How commercial property refinancing works

Refinancing involves replacing your existing commercial loan with a new facility, either with the same lender or a different one.

This may be done to:

  • reduce interest costs
  • release equity
  • restructure debt across multiple facilities
  • extend or reset loan terms
  • improve flexibility or remove restrictions
  • align lending with current business or investment strategy

Unlike residential refinancing, commercial refinancing is more complex and lender-specific.

The outcome depends heavily on how the deal is structured and which lender is selected.

How lenders assess refinancing applications

Refinancing is assessed similarly to a new loan – not simply a rollover of your existing debt.

Lenders will typically review:

  • current loan structure and remaining term
  • property value and updated valuation
  • lease profile (for investment properties)
  • business performance (for owner-occupied properties)
  • borrower financial position
  • servicing capacity (often using interest coverage ratios)
  • loan-to-value ratio
  • property type and marketability

Even if you’ve held the loan for years, a lender may reassess the deal under current policy – which may differ from when the loan was originally written.

Common challenges with refinancing commercial property

Refinancing can be more difficult than expected if not approached strategically.

Common issues include:

  • property value not supporting the current loan balance
  • lease expiry or weaker tenant profile
  • business performance changes since original loan
  • lender policy tightening since initial approval
  • break costs or exit fees
  • existing structure not aligning with new lender requirements
  • cross-collateralised or complex facilities
  • assuming refinancing is automatic with another lender

In many cases, deals that look straightforward can become constrained due to these factors.

How we structure commercial refinancing at Evolve

We assess the existing loan and the broader position before recommending any move.

This typically involves:

  • reviewing current loan structure, rates and terms
  • assessing the property, lease or business performance
  • identifying opportunities to improve structure or flexibility
  • modelling refinancing outcomes across different lenders
  • considering valuation risk and timing
  • restructuring facilities where needed (including uncrossing securities)
  • aligning the refinance with your longer-term strategy
  • avoiding unnecessary refinance costs or failed applications

The goal is not just to refinance – it’s to improve the overall position.

Speak with a broker before refinancing

Refinancing commercial debt without a clear strategy can create unnecessary cost or risk.

Before proceeding, it’s worth understanding:

  • whether refinancing will materially improve your position
  • what your property and loan would look like under a new lender
  • whether valuation or policy changes may impact the outcome
  • how to structure the refinance for flexibility and future growth

A well-structured refinance can strengthen your position. A poorly executed one can limit it.

Speak with Evolve Lending & Finance to review your structure and next steps.