Who lends on commercial property in Australia now: banks, non-bank lenders and private credit funds compared on terms, speed and exit.
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Commercial Real Estate Debt · Private Credit · Non-Bank Lenders
When a bank says its appetite for your commercial property has changed, who else is lending, and what changes when the money comes from a fund instead of a bank? This is commercial real estate debt, from the borrower's side.
Quick Answer
Commercial real estate debt is the money lent against offices, shops, warehouses and other commercial property, and in Australia it now comes from major banks, regional banks, non-bank lenders, private credit funds and private lenders, each with different terms, speed and exit risks for the borrower. Banks still lend most of it; non-bank lenders, funds and private lenders fill the deals banks price up or decline. Our commercial property loans page covers the lending itself.
Also called: commercial property debt, commercial real estate lending, CRE debt. They describe the same market; a "CRE debt fund" is the investor's vehicle for buying into it, covered once below.
What is commercial real estate debt?
Any loan secured by commercial property counts as commercial real estate debt, and for a business owner the term simply means the market of lenders who might fund your office, shop, warehouse or factory. This post looks at that market from the borrower's side: who will lend to you, on what terms, and what it costs to leave.
Banks still provide most of it. At the time of writing, the Reserve Bank's October 2026 Financial Stability Review puts non-bank lenders at around 6 per cent of Australian financial system assets and private credit at less than 2 per cent (RBA, Financial Stability Review, October 2026). APRA's May 2026 System Risk Outlook puts domestic private credit at around $200 billion, roughly 3 per cent of the size of the banking system (APRA, System Risk Outlook, May 2026). Small shares, but on commercial property deals that do not fit bank policy, those lenders are often the only ones bidding.
Investors also buy this debt, through funds that lend their money to borrowers like you. That side, returns, fees and withdrawals included, is covered in our guide to private credit funds in Australia, not here.
Who lends on commercial property in Australia now?
Five types of lender fund commercial property in Australia now: major banks, regional banks, non-bank lenders, private credit funds and private lenders, and each tends to sit at a different point on loan size, property type and speed.
- Major banks. The largest and usually cheapest source, with the strictest policy on documents, property type and loan to value ratio.
- Regional and second-tier banks. Similar pricing logic, sometimes more appetite for local or regional property and smaller loans.
- Non-bank lenders. Lending businesses that do not take deposits, funded by banks and investors, typically more flexible on low doc and lease doc income.
- Private credit funds. Funds that pool investor money, often structured as a managed investment scheme, and lend on shorter terms, commonly on a first mortgage and sometimes behind a bank as second.
- Private lenders. Individuals or small groups lending on short terms, usually for speed or for a property no one else will take. Our private lending page covers that end.
A fund is not a bank. It answers to its investors, its money has a cost and a time horizon, and that shapes its terms. How non-banks themselves are funded, including warehouse lines and securitisation, is set out in our insight on how non-bank lenders are funded.
Why has private credit grown in commercial property lending?
Private credit has grown in commercial property lending because banks are selective about some loan types, investors want yield, and funds can move faster on deals that do not fit bank policy.
Banks hold capital against every loan, so property they see as riskier, such as construction, specialised assets or short lease terms, costs them more to carry. Funds do not face the same capital rules, and much of their money comes from wholesale investors looking for income above deposit rates. At the time of writing, the RBA's October 2026 Financial Stability Review notes that Australian private credit funds lend mostly against real estate, including construction and development, and that a large developer's insolvency has lifted investor redemption requests and tightened funding for some funds.
In practice, the borrower sees this as more choice for a deal a bank prices up or declines, at a higher price and on a shorter term. The question is never only whether someone will lend, but what that loan looks like when it ends, and whether the fund behind it will still have money to roll or extend it.
How do bank, non-bank and private credit loan terms differ?
Bank, non-bank and private credit loan terms differ most on speed, how the property and income are read, fees, covenants and the exit, and terms vary more between private funders than between banks. Read the table as a pattern, not a rule.
| Question | Major or regional bank | Non-bank lender | Private credit fund |
|---|---|---|---|
| Who it usually suits | Established borrowers with full financials and a mainstream property | Self-employed borrowers on low doc or lease doc income, or a property a bank reads harder | Deals that need speed, a short term or a structure a bank will not do |
| How fast it usually moves | Typically several weeks, varies by lender | Often faster than a bank, varies by lender | Often the fastest on a straightforward deal, indicative |
| How it reads the property and income | Full financials, serviceability and a conservative valuation | Alternative income evidence accepted, policy differs by lender | Weighted to the property and the exit, less to income |
| Term and interest only | Longer terms, interest only usually limited | Medium terms, interest only commonly available | Short terms, typically one to three years, interest only or capitalised, indicative |
| Fees and exit costs | Lower establishment fees, break costs on fixed rates | Establishment fees, sometimes early exit fees | Higher establishment and line fees, exit fees common, indicative |
| Covenants and reporting | Financial covenants and annual reviews on larger loans | Usually lighter, varies by lender | Can be tight, with default interest and review rights in the loan agreement |
| Refinancing out | Usually the end point | Often a step back to a bank once the file improves | Designed to be refinanced or repaid within the term |
A quick way to sort a deal is to ask whether it suits a bank or a private funder:
Suits a bank
- Full financials, lodged and current
- Mainstream property in a solid location
- A long lease to an established tenant
- No settlement deadline pressure
Suits a private funder
- Settlement in days, not weeks
- A property banks will not take, or a short lease
- A short-term need with a clear repayment plan
- Paying more is worth it to keep the deal alive
Pricing across the market is covered in our commercial property loan rates insight, and the wider bank and non-bank split for self-employed borrowers in our non-bank lender vs bank comparison.
What are regulators saying about commercial property lending and private credit?
Regulators are watching private credit and commercial property lending mainly for valuation practices, transparency and how losses would flow if property values fall. Both the RBA and APRA describe private credit as small next to the banking system, and both track it in their stability reports.
ASIC's September 2025 review of private credit (Report 814) found valuation practices and disclosures inconsistent across funds, and in June 2026 ASIC called on private credit funds to make sure their asset valuations are timely and robust. That work is aimed at investor protection, but it matters to a borrower too. A fund's valuation drives your loan amount, your covenants can be tested against later valuations, and a fund under pressure from its own investors may be less patient when your loan falls due.
For a borrower, the practical risks are a lower valuation at review, a covenant breach that triggers default interest, and a refinancing that takes longer than the term allows.
What should a business owner check before borrowing from a private credit fund?
Before borrowing from a private credit fund, a business owner should check who the funder is, how it is funded, the term and the exit, the cost of leaving early and the default terms. The deals that go wrong rarely fail on the rate; they fail on the exit.
- Who you are dealing with. Is it the fund, its manager or a lender acting for it, and who signs the loan agreement?
- How the money is raised. Ask how the funder is funded: committed capital, investor money that can be withdrawn, or a bank line behind the fund.
- The term and the exit. The exit is the term that matters most. Know whether you will repay from a sale, a refinance back to a bank or a stronger set of financials, and how long each realistically takes.
- Refinancing back to a bank. Ask what a bank would need to see at the end of the term, and start building that file early.
- Fees to leave. Establishment, line, exit and early repayment fees, all in writing.
- Default terms. What triggers default interest, what review rights the funder has, and what personal guarantees you are giving.
If you are weighing a fund against a bank or non-bank, check eligibility first so you know which doors are open. The approval path itself is covered in our guide to how commercial property loans work. If you are reading this as a potential investor rather than a borrower, see our private credit investment due diligence guide instead.
Commercial real estate debt now comes from five broad sources: major banks, regional banks, non-bank lenders, private credit funds and private lenders. Banks remain the cheapest and largest, non-banks read self-employed files more flexibly, and private credit funds and private lenders trade price for speed and structure. Regulators are watching private credit for valuation and transparency, and some funds have seen funding tighten. For a borrower, the comparison that matters is the exit: how and when you will refinance or repay, and what it costs to leave.
Key takeaway: Before you sign with a private funder, know who funds them, what it costs to leave and how you will refinance back to a bank.Frequently Asked Questions
Commercial real estate debt is money lent against commercial property such as offices, shops, warehouses and factories. In Australia it is provided by major and regional banks, non-bank lenders, private credit funds and private lenders, and for a business owner it is simply a commercial property loan seen as a market. Investors also buy exposure to it through debt funds.
Private credit is not quite the same as a non-bank lender, although both lend outside the banking system. A non-bank lender is usually a lending business funded through bank warehouse lines and securitisation, while a private credit fund pools investor money and lends it directly. Our insight on how non-bank lenders are funded explains the difference.
Where banks are lending less on commercial property, it is usually on particular loan types, such as specialised assets, short leases, construction or low doc files, because those loans cost them more capital to hold. Mainstream, well-leased property is still widely bank funded. Our non-bank lender vs bank comparison shows where the line usually falls.
Borrowing from a private credit fund carries more risk for a business owner than a bank loan, mainly because terms are shorter, fees are higher and default terms can be tighter. The biggest risk is usually the exit: being unable to refinance or sell before the term ends. Read the loan agreement with your solicitor, and see our insight on a private mortgage fund funding your loan for how these loans are structured.
Refinancing a private credit loan back to a bank is a common exit, provided the reason the bank declined in the first place has been fixed by the end of the term. That might be lodged financials, a renewed lease or completed works. Our guide to refinancing a commercial property loan sets out the sequence, and refinancing costs should be planned from day one.
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