend on. Even if your warehouse is worth millions and you have equity to spare, one of these factors can trigger an automatic no from the bank.
How private lenders look at this differently
Private lenders don't apply the same institutional rulebook as banks. Instead of filtering your deal through a rigid criteria checklist, they evaluate three core things:
- What is the property worth today? — The warehouse is the security. A strong property valuation in an established industrial location gives the lender confidence.
- How much are you borrowing relative to the property value? — This is the loan-to-value ratio (LVR). Lower LVR means the lender has more cushion if property values shift.
- What's your exit strategy? — How will you repay the loan? Typical exits include refinancing to a bank once your situation improves, selling an asset, or using business cash flow.
If those three things align, the fact that a bank declined you becomes irrelevant. Specialist lenders on our panel actively fund warehouse refinances precisely because banks won't — they see the property value and the deal structure, not the decline reason.
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Check Your OptionsWhat a typical deal looks like
Illustrative example — not a real caseImagine a logistics company owner who owns a $3 million warehouse in an industrial park. The building has a long-term lease with a creditworthy tenant, but the bank declined the refinance because the property is classified as industrial and the owner's income is self-employment (which the bank requires different documentation for). The owner needs $1.8 million to pay out an existing lender and free up $300,000 for new equipment.
A private lender can offer a 12-month loan at 60% LVR — that's $1.8 million against a $3 million property. The structure gives the owner the capital they need while the lender has confidence in the property security. In 12 months, the owner can either refinance to a bank (once their circumstances improve) or move to longer-term private financing.
What lenders want to see
Even though private lenders are more flexible than banks, they still need to understand the deal structure. Here's what strengthens your application:
- Clear property valuation. A recent valuation or evidence of the warehouse's market value. The more equity available, the stronger your position.
- Lease details (if leased). If your warehouse is leased to tenants, lenders want to see the lease term, rental income, and tenant credit quality. A long-term lease with a strong tenant is a major plus.
- Exit strategy. How will you repay the private loan? Will you refinance to a bank, use business cash flow, or sell an asset?
- Overall debt picture. What's the total borrowing against the property, and what's the LVR relative to the property value.
When this might not work
Private lending is flexible, but not every warehouse deal stacks up. A refinance might not proceed if:
- The total borrowing (existing loans plus new funds) would push the LVR beyond what the lender will accept — there's not enough equity cushion.
- There's no clear exit strategy. If the lender can't see how you'll repay within a reasonable timeframe, they won't proceed.
- The property is in a declining industrial area or has structural issues that damage its security value. Lenders need confidence the property will hold its value.
- The lease is about to expire or the tenant is in financial difficulty. A warehouse is only as strong as the income it generates.
Our panel includes specialist private lenders who actively fund warehouse refinances. Across these lenders:
- Warehouse assets are actively funded — including single-tenant and specialized industrial properties
- Lo doc available — many lenders don't require full financials or traditional income proof
- Fast settlement — from as little as 1 week for straightforward deals
- Coverage across all Australian states and territories
The exact lender and terms depend on your specific deal. Describe your situation and our AI will match you with the most suitable lenders.
How to refinance a warehouse when the bank says no
The process is straightforward:
- Step 1: Describe your situation. Tell us what warehouse you own, its approximate value, how much you need to borrow, and why the bank declined. You don't need all the details — just the overview.
- Step 2: Get matched. Our AI checks your scenario against specialist lenders on our panel and shows you which ones are likely to consider your deal, with clear explanations of the structure and terms.
- Step 3: Move forward. Review the options, pick the one that fits best, and connect directly with the lender. Most specialist lenders can give you an indication within days.