July 2, 2026 Industrial & Logistics

Commercial Mortgages for an Engineering Workshop, Explained

Buying the industrial unit your engineering or welding workshop already runs from is a defining move for any fabricator. At Ardent Capital Group we speak with workshop owners about this kind of commercial property purchase, so this guide sets out how a lender reads the shed, the fit-out and your trade income, and what shapes the deposit.

Ardent Capital Group is a specialist in commercial mortgages for engineering and welding workshop operators across Australia. Our team can help you move from tenant to owner, and give you clear lending advice on structure and strategy.

Funding capacity: Access finance from $100,000 to $10,000,000+ for owner-occupied industrial property.
Proven experience: Over $500,000,000 facilitated in commercial loans over the past decade.
Sector focus: Deep experience across fabrication, machining, metalwork and industrial services.
National coverage: Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra, Hobart and regional centres.

Owning vs leasing your engineering workshop

A workshop fit-out is specific and costly to replicate. Three-phase power upgrades, heavier slabs for machines and forklifts, gantry rails, fume extraction, compressor air lines, roller doors with height clearance, hardstand and truck access all add up. Location ties work-winning to the site, especially for time-sensitive jobs in mining services, construction, infrastructure and defence supply. The revenue base is diversified across maintenance, fabrication and project work, which supports long-term occupancy. Repayments build an owned industrial asset that can be leased to your trading company at commercial rent, preserving value beyond contract cycles.

Main drivers:

Control of fit-out and power capacity: Keep your electrical upgrades, slab reinforcement, crane rails and workflow unchanged for years.
Operational reliability: Secure truck access, noise buffers and working hours that suit metalwork, including early starts.
Cost discipline: Convert unpredictable rent increases into a defined loan profile, with equity building over time.
Future optionality: Hold an industrial asset that can be leased, expanded or sold on your terms.

Buying will not suit every situation. A short lease horizon, a likely relocation to follow a major client, or capital better used for plant upgrades, certifications or hiring can tilt the balance toward renting. The decision sits with you.

For a clear read on your borrowing position, our team can shape an engineering workshop property loan around how you trade and where the site fits your contracts.

What an engineering workshop commercial mortgage looks like

Deposit and LVR: An industrial unit is standard commercial security, so an owner-occupier purchase gears up to 80 per cent with the lenders that suit it, a deposit from around 20 per cent plus costs. A 100 per cent funded path is possible where you add security over another property you own. The major banks publish no owner-occupier commercial LVR at all, which is much of why a broker earns their place here.
Loan term: The banks commonly write 10 to 15 year terms, while non-bank lenders run up to 25 to 30 years. Principal and interest builds equity across the term, and an interest-only period can support cash flow during a growth phase or after a major equipment purchase.
Security and serviceability: The property is the primary security. Lenders assess business financials, addbacks such as depreciation, contract pipelines, BAS and bank statements to test serviceability.
Owner-occupier treatment: Lenders often favour owner-occupiers because vacancy risk is lower and performance holds through cycles, which can shape pricing and the LVR available upon settlement.

Common ways to hold the property

Owner-occupiers rarely buy the unit in their trading name, and the way the title is held shapes the security a lender takes, the guarantees it asks for and how rent moves between entities. Many engineering and welding workshop operators hold the freehold in a separate entity and lease it back to the trading company, and a lender then reads the inter-entity rent as the serviceability line. The arrangements a lender commonly finances around:

Holding and operating company split: a property company owns the unit and leases it to the trading company at market rent. The lender secures the building in the property company and usually takes directors' guarantees, while the fabrication income that services the loan sits in the operating entity. This keeps the fit-out risk and the trade risk on separate balance sheets.
Unit or discretionary trust: the trust holds the workshop and the beneficiaries or unit holders take the benefit. A lender looks through the trust to the trustee and the guarantors and will want the trust deed, so it can see who controls the shed and who stands behind the debt.
Multiple trusts: some owners separate the property, the plant and the trade across more than one trust, so a claim against the operating business does not reach the building. A lender still assesses the whole group, the rent that flows between them and the guarantees that tie them together.
SMSF with a bare (custodian) trust: the fund buys the unit under a limited recourse borrowing arrangement, with a custodian holding legal title until the loan is repaid. Commercial premises generally qualify as business real property, so the fund can lease the workshop back to your business at market rent. Expect a larger deposit, an SMSF band of 65 to 80 per cent, tighter serviceability on fund contributions and rent, and liquidity kept for the fund's obligations.

Ardent structures the finance around your set-up; your accountant confirms the tax, super and ownership detail before anything is locked in.

How your application is assessed

Business financials: Two to three years financials, YTD management accounts, BAS, tax position and any ATO plans.
Serviceability: Earnings quality, addbacks, interest coverage, contract book, customer concentration and bank statement trends.
Property and valuation: Zoning and permitted use, power supply (kVA), slab thickness, roller door height, crane capacity, ventilation and extraction, compliance for spray booths and gases, site access and hardstand.
Deposit and equity: Cash on hand, retained profits, or the ability to leverage your equity in other property.
Lease and occupancy: Owner-occupier intent, any sub-tenancies, remaining lease terms if part-investment, and market rent support.

A specialist broker who understands fabrication workflows, compliance and industrial valuations helps match your profile to lenders who back engineering operations.

How this might look in practice

This is an illustrative scenario that shows the kind of situation we can assist with, and how the thinking might run.

Situation: a Western Sydney welding shop with 12 staff, renting 800 sqm for $135,000 per year plus outgoings, having invested $220,000 in three-phase power, gantry rails and fume extraction. The landlord indicates a sale of the strata units at $1,750,000 each.
Options we would map:
- An owner-occupier loan at 75 per cent LVR, a deposit near $437,500 met from cash and the ability to leverage your equity in a residential property.
- A funded path using additional security over another property to reduce the cash deposit, with equipment finance kept separate to preserve working capital.
- A short interest-only period to manage cash flow through a capacity upgrade, then a switch to principal and interest.
Structures we would consider:
- A unit trust holding the property, with the trading company leasing it back at around $140,000 per year in market rent.
- An SMSF purchase under a limited recourse borrowing arrangement, with the higher deposit and liquidity rules flagged early.
How the lending could sit upon settlement:
- A term up to 20 years at up to 80 per cent LVR, with repayments aligned to workshop cash flow cycles.
- A fit-out top-up through asset finance mapped to the working life of the cranes and compressor.
How we would approach it: we would map the ranges, structures and repayments, then the owner would choose the path that fits their contracts and cash position. The figures above are illustrative, not confirmed outcomes.

Finance types for engineering workshop owners

Asset finance for fabrication and machining equipment: CNC plasma or laser cutters, press brakes, bandsaws, lathes, mills, positioners, welders, forklifts and compressors.
Fit-out and refurbishment finance: Heavy slab reinforcement, crane rails, three-phase upgrades, fume extraction, mezzanines and roller door changes.
Working capital loans: Fund plate and section steel purchases, welding consumables and work in progress between progress claims.
Business overdraft: Manage lumpy receipts from project milestones and urgent repair jobs.
Refinancing and debt consolidation: Reset rates, tidy multiple facilities and align terms with asset lives.
Construction and renovation: Build a new shed, add bays, extend hardstand or install a higher-capacity gantry.
Business or premises acquisition finance: Buy a competitor's workshop, acquire plant with the goodwill, or purchase the unit from your landlord.

Owning the premises can stabilise occupancy and, over time, free equity for plant upgrades, while movable equipment is usually best matched with engineering workshop equipment finance mapped to its working life so the property loan is not stretched to cover it. To fund plate and section steel, consumables and work in progress between progress claims, working capital for an engineering workshop keeps the day-to-day running separately from the property debt.

A broker who knows engineering workshop property

Ardent Capital Group positions engineering and welding workshop owners to buy and hold their industrial property with clear structures, serviceability planning and lender selection. We arrange and structure finance around how you intend to hold and occupy the building.

We service Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra, Hobart and surrounding metro and regional areas. We have helped facilitate over $500,000,000 in funding over a decade for over 1,000 borrowers.

Nick and the Ardent Capital Group team come from a financial planning background, so we can shape a structure that fits how you trade and where you want the business to be, then confirm the final detail with your accountant. If you are weighing up buying your workshop, we would be glad to talk it through.

Your questions answered

What deposit do I need to buy my workshop? An industrial unit gears up to 80 per cent as an owner-occupier, so a deposit from around 20 per cent plus costs. Adding security over another property you own can reduce the cash you contribute, subject to serviceability, lender appetite and approval.

Can my SMSF buy the factory unit my business occupies? Yes, commercial property generally qualifies as business real property; an SMSF can purchase via a limited recourse borrowing arrangement and lease it back at market rent, noting the larger deposit, liquidity and compliance rules.

How do lenders assess a fabrication business with lumpy cash flow? They review multi-year earnings, addbacks like depreciation, work in progress and contract schedules, BAS and bank statements, and look for interest coverage across cycles rather than a single month.

Can I fund cranes, compressors and extraction with the property loan? Fixed fit-out may be included in a blended facility, while movable plant is usually better matched with asset finance to align terms with equipment life.

Owner-occupier versus investment purchase, what changes? Owner-occupiers often access a higher LVR and different pricing; an investment purchase focuses more on lease strength and market rent, with structure tailored to your entity and tax planning.

Will spray booths, fumes or noisy work affect valuation or lending? Valuers consider zoning, environmental compliance, extraction design, fire systems and approvals; good documentation supports value and lender comfort.

Can I leverage your equity in my home or another property to reduce the cash deposit? Yes, an equity release or additional security can reduce the cash outlay for deposit or costs, subject to lender acceptance and overall serviceability.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.