Buying Your Next Commercial Premises Before the Old Ones Sell
How an Australian business owner funds the next commercial premises before the old ones sell, what the lender secures, and what GST does to the numbers.
Property Lending Hub
Commercial Premises · Buy Before Sell · Private Funding
You found the right building and your current premises have not sold. Here is what a non-bank or private lender will actually fund, what it secures, and where GST changes the number that reaches the table.
Quick Answer
An Australian commercial buy before sell is funded by non-bank and private funders against both properties at once, sized on the combined debt and repaid when the outgoing premises sell. The evidenced exit strategy, not the equity, is what decides it. See commercial bridging finance.
Part of the guide to private bridging for business, alongside bridging finance guide.
Also called: buy before sell facility, short term commercial property loan.
Why is a commercial buy before sell harder than the residential version?
From the underwriter's seat a commercial buy before sell is a liquidity question rather than a timing one, because the outgoing asset has a smaller buyer pool, a longer marketing campaign and a value that moves with the lease and the land use rather than with the house next door. A residential funder can test a sale against recent comparable results in the same street. A commercial funder is testing a building that may be the only one of its kind in the precinct, bought by a business that has to want that floor area, that clearance height and that zoning.
That difference changes what gets underwritten. The valuer's basis is doing more work, the marketing period is longer, and the buyer is usually another trading business whose own finance has to land before your money does. Add GST, which does not touch most Australian home sales but sits across most commercial ones, and the net proceeds that repay the facility are no longer the contract price.
The difference is not presentation. The residential version of this question is about timing and the commercial version is about liquidity. A funder is not asking whether the outgoing premises are worth the number. It is asking who, realistically, buys them inside the term. The private funding guide for business borrowers sets out how that test is built, and this post is the commercial premises case of it.
Australian funders write this structure as commercial bridging finance, as a short term commercial property loan, or simply as a buy before sell facility, and the three names describe the same thing.
Which property does the lender take security over when both are commercial?
In an Australian commercial buy before sell the funder takes security over both properties, not one. The incoming premises are the reason the money is being advanced and the outgoing premises are the reason it gets repaid, so a funder that holds only one of them is holding half a transaction.
| Security taken | What the funder registers | On what basis |
|---|---|---|
| Incoming premises | First registered mortgage | The advance funds this purchase, so it is the primary security |
| Outgoing premises | Registered mortgage, first or second position | The sale is the repayment event, so the funder needs to control the discharge |
| Borrowing entity | Company or trustee borrower, with directors and trustee as guarantors | Commercial premises are rarely held in personal names |
| Trading business | General security agreement over the operating entity | Taken where the business trades from either building |
| Lease income | Assignment of lease or of rent | Taken where the outgoing premises are tenanted rather than owner occupied |
| Insurance | Policies noting the funder's interest on both buildings | Standard on any Australian commercial security, checked before funds move |
Two consequences follow. The first is that both buildings are assessed, so a problem on the outgoing premises can stop a purchase that looked clean on its own. The second is that the structure only works where a funder is willing to take the second building on a genuinely short horizon, which is the ground private lending occupies rather than the term commercial market. The instrument itself is a short term loan, and it is written to be refinanced or repaid, never to be lived in.
How is the loan to value measured when the outgoing premises are owner occupied or vacant?
Loan to value on an Australian commercial buy before sell is measured across both securities combined at the peak of the debt, and the basis of value changes when the outgoing premises are owner occupied or empty. Property by property percentages are not how the facility is sized, because at the peak the funder is exposed to both buildings at the same time.
The basis of value is the part borrowers do not expect. Where the outgoing premises are leased to a third party on a real lease, a valuer can report an investment value built on the rent and the covenant. Where the business occupies its own building, or where the building is empty because the business has already moved, that investment value is not available and the report lands on a vacant possession basis instead. The two figures are not the same, and a funder sizes to the lower one.
The number that decides this file is not the percentage but the valuer's basis and the marketing evidence behind it. Published positions in the Australian private market typically sit well below the residential equivalent, and land in an indicative band of around 65 per cent to 80 per cent of combined value depending on the asset and the funder, with the higher figures measured on the peak of the debt rather than on the incoming purchase alone. Where the outgoing building is leased, the tenancy itself becomes part of the credit story, and buying the commercial premises you already lease covers the mirror image of that. For how the lane is structured overall, the Australian bridging hub guide is the parent unit.
What does GST do to the money that actually reaches the table?
GST reduces the proceeds that reach the facility on the way out and can increase the cash an Australian business needs on the way in, because a commercial property sale by a GST registered seller is usually a taxable supply while a home sale is not. Two positions change that, the going concern concession and the margin scheme, and both turn on the contract and on facts that a broker cannot determine, as the ATO sets out in its guidance on GST and commercial property. The mechanics of GST at the point of transfer, including where an unpaid liability stops a transaction from completing, belong to the guide on unpaid GST and ATO debt blocking a commercial transfer, so the only point to carry into a funding conversation is this one: give the funder the GST treatment in writing from your registered tax agent before the net proceeds figure goes into the exit calculation, because if the treatment is wrong the shortfall lands on the facility and not on the spreadsheet.
The arithmetic is worth doing before the exit is set. Take an illustrative outgoing premises selling at $2,200,000 as a taxable supply by a GST registered vendor. One eleventh of the price, roughly $200,000, is GST rather than proceeds. Selling and marketing costs of around 2 per cent take approximately $44,000 more, and the facility is repaid from what is left, closer to $1,956,000 than to the headline $2,200,000. Size the facility against the lower figure. The numbers above are illustrative only and the treatment varies with the contract, any concession claimed and your own tax position.
How long do commercial premises take to sell, and what term does that need?
Commercial premises in Australia typically take longer to sell than a house, so the term is sized to the campaign and the transfer of title, not to the offer you hope arrives in week two. A term chosen off an optimistic sale date is the single most common structural error in this lane, because the cost of being wrong is an extension negotiated from a weak position rather than a term priced up front.
| Funder | Published term | Published loan to value | Published facility size | Also published |
|---|---|---|---|---|
| Assetline Capital | Up to 24 months | Up to 80%, measured on peak debt | $150k to $10m | Assessment within approximately 72 hours |
| Funding.com.au | 1 to 36 months | Typically 65%, and 70% on occasion | $25k to $10m | Individuals, companies or trusts, any purpose |
| Pallas Capital | On application | Up to 75% | On application | Commercial investment terms per its June 2026 guide |
| Maxiron Capital | On application | Up to 75% | On application | Commercial purposes only |
| Aquamore | 1 to 36 months | 60% in its published case study | $300k to $7.5m | Case study basis rather than a published policy maximum |
Source: each funder's own published material, read as at 14 September 2026. Published positions are indicative and change without notice. Panel access varies, so not every funder that publishes a position is accessible on any given file, and placement is confirmed deal by deal rather than assumed from a table. Where a funder does not publish a figure it is shown as on application and is not estimated here.
The practical reading of that table is that the outer terms are long enough for a real commercial campaign, and that the shortest options are not built for one. Where the incoming premises are being bought off market or under a compressed timetable, the term still has to cover the outgoing campaign, which is why buying your premises from your landlord and a buy before sell can look similar and price very differently. What an extension costs, and how interest is charged across the term, sit in the term sheet rather than here.
Across the Australian market the same facility is described as a commercial bridge, as buy before sell finance, or as short term commercial property funding, and the term you are quoted matters a great deal more than the label it arrives under.
What gets a commercial buy before sell bridge declined?
A commercial buy before sell is declined on the exit far more often than on the equity, and in the Australian private market a file with plenty of equity and a thin sale story loses to a file with less equity and a signed campaign. The equity question is answered by a valuer in a fortnight. The exit question is answered by the borrower, and most declines are a borrower who has not answered it.
The recurring reasons sit in a short list. There is no agency agreement and no live campaign on the outgoing premises, so the sale is an intention rather than a process. The price the borrower has in mind is not supported by evidence a valuer or an agent will put in writing. The building has a specialised fitout, a contamination history or an environmental obligation that narrows the buyer pool to almost nobody. The GST treatment is assumed rather than confirmed, so the net proceeds are overstated. The entity structure does not match the title, which happens more often than it should where a trust holds one building and a company holds the other. Or the term is set to the hoped-for sale date instead of the realistic one.
From the underwriter's seat, none of those is fatal on its own if it is disclosed early and evidenced. What is fatal is discovering it at the valuation stage, when the incoming purchase already has a date on it. Where the existing lender stays in place behind or in front of the new facility, the structure changes again, and whether the bridge can sit with a different lender to your existing mortgage is the next question most borrowers ask. State duty on the incoming purchase is a separate timing question again, covered in commercial property stamp duty and the EOFY window.
The file that funds
- Agency agreement signed and the campaign already running
- Valuations instructed on both properties before the offer is made
- GST treatment confirmed in writing by a registered tax agent
- One borrowing entity across both securities, or a clean guarantee structure
- A term set to the realistic campaign, not the hoped-for sale date
The file that stalls
- Outgoing premises not yet listed, with a price expectation and no evidence
- Lease over the outgoing building ending inside the facility term
- Trust holding one property and a company holding the other, undisclosed
- Net proceeds calculated on the contract price with no GST line
- An exit described as a refinance with no lender named and nothing tested
Where the gap is a build rather than a sale, the shape of the facility is different and the exit is a claim rather than a buyer, which is covered in bridging finance for builders between build stages. And where the plan is to keep the incoming premises long term, the exit is not a sale at all but a refinance into a commercial property loan, which is a cleaner exit for an Australian funder to underwrite than a market sale.
Buying the next commercial premises before the old ones sell is an evidence problem wearing a finance problem's clothes. An Australian non-bank or private funder will take both buildings, size the facility across the pair at the peak of the debt, and price the term against how long the outgoing campaign realistically runs. What decides the answer is the quality of the sale evidence, the valuer's basis on an owner occupied or vacant building, and a GST position confirmed in writing rather than assumed.
Key takeaway: get the agency agreement, the price evidence and the GST treatment in writing before you commit to the incoming purchase date, because the exit is what the funder is actually buying.Frequently Asked Questions
You can get a bridging loan on commercial property in Australia, and it is written by non-bank and private funders rather than by the major banks. The funder takes security over the incoming and the outgoing premises, sizes the facility on the combined debt at its peak, and is repaid when the outgoing premises sell. Approval turns on the strength of the evidenced sale, not on the equity alone. See commercial bridging finance for the definition used across this lane.
GST is commonly payable when an Australian business sells its old commercial premises, because a sale by a GST registered seller is usually a taxable supply. Two positions change that, the going concern concession and the margin scheme, and both turn on the contract and on facts a broker cannot determine. Confirm the treatment with a registered tax agent before you rely on a net sale figure. The guide on unpaid GST and ATO debt blocking a commercial transfer covers an unpaid liability at transfer.
The old premises do not have to be vacant before an Australian lender will count the sale, and in many cases a tenanted building sells faster than an empty one. What the funder tests is whether the evidence supports the price and the timeframe, so a signed agency agreement, a live campaign and comparable evidence matter more than occupancy. Vacancy only becomes a problem when it narrows the buyer pool or drags the valuation to a vacant possession basis. The exit strategy entry sets out what evidence a short term funder accepts.
A bridging loan can fund a warehouse or factory purchase before the old site sells, and industrial stock is the most common security type in this lane across Australia. The funder will want the purchase contract, the outgoing sale evidence and a clear view of any contamination, remediation or specialised fitout that could narrow the resale market. Where the incoming building is a long term hold for the business, the exit is often a refinance to a term commercial property loan rather than a sale.
The loan to value ratio across two commercial properties is measured on the combined security at the peak of the debt, not property by property, and it typically lands in a materially lower band than the residential equivalent. Published positions vary, with several Australian private funders stating up to approximately 65 per cent to 80 per cent depending on the asset. The valuer's basis, vacant possession or investment value, moves the number as much as the headline percentage does.
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