25 September 2026 Featured Guides

How to Refinance a Commercial Property Loan in Australia

Refinancing a commercial property loan can lower your costs, carry you past an expiry date, release equity for your next step or move you off a private loan. This guide covers every stage, from the LVR and what a lender reads in your financials to costs, documents and settlement.

Refinancing a commercial property loan means replacing the loan you have with a new one, usually to lower what the loan costs, get past an expiry date, release equity for the next step, or move off a short-term private loan. The process is logical once you can see it laid out, and most of the work sits in preparation, which is fully in your control.

At Ardent Capital Group we are commercial mortgage specialists. We know which lenders will consider a particular property, borrower and structure, and we read the whole picture a credit team will read: the property, the business that pays the loan, the previous and current financials, and every entity and directorship in the group. This guide walks through each part of that, in order, so you know what a lender will ask before it asks.

What this guide covers

• What refinancing a commercial property loan means
• Common reasons business owners refinance
• When to start a commercial refinance
• Releasing equity and how LVR sets the amount
• How lenders assess a commercial refinance
• Refinancing out of a private or high-interest loan
• Bank or non-bank lender for a refinance
• Refinancing costs and how to work out break-even
• The commercial refinance process, step by step
• Documents you need to refinance a commercial property
• What can slow a refinance, and how each is handled
• Refinancing an SMSF commercial property loan
• An illustrative scenario
• Common questions about commercial refinancing
• Commercial refinance by property type

What refinancing a commercial property loan means

A refinance pays out your existing loan with money from a new loan. The new lender settles with the old one, the old mortgage comes off the title, and the new mortgage goes on. You can refinance with your current lender (often called a restructure or repricing) or move to a different lender entirely.

Five things can change in a refinance, and most refinances change more than one:

• The lender. A major bank, a second-tier or regional bank, or a non-bank lender.
• The rate and fees. The margin over the lender's base rate, whether it is variable or fixed, and the ongoing fees.
• The term. Banks commonly write commercial loans for 10 to 15 years. Non-bank lenders commonly write 25 to 30 years, which lowers the principal portion of each repayment.
• The repayment type. Principal and interest, or interest only for a set period.
• The loan amount. The same balance, a larger one that releases equity, or a combined loan that consolidates other debts.

A commercial refinance differs from refinancing a home in three practical ways. The lender assesses the business and the rent, not a salary. The property is valued on its income and its lease as well as its bricks and mortar. And the loan documents often reach further than the mortgage itself, which matters when you move (covered under all-monies clauses below).

Common reasons business owners refinance

The reason you are refinancing shapes which lenders fit and what they will test first. Here is what triggers each one, and what the new lender looks at hardest.

When to start a commercial refinance

Work backwards from the date that matters: the loan expiry, the end of the interest-only period, the rate review, or the end of a private loan term. Starting three to six months ahead leaves room for a valuation, a credit decision, loan documents and the discharge of the old loan without pressure on any of them.

If your loan is with a bank that subscribes to the Banking Code of Practice and you qualify as a small business customer, the bank must give you at least three months' notice of a decision not to extend your loan, provided you are not in default. Outside the Code, the notice is whatever your loan contract says, so read the contract now rather than at expiry.

Two requests to your current lender cost nothing and commit you to nothing:

• A payout figure. The amount needed to clear the loan on a given date, including any break costs and fees.
• A letter of facilities, or a current loan statement for every account. This lists every loan, overdraft, card, equipment loan and bank guarantee you hold with that lender. You need the full list because the new lender has to know everything the old mortgage secures.

With those two documents and your accountant's timetable for this year's financials, you can set a realistic date and pick the order of the work.

Releasing equity and how LVR sets the amount

Equity is the difference between what the property is worth today and what you owe on it. A lender will lend against part of that value, set by its loan-to-value ratio (LVR). The LVR is the loan divided by the property's value.

The LVR bands for a commercial refinance

• Standard commercial property (office, retail, industrial, warehouse, factory, workshop), assessed on full financials: up to 80%.
• Lease doc loans, where the lender relies on the lease and the rent rather than full financials: 65% to 75%, tiered by loan size, with the lower end applying to larger loans.
• Specialised property such as a pub, motel, hotel, childcare centre or caravan park: 50% to 65%.
• The major banks do not publish an owner-occupier commercial LVR. They assess each loan case by case.

LVR is driven mainly by the property type, the documentation and the loan size. There is no separate LVR for your profession or trade: a law firm and an engineering firm refinancing the same strata office are assessed against the same band.

A worked example

These round figures are illustrative only. A business owner bought a warehouse some years ago. A fresh valuation now puts it at $4M, and the loan balance is $1.5M.

• At 80% on full financials, the maximum loan is $3.2M. Take away the $1.5M owing and up to $1.7M is available, before costs.
• On a lease doc loan at 70%, the maximum loan is $2.8M, and up to $1.3M is available, before costs.
• From either figure, take off the refinance costs (valuation, legal, establishment fees and any break costs) to reach the cash you would actually receive.

The LVR sets the ceiling, and the income sets whether you reach it. The business or the rent still has to cover repayments on the larger loan (see interest cover below). Lenders also ask what the released money is for, such as a deposit on a second property, a fit-out, equipment or working capital, and some set tighter limits on the cash-out portion than on the refinanced balance. A clear purpose, supported by figures, helps the application.

The fresh valuation resets everything. If the property has gained value since purchase, your usable equity rises with it. If you are refinancing to fund your next purchase, our guide on how a refinance could fund your next commercial move covers that use in more depth.

How lenders assess a commercial refinance

A new lender assesses a refinance as a new loan. Your years of repayments with the old lender count in your favour, but the credit team still reads the property, the business, the group and your conduct from scratch.

The property

• The valuation. The new lender orders its own valuation from its own panel. It will not rely on a valuation your current lender holds.
• The lease. Its remaining term, the options to renew, the rent review method, and whether the rent is at market. A lease with a few years left supports a stronger value than one about to expire or already holding over.
• The tenant. Who pays the rent, how long they have been there, and whether the tenant is your own business (a related-party lease) or an unrelated one.
• Vacancy and condition. Any vacant tenancy, major repairs due, or zoning question the valuer notes.

For investment property with outside tenants, our tenanted commercial refinance page covers how the lease drives the loan.

The business, and why the current year's drafts matter

For an owner-occupied property, the business pays the rent that pays the loan, so the lender assesses the business. On a full doc loan it asks for the last two years of lodged financial statements and tax returns for each entity, and it will look at how the current year is tracking.

This is where the current year's draft financials or management accounts carry weight. If the last lodged year was softer than the business is today, the lodged figures on their own understate the business. Current drafts from your accountant, a year-to-date profit and loss, and business activity statements (BAS) show the lender where the business actually stands. Some lenders will assess on draft figures with an accountant's letter, and others will wait for lodgement. Knowing which lender does which decides the timing of the whole refinance.

A lender will also read the financials line by line: owner wages, depreciation, one-off costs, interest on loans that the refinance will pay out. These add-backs change the income available to pay the new loan, and they need to be shown clearly in the application rather than left for the credit team to find.

The group: every entity, directorship and guarantee

Many business owners hold property in one entity and trade through another, for example a family trust owning the building and a company running the business and paying the rent. A lender will map the whole group before it approves:

• Every company and trust you are a director, trustee, shareholder or beneficiary of.
• Every loan in each entity, including car and equipment loans, overdrafts and credit cards.
• Every guarantee you have given, including guarantees for other businesses or family members.
• The lease between your property entity and your operating business, which should be in writing, at market rent, and actually paid.
• Any tax debt or payment arrangement in any entity in the group.

A directorship you have forgotten about still shows up on a company search, so disclosing everything at the start avoids a late question from the credit team. Groups with more than one property often refinance the whole group at once. Our portfolio refinance page covers how lenders assess several properties together.

Interest cover and debt service cover

Lenders test whether income covers repayments with two ratios.

• Interest cover (ICR) is net income divided by the interest on the loan. For an investment property, the net income is the rent after outgoings. Published tests are commonly 1.2, 1.25 or 1.5 times.
• Debt service cover (DSCR) is the business's earnings before interest, tax, depreciation and amortisation divided by all its repayments, principal and interest, across every loan. Owner-occupier refinances are usually tested this way.

The lender calculates the interest at its own assessment rate, which sits above the rate you will actually pay. An illustrative example: an investment property earns $300K a year in net rent. If the interest on the new loan at the assessment rate is $200K a year, interest cover is 1.5 times. Increase the loan so the assessed interest is $250K, and cover falls to 1.2 times. That is why the income, not only the valuation, often sets the final loan amount.

Credit conduct and tax

• Repayment history on the current loan and every other loan in the group, usually over the last six to twelve months of statements.
• Credit files for each director and guarantor, and for the companies.
• Tax lodgements and any ATO debt. A tax debt does not rule out a refinance. Lenders look at its size, whether a payment arrangement is in place and being met, and whether all lodgements are current. Some lenders will clear the debt as part of the refinance, and others require it cleared first.

Refinancing out of a private or high-interest loan

A private loan is built for speed and short terms, measured in months rather than years. It settles a purchase quickly, covers an expiry your bank would not extend, or bridges a year when the financials did not meet bank policy. Private lending does that job well. The goal from the day it settles is the exit to a lower-cost lender, and the exit is a refinance.

A non-bank or bank taking out a private loan wants to see that the reason you went private is resolved:

• Repayments met in full and on time since the private loan settled.
• Tax returns lodged and current, and any ATO payment arrangement being met.
• Updated financials showing the business now covers repayments at the new lender's assessment rate. Current-year drafts matter here more than in any other refinance, because the recovery usually sits in the current year.
• Any arrears or defaults explained, with evidence that they are settled.
• A valuation that supports the new loan at the new lender's LVR.

The exit does not have to be a single step. A common route runs from a private lender to a non-bank lender, which can assess on alternative documents such as BAS and an accountant's declaration, and later to a bank, once two full years of lodged financials show the recovery. Each step lowers the cost of the loan.

Timing matters most with private money. Private loans often carry higher default rates and extension fees once the term ends, so the refinance application should be in front of the new lender well before the end date. Starting three to six months before expiry is the working rule here too.

Bank or non-bank lender for a refinance

Each lender type suits a different refinance. The same property and business can receive quite different answers from each.

Refinancing costs and how to work out break-even

A refinance has costs on the way out of the old loan and on the way into the new one.

Costs of leaving

• Break costs if any part of the loan is on a fixed rate and you repay it before the fixed period ends. Ask for the figure in writing, because it can change with market rates.
• Discharge fee to release the mortgage.
• Early repayment or termination fees, which some non-bank and private loans charge inside a set period.
• The outgoing lender's legal costs, where the contract passes them to you.

Costs of arriving

• Establishment or application fee charged by the new lender.
• Valuation fee for the new lender's valuation.
• Legal fees, yours and often the new lender's.
• Land registry fees to discharge the old mortgage and register the new one.

No Australian state charges duty on a mortgage today. If a refinance also moves the property into a different entity, though, that move is a transfer, and transfer duty can apply. Your accountant and solicitor confirm that before anything is signed, and your accountant also confirms how the refinance costs are treated for tax.

Working out break-even

Divide the total one-off cost of the refinance by the monthly saving. As an illustrative example, $15K in costs against a saving of $1.5K a month breaks even in 10 months. Anything you hold the loan past that point is a saving.

Compare the two loans on the same basis. A lower repayment can come from a longer term or a new interest-only period rather than a cheaper loan, so compare the rate, fees and total interest over the time you expect to hold the loan, with the repayment type matched.

Before you move, ask your current lender for a retention rate. A written offer from a competing lender gives that conversation substance. If your lender matches it, you have saved the cost of moving. If it does not, you move with the numbers already worked out.

The commercial refinance process, step by step

1. Set the goal and the deadline. Lower cost, equity for a purpose, an exit from a private loan, or all three, with the date that matters. You and us.
2. Gather the current loan details. Payout figure, letter of facilities, loan statements, and the break cost position. You, from your current lender.
3. Map the business and the group. We read the previous and current financials, every entity, directorship and guarantee, the leases and the tax position, and work out what a credit team will ask. Us, with you and your accountant.
4. Match the lenders. We take the scenario to the lenders whose policy suits it, so you are not enquiring lender by lender, and compare indicative terms side by side. Us.
5. Submit the application. We prepare the credit submission with the numbers, the add-backs and the story of the business laid out for the credit team. Us, with your documents.
6. Valuation and credit approval. The new lender orders its valuation and makes its decision, then issues a letter of offer. The new lender.
7. Sign the loan documents and discharge authority. Your solicitor reviews the documents, and you sign the authority for the old lender to release the mortgage. You and your solicitor.
8. Settlement. The new lender pays out the old loan, the old mortgage is discharged and the new one is registered. The two lenders and their solicitors.

Once it settles, check each of these:

• The old mortgage is discharged on the title.
• Every account meant to close has closed, and every loan meant to move is live.
• Any bank guarantee, such as a rental guarantee for your business premises, has been replaced and is held by the right landlord.
• Direct debits and merchant payments point to the new accounts.
• The first repayment date and amount match the letter of offer.

We stay on after settlement and review the loan as the business changes, so the next refinance starts from a clear record.

Documents you need to refinance a commercial property

Documents vary by lender and by whether the loan is full doc, alt-doc or lease doc. A full doc refinance usually asks for:

The property

• The current lease or leases, including any variations and option notices.
• A rent roll or rental statement for a tenanted property.
• Council rates and a recent outgoings summary.

The business

• The last two years of financial statements and tax returns for each entity.
• Current-year draft financials or management accounts, and a year-to-date profit and loss.
• Recent BAS, and an ATO portal statement for each entity.
• An accountant's letter where drafts are relied on or add-backs need explaining.

The group and its entities

• A simple diagram of the group: who owns which entity, and which entity owns the property.
• Trust deeds and company extracts.
• Details of every loan and guarantee in every entity.

You and the other directors

• Photo identification.
• Personal tax returns and notices of assessment, usually for the last two years.
• A statement of personal assets and liabilities.

The current loan

• Six to twelve months of loan statements.
• The payout figure and letter of facilities.
• The loan contract, to check break costs, fees and notice terms.

An alt-doc loan replaces the lodged financials with BAS, business bank statements and an accountant's declaration. A lease doc loan relies mainly on the lease and the rent. Neither is a no-doc loan: the lender still values the property, checks conduct and tests the LVR.

What can slow a refinance, and how each is handled

Six causes account for most delays, and each one has an answer.

• A valuation below expectations. The new lender's valuer may be more conservative than the last one. The answers include a lender with a different valuation panel, a lower loan amount, additional security, or updating the lease before the valuation so the valuer sees the stronger lease.
• A short lease. A lease near expiry supports a lower value. Renewing or extending it before the valuation, where the tenant agrees, gives the valuer longer income to work with. Some non-bank lenders also accept a shorter lease than banks do.
• An all-monies clause. Many commercial mortgages secure all money you owe that lender, not only the property loan. Overdrafts, cards, equipment loans and bank guarantees with the same lender may need to be paid out, moved or replaced at settlement. The letter of facilities shows you every one of them early, so the new lender can plan for it.
• ATO debt. A current payment arrangement being met, and lodgements up to date, keep a wider group of lenders open. Some lenders will refinance with the debt paid out from the new loan.
• Financials that are out of date. If the last lodged year is old or weak, current drafts and an accountant's letter, or an alt-doc loan, can carry the application while lodgement catches up.
• A discharge that runs late. The outgoing lender controls how fast it releases the mortgage. Signing the discharge authority early, and confirming the payout figure a few days before settlement, keeps the date.

Refinancing an SMSF commercial property loan

An SMSF can refinance a limited recourse borrowing arrangement over its commercial property, and the detail is what decides whether it works:

• The refinance is confined to the same single property, for the balance outstanding plus accrued interest. An SMSF loan cannot release equity or fund a top-up.
• The property stays in its separate holding (bare) trust, and the new lender's recourse is limited to that one asset. Changing lender can mean legal work on the holding trust documents, which is a cost to weigh against the saving.
• Cross-collateralisation is not available inside super, so the loan stands on the one property.
• A related business leasing the property must have a written lease at market rent, supported by an independent appraisal, with the rent actually paid.
• For standard commercial property, SMSF LVRs run from 65% to 80%. The major banks exited SMSF lending between 2015 and 2019, so SMSF refinances sit with specialist and non-bank lenders.

We arrange the finance around the fund's existing set-up and tell you which lenders will refinance it and on what terms. Your accountant and the fund's SMSF specialists and licensed advisers confirm the super, tax and trust detail before anything is signed. Our SMSF commercial property refinance page covers the lender side in more detail.

An illustrative scenario

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

A metal fabrication business owns its factory through a family trust, which leases it to the operating company. Two years ago a slower year left the company with an ATO debt, and when the bank loan on the factory reached expiry, the owner moved it to a private lender for $1.8M on a short term. The private loan expires in five months.

The business has since recovered. The current year's draft financials show profit well above the last lodged year, the ATO payment arrangement has been met every month, and the lease between the trust and the company is in writing at market rent. A fresh valuation could put the factory at around $3.5M.

• The group map. The trust, the operating company, the directors' guarantees, the equipment loans in the company, and the ATO balance of around $150K.
• The numbers. Clearing the private loan and the ATO debt comes to around $1.95M, which on a $3.5M valuation is an LVR of about 56%, inside the band for standard industrial property.
• The documents. The last two lodged years, the current drafts with an accountant's letter explaining the recovery, BAS for the current year, and the ATO arrangement history.
• How we would approach it. We would take the scenario to non-bank lenders that assess on current drafts or alt-doc, and that will clear an ATO debt inside the refinance. We would submit well before the private loan's end date and plan a later step to a bank once two recovered years are lodged. The figures above are illustrative, not confirmed outcomes, and every loan is subject to lender assessment.

Common questions about commercial refinancing

How long does a commercial refinance take?

Where the documents provided are clean and straightforward, we can complete a commercial refinance within one week. More complex groups, draft financials or a slow discharge from the outgoing lender add time, so for those, start three to six months before your deadline.

Can I refinance before my loan term ends?

Yes. On a variable rate, the costs are usually the discharge fee and any early repayment fee in the contract. On a fixed rate, ask for the break cost in writing first.

Will refinancing affect my credit file?

Each formal application is recorded on the credit files of the borrowing entity and its directors. Taking the application to the lenders whose policy suits it, rather than applying widely, keeps the number of enquiries down.

Do I need a new valuation?

Almost always. The new lender orders its own valuation from its own panel, and that valuation sets the LVR.

Can I refinance if my current lender has declined to extend my loan?

Yes. A decline from one lender reflects that lender's policy at that time. Non-bank lenders in particular assess expiring loans that a bank has chosen not to renew, provided the property and the income support the new loan.

Do I have to tell my current lender I am refinancing?

Not to start. Requesting a payout figure, statements and a letter of facilities is routine. You will need to tell it when you sign the discharge authority, and a competing offer in writing is useful if you ask for a retention rate first.

Can I refinance with draft financials?

With some lenders, yes. Some will assess current-year drafts supported by an accountant's letter, and alt-doc lenders assess on BAS and an accountant's declaration. Others wait until the year is lodged.

Commercial refinance by property type

Lenders value and assess each property type differently, from the LVR band to how the lease or the business is read. Our refinance pages cover each category in detail:

• Warehouse and industrial refinance: warehouses, factories, workshops and industrial units.
• Retail property refinance: shopfronts and showrooms, owner-occupied or held by investors.
• Office refinance: strata suites and whole buildings for professional firms.
• Medical clinic refinance: specialist, dental and allied health premises.
• Hospitality refinance: pubs, hotels, motels, restaurants and venues.
• Childcare centre refinance: centres held by owner-operators or by investors.
• Automotive and transport refinance: dealerships, workshops, depots and service stations.
• Mixed-use property refinance: buildings combining shops or offices with residences.

Talk to a commercial refinance specialist

A refinance is a chance to reset the loan around where the business is today: a lower cost, a term that suits the cash flow, equity put to work, or a clean exit from a private loan. Alongside the rate, three things decide how well the new loan serves you for the years after settlement: the structure across your entities, the lender whose policy matches your business, and the timing against your deadline.

At Ardent Capital Group we know which lenders will consider your property, your documents and your group, and we read the previous and current financials, the entities and the directorships the way a credit team will. With a background in financial planning, the Ardent Capital Group team can map a strategy for how the finance sits across your group, then work with your accountant for the final confirmation. If you are weighing up a commercial property refinance, we would be glad to talk it through.

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.