Commercial Land Loans

You don't need a DA to borrow, but in my experience nothing else moves a land deal as much. Approved sites get the highest LVRs and the sharpest rates, because the lender can see exactly what gets built and how the loan gets repaid.

Land without approval still funds, it just sits with fewer lenders and prices higher. I've placed deals where a specialist lender structured the loan to lift the LVR once approval came through. What every lender wants, DA or not, is a clear path to either construction finance or sale. If you're weighing up which growth corridors are worth holding in, our Brisbane market insights track where demand and yields are heading.

Maximum LVR on commercial land runs to around 50% - 65%, well below what a built, income-producing property attracts. Vacant land earns nothing and is harder to value, so lenders hold back more.

Where you land in that range comes down to a few things I look at on every deal:

• DA-approved or commercially zoned sites sit at the top of the range
• Land awaiting approval or needing rezoning sits lower
• A near-term exit, rolling to construction or selling, lifts what lenders will offer

The calculator higher up this page works out your loan and deposit once you set the land status. Stamp duty on the land is usually the first big cost on top, so it's worth running our commercial property stamp duty calculator early to size the full cash you'll need at settlement.

Contamination affects a land loan but rarely kills it. Lenders expect a Phase 1 environmental site assessment on commercial land, and order Phase 2 testing if the first report flags a risk.

I've settled sites with manageable contamination where the deal held together because the buyer brought a remediation plan and a cost estimate to the table. Heavily contaminated land that needs major clean-up moves to specialist private lenders at higher rates and lower LVRs. My advice is always to get the environmental reports moving early in due diligence, because the findings feed straight into both your LVR and your rate, and they take longer to come back than people expect.

Commercial land typically needs a 35% - 50% deposit, more than you'd put down on a built commercial property. The larger contribution reflects the higher risk lenders carry on vacant land with no rental income behind it.

It doesn't all have to be cash, and that's where I spend a lot of time on land deals. Lenders accept equity in property you already own, and on stronger files I've used director guarantees or a joint-venture partner's contribution to get the deposit there. DA-approved land in a growth corridor sits at the lighter end of the range, vacant land without approvals at the heavier end.

Yes, and on land you often need to. Because the site earns no income, most buyers capitalise the interest, the lender adds it to the loan balance rather than charging you a monthly payment, so you carry no out-of-pocket cost while you hold.

The trade-off I always walk clients through is that capitalised interest compounds, so your balance grows the longer you hold. Most non-bank and specialist lenders offer full capitalisation; the Big 4 are more likely to cap the period or want outside income. The cleanest structure capitalises interest until you roll into a development loan or construction finance, then resets on the new facility.

Commercial land loans run short, typically 12 to 36 months. They bridge the gap between buying the site and your exit, they are not a long-term hold.

If your plans run longer than the term, I'd much rather have that conversation upfront than at expiry. The longer you hold, the more capitalised interest stacks up, which is exactly why I work backwards from your exit before settling on a term.

The exit is the first thing a land lender looks at, because the loan is short and has to be repaid in full at the end of the term. In my experience a vague exit is the single most common reason a land deal stalls. The strongest exits come with evidence behind them:

• Roll into construction finance, supported by a preliminary lender position
• Subdivide and sell lots, supported by a feasibility study
• Sell the site to a developer, supported by comparable sales

"We'll hold and refinance later" is not an exit a lender can price. The work I do upfront is turning your plan into the documented exit the credit team needs to see, before the file goes anywhere near a lender.

A commercial land loan funds the site itself, getting you onto the land and carrying you while approvals and plans come together. Development finance funds the whole project end to end, the land, the build and the sell-down, assessed on the project's feasibility.

Most of the buyers I work with run them in sequence: a land loan to secure and hold the site, then a refinance into development or construction finance once the build is ready to start. I'll map both facilities upfront so the transition is planned, not a fresh application under time pressure with a settlement date bearing down on you.

The eligibility check and the calculator higher up this page give you a fast read in under a minute, your likely loan, the deposit you'll need, and the interest you'd carry across the hold.

For a read on your actual site, factoring in the zoning, the DA status and your exit, call me on [sbp_phone] or book a free consultation. As commercial loan brokers, we've arranged over $550 million in commercial finance for 3,300+ Australian businesses. A land loan is one of our commercial property loans, and our commercial property resource centre has the calculators, guides and market data if you're still researching. If you're weighing up the tax treatment of holding and developing land, the ATO property and construction guidance is worth reading before you go to market.