Commercial Finance
Can You Refinance a Commercial Property Loan?
5 min read- Finance Guide
- Updated 2026
Quick answer
Typical refinance LVR range
60% 80%
Of the property's value
- Refinance usually possible Yes
- Owner occupied (best case) Up to 80%
- Commercial investment 65% - 75%
- Common refinance goals Rate, equity, restructure
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1300 421 044
Commercial property refinance is assessed using two main factors
The loan to value ratio (LVR)
The LVR determines the maximum refinance amount as a percentage of the property's current value. Most lenders set a ceiling on this ratio based on property type and risk.
PROPERTY-BASED LIMIT
The business's ability to repay the loan
Lenders assess the business's financial strength — including income, cash flow, trading history, and existing debts — to confirm it can service the refinanced facility.
Business-based limitRefinance LVR — by property type
Most commercial lenders cap refinance amounts to a percentage of the property's value
-
Owner occupied commercial — Offices, retail, industrial Up to 80%
-
Commercial investment — Retail / office investment 65% - 75%
-
Specialised properties — Hotels, service stations, medical 60% - 70%
For example, if a commercial property is worth $1,000,000 and the lender allows a 70% LVR, the maximum refinance amount would be approximately $700,000. If the current loan is lower, there may be potential to release equity.
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Business Financial Strength
Lenders also assess the borrower when reviewing a refinance. They typically review:
Business financial
statements- Profit and loss
history
- Cash flow and income
stability
- Tax returns
- Existing debts
A business with stable income and strong financial records is generally in a better position to refinance.
Rental Income and Lease Strength
If the property is leased, lenders also consider the rental income. Important factors include:
Lease
length- Tenant
strength
- Rental income
compared to loan repayments
Properties with strong tenants and long leases are generally easier to refinance
Refinance Size
Commercial property refinance amounts can vary widely depending on the property value and existing debt.
Typical refinance ranges include:
Smaller Loans
From ~$200,000
Smaller commercial refinance loans
Standard Loans
$500K - Several million
Standard business property refinance
Larger Restructures
Significantly higher
Larger commercial refinance and debt restructures
Each lender has different minimum and maximum refinance limits
Common problems borrowers face
Many Borrowers struggle to refinance commercial property because they do not have enough equity or their existing structure no longer suits lender policy
Insufficent Equity
If the property value has not increased enough or the loan balance is too high, lenders may reduce the refinance amount
Possible solutions include:
-
Paying down
part of the debt
-
Contributing
additional security
-
Waiting for a
stronger valuation outcome
Limited Trading History
Newer businesses may struggle to demonstrate stable income for the new loan
Some lenders prefer businesses with at least two years of trading history
Alternative lenders may still consider newer businesses depending on the overall strength of the refinance
Low Rental Coverage
If the rental income from the property does not sufficiently cover loan repayments, lenders may limit the refinance amount
Improving the lease structure or tenant profile may help
Applying With The Wrong Lender
Different lenders have very different refinance policies for commercial property
Using lenders experienced in commercial refinance can improve approval chances.
Steps to refinance a Commercial Property Loan
Step
01
Review the current loan balance, term, rate and any break or exit costs.
Step
02
Estimate the current value of the property and available equity
Step
03
Prepare business financial documents and tax returns
Step
04
Confirm rental income or business use of the property
Step
05
Submit the refinance application to suitable commercial lenders
Step
06
Once approved, the old loan is repaid and the new facility settles
Speak with a Commercial Refinance Specialist
Commercial property refinance can vary significantly depending on the property value, existing debt, lease profile, and the borrower's financial position.
A specialist can review your position and help determine which lenders may be able to assist.
Speak with a finance specialist about refinancing your commercial property loan.
Submit the short form below and a commercial finance specialist will review your scenario and discuss possible refinance options.
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