Vacant Commercial Property Loans

Banks assess commercial property loan serviceability against rental income. A vacant asset produces no income, which means no bank serviceability calculation can pass, regardless of how strong the asset or the borrower may be. That is a policy constraint, not a credit judgement. Private lending sits outside that framework. We assess the security value, the borrower entity, and the exit strategy, not the income stream from a vacant building.

Who This Is For

• •Pty Ltd companies purchasing vacant commercial premises they intend to occupy for business operations
• •Family trusts and unit trusts acquiring vacant commercial property for re-leasing or value-add repositioning
• •Investors purchasing vacant commercial assets at a discount, with a clear re-letting or sale plan
• •Borrowers whose tenanted property has become vacant during the loan process and the bank has withdrawn approval
• •SMSFs purchasing vacant business real property the member's company intends to occupy
• •Purchasers in time-critical settlements where the vacancy has caused a bank to withdraw or delay
• •Not available to natural persons borrowing in their personal name
• •Not available for residential property or any NCCP-regulated consumer lending

How We Assess Vacant Commercial Property

Our assessment centres on three elements: the security value of the vacant property as determined by our in-house valuers, the borrower entity's capacity to hold the asset and service the loan during the term, and the exit strategy. We do not require a lease to be in place before we can make a credit decision. For owner-occupiers, the exit is typically the borrower settling into the property and refinancing to a long-term lender. For investors, the exit is typically re-leasing and refinancing, or sale.

LVR for vacant commercial property is assessed against the vacant possession value, not an income-capitalisation value. In some cases, particularly strong industrial or retail assets in high-demand locations, the vacant possession value closely tracks the tenanted value. In thinner markets, the LVR may be assessed more conservatively. Our valuers assess each asset directly.

Submit your scenario with the property type, location, proposed LVR, and your intended use or exit plan. Same-day indicative response. Letter of offer within 24 hours of agreed terms. Settlement from 24 to 72 hours for clean deals.

Three Vacant Commercial Property Scenarios We Have Recently Helped

A Pty Ltd company identified a vacant freestanding retail premises in a suburban Melbourne strip. The prior tenant had vacated at lease end. The purchase price reflected the vacancy discount. The company intended to operate its own retail business from the premises. No bank would assess serviceability without a lease. We lent on the asset quality and the company's operational plan. Loan: $1.4 million, first mortgage, 65% LVR, 9-month term.

A family trust was purchasing an industrial unit in a Western Sydney estate where the vendor's tenant had given notice mid-sale. The trust's bank withdrew conditional approval two weeks before settlement, citing vacancy. We stepped in with a 12-month facility, assessed on the unit's location and the trust's ability to re-lease or sell within the term. Loan: $2.2 million.

An SMSF trustee company purchased a vacant office suite in a professional precinct. The member's accounting practice intended to occupy the space as business real property. The superannuation fund's bank required a signed lease from the member's company before it would proceed, creating a circular requirement. We funded the acquisition under the LRBA structure and the member's company took occupation within the month. Loan: $780,000.

Speed and Process Advantage

We hold direct credit authority and use in-house valuers who can assess vacant commercial property on its physical merits rather than income multiples. No external committee. Indicative position the same day you submit a scenario. Letter of offer within 24 hours of agreed terms. Settlements from 24 to 72 hours for clean deals. For borrowers who have lost bank approval due to vacancy, or who are purchasing a vacant asset in a time-critical settlement, our process runs where bank processes cannot.

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