Lenders ultimately want to ensure the loan is viable, which means they place strong emphasis on the quality and reliability of tenants — particularly those with a proven track record of paying rent consistently.

At one end of the spectrum, some lenders will only consider properties with long-term, blue-chip tenants who present minimal risk. At the other, some are prepared to fund assets occupied under shorter-term licences to occupy, where tenants have permission to trade from the premises but without a formal long-term lease.

Lenders will assess how long each tenant has been in place and their financial stability. Both lender and borrower aim to avoid large units that could fall vacant if a tenant leaves or becomes insolvent.

The ability to quickly re-let any vacant space is key. Valuers will typically estimate the expected timescale for re-letting, review the owner’s track record of doing so, and factor in any likely rental incentives — such as rent-free periods or contributions to tenant fit-outs.

For properties with multiple tenants, lenders may also calculate an average lease term across all occupiers. This figure can influence both the loan structure and the term a funder is willing to offer.