Quick answer
Shops, offices, warehouses, factory units and mixed-use buildings can all secure a short-term business loan from $20k to $5m. Lenders look hardest at the lease, the zoning and how readily the property would sell, so commercial security is usually valued more cautiously than a house. In Victoria the loan can be a caveat; elsewhere it's a registered second mortgage, or a first mortgage when the title is clear.
Key points
- Retail, office, industrial, warehouse and mixed-use property are all considered.
- A strong lease with a reliable tenant usually supports a better outcome than a vacant building.
- Zoning and permitted use matter, because they decide who could buy the property.
- Owner-occupied premises work well, especially when the business has been trading there for a while.
- Victorian titles use a caveat; other states use a registered second mortgage; clear titles suit a first mortgage.
- Loan size
- $20k to $5m
- Key document
- The lease
- Valuation
- More cautious than houses
A lot of the equity in Australian small business sits in bricks, concrete and roller doors: the factory unit bought fifteen years ago, the shop with the flat upstairs, the warehouse the business has outgrown. That property can do far more than house the business. Used as security for a short-term loan, it can fund a tax bill, a stock buy, a buy-out or a deposit on the next site — usually without disturbing the bank loan already on it.
Which commercial properties can secure a short-term loan?
| Property type | What we look at | Typical appetite |
|---|---|---|
| Industrial unit or warehouse in an established estate | Access, clearance, power, demand for similar units | Strong |
| Strip shop or shopfront with a tenant | The lease, the tenant, the strip’s vacancy | Strong |
| Office suite or small office building | Floor area, parking, the local office market | Good |
| Mixed-use: shop with residence above | Both parts, and whether they can be sold separately | Good |
| Vacant commercial premises | Re-leasing prospects and the likely buyer pool | Case by case |
| Specialised: service station, childcare, cold store, plant | How few buyers there are | Case by case |
The test running through every row is simple: if the property had to be sold, how many buyers would there be, and how fast? A small warehouse in a busy estate has a deep pool of owner-occupiers and investors. A purpose-built cold store has a handful.
How is commercial property valued for a short-term loan?
More cautiously than a house, and for good reason — commercial markets are thinner and more sensitive to vacancy. The valuer will usually weigh:
- comparable sales of similar buildings nearby;
- the income — a commercial property’s value leans heavily on the rent it earns or could earn;
- the lease — length remaining, rent reviews, who pays outgoings, any options;
- condition and compliance — roof, fire services, accessibility, any notices; and
- zoning — what the land can legally be used for.
Even government valuers think about rent with commercial property: Victoria’s rating system works out a non-residential property’s annual value with reference to its estimated annual rental. A short-term lender’s valuer is doing something similar, with a sharper eye on what a buyer would pay in today’s market. Our guide to what the valuer checks on commercial property goes room by room.
Why do zoning and use matter so much?
Because zoning decides who could buy the property. business.gov.au advises checking with your local government or council about zoning — the rules that say whether your type of business can run in an area — before committing to a location. A lender asks the same question from the other side.
In Victoria, a free planning property report from Planning Victoria shows the zone and any overlays for an address, along with heritage and bushfire information. Other states have their own planning maps. Pulling the report before you enquire takes a few minutes and heads off surprises.
Have a commercial title and a deadline? Send us the details and we’ll tell you which structure fits and what timing is realistic.
Which loan structure fits commercial property?
| What’s on the title | Victoria | Every other state and territory |
|---|---|---|
| A bank loan already | Caveat loan behind the bank | Registered second mortgage behind the bank |
| Nothing — title is clear | Short-term first mortgage | Short-term first mortgage |
| Bank loan being refinanced anyway | Short-term first mortgage | Short-term first mortgage |
Outside Victoria we choose a registered second mortgage on purpose. Commercial property tends to change hands through lawyers and institutional lenders who expect to see interests registered in standard form. A registered mortgage reads cleanly on the title, its priority behind the bank is fixed by when it was registered, and paying it out at sale or refinance is a routine release. It’s usually arranged just as quickly as a caveat would be.
For more on short-term loans built specifically around commercial property, see short-term loans against commercial property.
A worked example: the factory unit funds the move
Illustrative only — round numbers, no real people.
A Brisbane signage manufacturer owns its factory unit in an established estate, worth about $1.4 million with $500,000 owing to the bank. The business has outgrown the space and signed a contract on a larger building, but it needs $350,000 for the deposit, stamp duty and new machinery before the bank’s finance for the new premises is finalised.
The factory unit is valued as an owner-occupied industrial unit with vacant possession. A short-term registered second mortgage of $350,000, plus costs, takes the combined lending on the unit to a little under 62% of the valuation. The company owns the unit, so both directors sign and give guarantees.
The exit is the sale of the old unit once the business has moved. It sells within a few months; the bank and the second mortgage are both paid at settlement, and the release is lodged. Short-term loans like this are measured in months, not decades.
What should commercial owners prepare?
- Title reference and a current title search.
- Leases — every current lease, with rent, term and options.
- Outgoings — rates, land tax, insurance, strata or owners corporation levies.
- Payout figures for every loan secured on the property.
- Ownership documents if a company or trust holds the title — see property in a trust or company.
- Exit evidence — sale contract, refinance approval or confirmed income.
Commercial equity, put to work — see if you qualify
Your premises have probably been quietly building equity for years. If there’s a job for that equity right now, we’ll tell you plainly what the property supports and how quickly it’s possible: $20k to $250k can be possible the same day, and up to $5m possible within 24–48 hours when the valuation, signatures and exit are ready.
The online form takes around 60 seconds and won’t trigger a credit check at enquiry stage. Your details aren’t broadcast to a list of lenders; a real person looks at the property and rings you. Please be accurate about the property type, whether it’s leased, the state it’s in and the date you need the funds.
Frequently asked questions
Can I borrow against the warehouse my business operates from?
Yes. Owner-occupied commercial and industrial property is common security. The valuer will consider the building's market appeal to other buyers, not just its value to your business.
Does it matter if the property is vacant?
It can. A vacant shop or warehouse is usually valued more cautiously than a leased one, and we may want a bigger equity buffer. Tell us upfront so the valuation is ordered correctly.
Are specialised buildings accepted?
Case by case. Service stations, childcare centres, cold stores and purpose-built plants have narrower buyer pools, which affects the valuation and how long it takes.
Which documents should I have ready for commercial security?
The title reference, any current leases with rent and term details, recent outgoings, payout figures for existing loans, ID for every owner and director, and evidence of your exit.
Is a caveat loan available on commercial property outside Victoria?
Outside Victoria we use a short-term registered second mortgage instead. It does the same job, it's the standard form commercial lenders and conveyancers work with, and it's usually arranged just as quickly.