Commercial Property Loans Australia

The biggest difference is how the loan is assessed. A home loan runs on largely standardised criteria and a credit score, whereas a commercial property loan is assessed case by case. Lenders weigh the property type, lease structure, tenant covenant, your business cash flow, and the loan purpose, so two borrowers buying similar properties can be offered quite different terms.

The practical differences matter too. Commercial loans typically require a larger deposit of 20% to 40%, run over shorter terms of 15 to 25 years rather than the residential 30, and price on a risk basis rather than a published rate card. In my experience, how the application is packaged has such a bearing on the rate, LVR, and approval that the same deal positioned correctly for the right lender from our 60+ panel can mean a sharper outcome than going direct. You can compare structures across our owner-occupier and investment loan options.

In most cases, commercial property loan deposits range from 20% to 40% of the property value. The exact amount depends on your borrower profile, the lender chosen, and the property type itself. For example, owner-occupier commercial property loans can often access up to 80% LVR, meaning a deposit of as little as 20%, while commercial property investment loans typically require 30% to 40%.

Premium property types such as medical centres can sometimes achieve higher LVRs with the right specialist lender from our 60+ lender panel. Conversely, specialty assets and unusual property types attract lower LVRs and larger deposit requirements.

It's also important to budget for costs beyond the deposit. Stamp duty, legal fees and valuations typically add another 5 to 6% of the purchase price. So for a $1M property, plan for $250,000 to $350,000 in total upfront capital. Use our stamp duty calculator to estimate your specific amount. If you're short on deposit, we can also explore alternatives including residential equity, bridging finance, or vendor finance structures.

The fundamental difference comes down to who occupies the property and how the lender assesses serviceability. With an owner-occupier commercial property loan, your business operates from the premises, and the lender assesses your business cash flow as the primary income source for repayments. With an investment commercial property loan, the property is leased to a tenant, so the lender focuses on the rental income, lease length, and tenant covenant.

This distinction matters more than most borrowers realise. Owner-occupier loans typically offer higher LVRs (up to 80% for strong applications), faster approval, and often slightly sharper rates because lenders view business owner-occupiers as lower risk. Investment loans generally cap around 65% to 70% LVR and place more weight on the property's income-producing capability. As a result, the same buyer purchasing the same property can encounter quite different terms depending on how the deal is structured.

Most income-producing commercial property qualifies, although different categories carry different lender appetites and LVR caps. The most commonly funded include office buildings, industrial and warehouse facilities, medical and consulting suites, retail and shopfronts, mixed-use buildings, and childcare centres. Land acquisitions for future development can also be funded, although on different terms. We have lenders on panel for almost any commercial property type, so even unusual purchases generally have a path to approval.

Beyond the purchase price itself, expect upfront costs of 5 to 6% of the purchase price for most commercial property purchases. Stamp duty is typically the largest single component, and you can estimate yours using our commercial property stamp duty calculator. Other items include legal fees ($3,000 to $15,000), building inspection ($1,500 to $3,000), valuation ($2,000 to $5,000), and loan establishment fees (0.5% to 1% of the loan amount). For a $1M property purchase, therefore, budget approximately $50,000 to $90,000 in additional costs.

Worth knowing: it's often possible to include some of these costs in your loan amount if you have sufficient equity. We always work through the full upfront cost picture with our clients before committing to a purchase, so there are no surprises at settlement.

Commercial property loan rates vary significantly based on the property type, loan structure, location, lease quality, business cash flow, and credit history. For current rates by loan and property type, our commercial property loan interest rates page is reviewed and updated regularly by Nadine. It's worth understanding that two borrowers buying similar properties can end up with quite different rates, depending on how their application is structured and which lender from our 60+ panel is selected. An experienced commercial finance broker can often shave 25 to 50 basis points off the rate a borrower would secure going direct to their bank, particularly for sophisticated structures.

Commercial property loan LVRs typically range from 60% to 80%, depending on property type and borrower profile. Standard commercial investment loans usually max out around 65% to 70% LVR, while owner-occupier loans can reach 80% for strong applications. SMSF commercial property loans cap at around 70% LVR under LRBA rules. Specialty assets and development sites attract lower LVRs.

Loan terms generally run 15 to 25 years, which is much shorter than the residential 30-year norm. Within that, you'll typically have a 3 to 5 year fixed-rate or interest-only period, after which the loan moves to principal & interest amortisation over the remaining term. Use our commercial property loan repayments calculator to model how different terms and structures affect your monthly repayments, and our borrowing capacity calculator to confirm what you can actually borrow.

Not in the sense most people mean, and this is worth understanding before you start. In residential lending, a pre-approval gives you a fairly reliable limit to shop with, because the lender is mainly assessing your personal income against standard criteria. Commercial lending does not work that way: a commercial property loan is approved against the specific property and the income it produces or supports, so no lender can genuinely commit until they can see the actual deal.

What you can get is a pre-qualification, an indicative assessment of your borrowing position based on your business financials, your deposit, and the type of property you are targeting. I use it to confirm the range a client can realistically work within and to flag any issues before they make an offer. The genuine credit decision, though, still depends on the property itself, the lease and tenant where relevant, the valuation, and your business's financials at the time of application. In other words, commercial pre-approval largely exists in name only, so a properly prepared pre-qualification is the more honest and more useful tool. Our borrowing capacity calculator is a good starting point for understanding your likely range.

In many cases, yes. Commercial lending is more flexible than people expect when it comes to credit history, because lenders assess the whole picture rather than relying on a credit score the way residential lenders often do. A past default, a previous arrangement with the ATO, or a difficult trading period does not automatically rule you out. What matters is the context: how the issue was resolved, how long ago it occurred, and the strength of the deal in front of the lender today.

The right approach depends on the severity and recency of the issue. Minor or well-explained matters are often accommodated by mainstream lenders with the right supporting information. More significant or recent issues may call for a specialist or non-bank lender, who price for the additional risk but can still get sensible deals done. The key, as always with commercial finance, is matching your situation to a lender whose credit policy genuinely fits, rather than applying broadly and collecting declines. So if you have a credit issue in your history, tell us about it early. It almost always gives us more options to work with, not fewer. Talk to us about your specific circumstances.

Most commercial property loans settle 4 to 8 weeks from application, although the full range across our 60+ lender panel runs from 1 to 12 weeks depending on loan complexity. A straightforward owner-occupier purchase typically moves faster than a construction loan or development finance. A typical timeline runs roughly: pre-qualification in 1 to 2 weeks with complete documentation, formal approval in 2 to 4 weeks after the property contract is signed, and settlement in 4 to 6 weeks from contract exchange. In urgent situations, some specialist lenders can move to settlement in 2 to 3 weeks using commercial bridging finance.

The single biggest factor affecting approval speed is documentation completeness. Incomplete applications can extend timeframes by 2 to 4 weeks easily. Our process focuses on getting your documentation right from the start, which combined with our lender relationships typically means faster approvals than going direct to a single bank.

Having your documentation ready upfront makes a significant difference to both approval speed and your chances of success. In most cases you'll need two years of business financial statements (profit and loss, balance sheet, and tax returns), recent BAS statements, a copy of the property contract of sale, a current lease agreement if the property has existing tenants, details of any existing loans and liabilities, and identification documents for all borrowers and guarantors.

For construction loans and development finance, you'll additionally need council-approved plans, a fixed-price building contract, and a builder's licence. If you're using business loans alongside the property finance to support working capital, those facilities have their own documentation requirements too.

We help our clients prepare their documentation package correctly for each specific lender, which avoids the delays and rejections that come from incomplete or poorly structured applications. Contact us for a checklist tailored to your specific loan type and circumstances.

Yes, and in fact it's one of the most common ways Australian business owners and investors fund a commercial property deposit. If you have sufficient equity in your home or an investment property, we can structure a cash-out refinance or equity release to free up the deposit funds. The residential and commercial facilities are arranged as separate transactions, often with different lenders. Coordinating sequencing and timing correctly is therefore critical to ensuring your commercial purchase settles smoothly.

This dual-structure approach is something we manage regularly. It's also one of the key reasons why using a specialist commercial finance broker matters. A residential-only broker can't execute the commercial side, and a single bank will only show you their own products on both sides of the deal. Talk to us about whether your residential equity position supports the commercial deal you have in mind.

Commercial property in Australia can be purchased through a range of structures: individual names, a company, a family trust, a unit trust, a partnership, or a self-managed super fund. The structure you choose significantly affects your tax position, asset protection, borrowing capacity, and lender options. For example, some lenders are more comfortable with certain structures than others, so the wrong structure can mean a worse rate, a smaller borrowing limit, or even a declined application.

We assess the right structure for your circumstances before approaching lenders, so your application is positioned correctly from the outset. For SMSF commercial property loans specifically, the rules around limited recourse borrowing arrangements and in-house assets are detailed in the ATO's SMSF borrowing guidance, and specialist advice is essential. For complex structures generally, we work alongside your accountant or solicitor to make sure everything is set up correctly before finance is arranged.