FY27 Freehold Venue Buy: Funding the Bricks and the Trade
Freehold Commercial Property Loan FY27 | Switchboard Finance
Accommodation Finance
Freehold Venue · Commercial Property · Going Concern
FY27 Freehold Venue Buy: Funding the Bricks and the Trade
A freehold accommodation venue is two purchases in one, the bricks and the trade. Here is how a commercial property loan funds both, and what a lender reads first before it lends.
Quick Answer
Buying a freehold accommodation venue funds two things at once: the building and the business that trades inside it. A commercial property loan secures the bricks, while the trade is read on its going-concern valuation, so the facility is sized on the whole going concern, not the property alone.
The freehold loan is not the whole deal
The freehold loan is not the whole deal, because buying a venue is really two purchases at once: the bricks leg and the trade leg. The price you agree covers the bricks leg, the land and building, and the trade leg, the income the venue earns. A commercial property loan secures the bricks, but the contract price reflects the trade as well, so the senior facility has to be sized against the whole freehold going concern, not the real estate on its own.
Buyers who treat the property loan as the deal are usually short on the trade, and that is where an otherwise clean purchase stalls. The building matters, but the lender is funding a trading business that happens to own its premises, and the two legs are priced together.
Two ways into a freehold venue
There are two ways into a freehold venue: buy the freehold going concern outright, or take a leasehold entry and rent the building from a separate owner. The first puts the bricks and the trade on one title and one facility; the second keeps your capital lower but hands the property to a landlord and ties you to a lease.
Neither path is automatically better. The freehold going concern gears higher and gives you the asset, while a leasehold entry needs less capital but leans on the strength of the lease. Our guide to freehold versus leasehold going concern sets out where each one fits an accommodation buyer.
What lenders actually look at first
What lenders actually look at first on a freehold venue is the going-concern valuation, because that figure sets the gearing and decides whether the purchase funds. The valuer reads the trade, the occupancy and the building together and arrives at a single number, and the commercial property loan is then geared against it, not against the contract price. Where the valuation lands under the price, the gap has to be covered.
That is where supporting security earns its place: a second property you already hold lets the lender lend wider, so supporting security lifts gearing and covers the slice the bricks leg will not reach on its own. On the venue files that cross my desk, the distance between the contract price and the valuation is the usual sticking point, not the headline rate. The building itself is a Class 3 accommodation building under the National Construction Code, the standard set by the Australian Building Codes Board, and the valuer reads its condition and compliance as part of the bricks leg.
Where a freehold facility funds cleanly
- The going-concern valuation supports the contract price
- An owner-operator taking both the freehold and the trade
- Around three to five years of clean trading figures
- Supporting security on hand to lift gearing
- A standard Class 3 accommodation building
Where it stalls
- The valuation lands under the contract price
- No supporting security to cover the gap
- Thin or patchy trade history
- A short remaining lease on a leasehold entry
- A single-purpose building lenders read cautiously
Funding the venue cleanly into FY27
Funding the venue cleanly into FY27 comes down to lining up the valuation, the gearing and any supporting security before you sign, not after. The new financial year is a planning window rather than a deadline, so the work is structural: confirm what the going-concern valuation will support, decide whether you are buying the freehold or a leasehold, and identify the supporting security that takes the gearing where it needs to be.
For larger licensed freeholds, the same mechanics sit behind a pub or hotel purchase, where the trade leg carries even more of the value. If you want the wider view of how each accommodation facility connects, the accommodation finance hub maps the options, and you can check eligibility or speak to a broker once you have a venue in mind.
A freehold accommodation venue is the bricks leg and the trade leg bought as one, and the senior facility is sized on the going-concern valuation of the whole, not the property by itself. Whether you buy the freehold going concern or take a leasehold entry, the valuation and any supporting security decide how the deal gears. Line those up before you sign and the purchase completes cleanly going into FY27.
Key takeaway: size the facility on the going-concern valuation of the whole venue, and let supporting security lift the gearing where the bricks leg falls short.Frequently Asked Questions
A freehold going concern in an accommodation venue is the land, the building and the trading business owned and financed as one. A lender values and lends against the whole, not the real estate alone, which is why a buyer leans on the freehold going concern rather than the bricks by themselves. It is the structure most owner-operators use when they want to hold the asset as well as run the trade.
Borrowing against a freehold venue is sized on its going-concern valuation, typically up to around 70 percent, indicative and varies by lender. Supporting security can lift that gearing where the valuation falls short of the price. A commercial property loan is the senior facility that usually sits on the freehold.
Buying the freehold or taking a leasehold is a question of capital and control rather than simply better or worse. The freehold going concern gears higher and gives you the asset and a cleaner exit, while a leasehold entry needs less capital but lends tighter and ties you to the lease term. Our freehold versus leasehold guide walks through where each one fits.
The valuation matters more than the contract price because a lender gears against the going-concern valuation, not the figure written on the contract. Where the valuation lands under the price, the difference has to be covered by cash or supporting security before the deal funds. Reading the going concern carefully up front is what keeps a purchase clean.
Supporting security on a venue purchase lifts the gearing by giving the lender extra property to lend against, usually another asset you already hold. It covers the slice the bricks leg will not reach on its own, so the facility can settle. You can see how a freehold facility is priced and structured in our commercial property loan guide.
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