Commercial property transactions move fast. Vendors have expectations. Contracts have settlement deadlines. And traditional lenders rarely keep pace with the speed that serious commercial buyers need.
A private mortgage for commercial property is a practical, widely used solution for investors, developers, and business owners who need to act decisively. This guide explains how it works, who it suits, and what to expect from the process.
Secured Lending is a fast private mortgage lender in Australia for commercial property. As a private lender in Australia funding from our own capital, our team moves quickly from enquiry to approval to settlement, so your deal doesn't fall over waiting on finance.
What Types of Commercial Property Can a Private Mortgage Fund?
Private mortgage lenders are generally more flexible than banks when it comes to acceptable security. The key criteria is that the property must be real, registered, and realisable. That means the lender needs to be able to sell the asset to recover the debt if required.
Common commercial property types funded through private mortgages include:
- •Office buildings and strata office suites
- •Retail premises and shopping centres
- •Industrial sheds, warehouses, and logistics properties
- •Mixed-use developments combining residential and commercial
- •Hospitality and accommodation assets
- •Development sites with or without planning approval
- •Medical and healthcare facilities
Some lenders have appetite restrictions on certain asset classes. Rural or highly specialised properties may face tighter LVR limits or higher rates depending on the lender's view of liquidity in that market.
At Secured Lending, we assess commercial property security on its merits. We're active across a broad range of asset classes and geographic markets.
Why Borrowers Use Private Mortgages for Commercial Property
There is no single borrower profile for private commercial mortgage lending. The reasons are varied and often strategic.
Speed of Settlement
This is the most common driver. A commercial property opportunity may require settlement in 30, 21, or even 14 days. Bank credit processes simply cannot meet those timelines in most cases.
Private lenders can approve and fund in days. For buyers competing against other parties or dealing with vendors under pressure to settle, that speed is a meaningful commercial advantage.
Credit or Income Complexity
Banks require clean financials, strong serviceability ratios, and straightforward income documentation. Many experienced commercial property investors do not fit neatly into those boxes.
Self-employed borrowers, company structures, trusts, and borrowers with complex tax positions often find bank finance difficult to access, even with substantial assets and a long track record.
Private lenders look at the deal. The quality of the security and the logic of the exit strategy carry more weight than a payslip.
Bridging an Existing Facility
A borrower may be refinancing out of an existing commercial loan that has expired, been called, or is no longer fit for purpose. Private mortgage finance provides a clean bridge to a new long-term facility without the pressure of an immediate refinance deadline.
Explore how bridging finance can keep your transaction on track when timing doesn't align.
Accessing Equity Quickly
Commercial property owners with significant equity can unlock that value rapidly using a second mortgage without disturbing the existing first mortgage lender. The funds can be deployed for business purposes, acquisition deposits, or working capital.
How the Loan Is Structured
A private mortgage for commercial property is typically structured as a short-term facility. Terms commonly range from one month to two years.
Most deals are interest-only for the loan term. This keeps monthly repayments manageable while the borrower executes their exit strategy, whether that is a refinance to a bank, a sale, or the resolution of whatever constraint prevented conventional financing in the first place.
The loan is secured by a registered mortgage over the commercial property. In most cases, private lenders will fund up to 65% to 70% LVR on commercial security, though this varies by asset type and lender.
Where a first mortgage is required and no existing debt is in place, first mortgage finance is the cleanest structure. It gives the lender the primary security position and typically attracts the most competitive rate available in the private lending space.
What Lenders Assess in a Commercial Private Mortgage Application
Private lenders do not apply bank-style credit scoring. But they do conduct a structured assessment. Understanding what they look at helps you prepare a stronger application.
Security value. The lender will require a valuation of the commercial property. This can be an independent formal valuation or, for fast transactions, a desktop or kerbside assessment. The loan amount is determined by the assessed value, not the purchase price.
LVR. The lower the LVR, the lower the risk to the lender. Deals below 60% LVR will generally attract the strongest terms. Above 70%, options narrow and pricing firms.
Exit strategy. This is critical. Lenders want to understand clearly how and when the loan will be repaid. A credible exit, whether it's a bank refinance, a property sale, or business revenue, needs to be documentable and realistic.
Borrower and entity background. Private lenders will conduct basic background checks on the borrowing entity and individuals involved. Adverse findings don't automatically kill a deal, but transparency is important.
Loan purpose. Business-purpose loans for commercial property are assessed under a different regulatory framework to consumer loans. Most commercial private mortgage transactions fall into this category, which gives lenders more flexibility in structuring terms.
"Commercial property moves on confidence and timing. The buyers who consistently win the deals they want are the ones who already know their finance is in place. We work hard to make sure our clients are always in that position."
Gino Tabila, Associate Director, Secured Lending
What You Need to Apply
Private mortgage applications do not require the same volume of documentation as a bank application. But the more organised you are, the faster the process moves.
Typically required:
- •Signed contract of sale or evidence of the transaction
- •Details of the security property including address and title reference
- •Recent valuation if available, or confirmation that a valuation can be ordered
- •Entity structure documents: company or trust details, ACN, ABN
- •Identification for all directors and guarantors
- •Outline of the exit strategy
Some lenders will issue an indicative approval based on a one-page deal summary. The formal approval and documentation follow once the key details are confirmed.
Working with Secured Lending on Commercial Property Finance
Secured Lending has built its reputation on fast, reliable commercial property lending decisions. We understand that borrowers coming to us often have a timeline problem, a credit complexity, or both.
We don't make you wait. Our team assesses deals promptly and gives clear answers quickly. When we approve a deal, we fund it.
If you're looking at a commercial property purchase, equity release, or a bridging situation, speak to our team about a private mortgage for commercial property. You can also explore our investment property private mortgage options if your project spans asset classes.
