Owner-Occupier Commercial Property Loans

It is finance for a property your own business will operate from, rather than one you buy to lease to a third party. You are the borrower and your business is the tenant. Because the lender can see who occupies the premises and how the loan is serviced, it treats the deal as lower risk than an investment purchase, so owner-occupiers are usually offered a higher LVR and a sharper rate.

Most owners we help have spent years paying rent and want to stop building someone else's equity. If your business uses the majority of the floor space, you qualify.

Yes. It is the line that decides whether your loan is priced as owner-occupier or as investment, and it turns on your business occupying at least 51% of the floor space.

Meet it and you access owner-occupier terms; fall below it and the lender reassesses the deal as an investment, which lifts the rate and lowers the LVR. You can still buy bigger than you need and lease out the surplus. We simply present the occupied and leased portions correctly and confirm the split against each lender's policy before you sign, so your owner-occupier pricing holds.

Owner-occupiers are treated more favourably, because lenders see your own business as a known, lower-risk tenant. In practice that shows up in three places:

• Higher LVR. You can borrow to 80%, where investors are often capped lower.
• Sharper rate. Owner-occupier pricing typically sits below the investment rate on the same property.
• Serviceability. We prove the loan on your trading income, not on a third-party tenant's lease.

If you are still choosing between occupying and leasing, our investment commercial property loans page covers the investor route, and our commercial property loan types overview compares every structure side by side.

Plan for a deposit from 20% of the property value, with the full range running 20% - 40% depending on the property and your trading history. Standard premises in strong locations sit at the lower end, while specialised or harder-to-resell properties sit higher, because the lender wants more equity behind them. The stronger your business numbers, the closer you get to that minimum.

Up to 80% of the property value for most owner-occupiers, with the full range running 60% - 80% across different deals. You reach the top when your business has a solid trading history and the property is standard and easily resold; the LVR steps down for newer businesses and specialised premises. The reason you get there at all is occupancy, because your own business uses the building, lenders extend more than they would to an investor buying the same one.

It comes down to two numbers: what the property is worth, and what your business can comfortably service. We work from both, applying the LVR your profile supports and testing the repayment against your trading income.

For a quick read, the borrowing capacity calculator on this page estimates your loan, deposit and monthly repayment in seconds, or to calculate repayments and yields visit our commercial property resource centre. For a number tied to the actual property, it is quicker to talk it through with us.

They currently range 6.25% - 10.20%, and where you land depends on your business profile, the property and your deposit. As a rule owner-occupiers price better than investors, since your own business in the building is a lower-risk proposition for the lender.

We test the live rate across the panel rather than taking one lender's number, because the same deal can be priced very differently from one to the next. For current pricing across every loan type, see our commercial property interest rates page.

Beyond the deposit, budget for the usual transaction costs:

• Stamp duty, calculated on the price and varying by state. Estimate yours with our stamp duty calculator.
• Legal and conveyancing fees for the contract and settlement.
• Valuation and lender fees, which we confirm up front.
• GST, which can apply unless the sale qualifies as a going concern.

Together these usually add a few percent to the price, so we build them into your cash position from the start, rather than leaving you short in the final weeks before settlement.

Part of it, usually. Fixed fit-out that becomes part of the building, such as partitions, flooring, plumbing or a basic refurbishment, can often be rolled into the property loan, because it adds to the value of the asset securing it. Loose fit-out and big-ticket equipment, the machinery, vehicles and specialist gear you could take with you, sit better on their own facility.

The reason is the term. A 25-year property loan stretches the cost of equipment well past its working life, so you would be paying interest on it long after it is worn out or replaced. Equipment finance matches the term to the asset and prices it directly, which is normally the cheaper route. We arrange both sides together so the property and the equipment each sit where they cost you least.

A few are worth knowing, though the detail sits with your accountant. On the way in, GST may apply unless the sale is structured as a going concern, in which case it can be GST-free. Across the loan, interest on an owner-occupier commercial property loan is generally deductible against your business income. And on the way out, the small business capital gains tax concessions can be valuable if you qualify.

How these land depends heavily on how you hold the property, so we always suggest confirming the specifics with your accountant and checking the current rules on the ATO website. Our part is making sure the finance structure supports whatever ownership setup you and your accountant settle on. This is not tax or financial advice; speak to your financial adviser before making any decisions.

Often, yes, depending on the lender and the deal. Interest-only periods are available on many owner-occupier loans, usually at a small premium of around 0.15% - 0.30% over the principal-and-interest rate, and they can ease cashflow in the early years. Offset and redraw are less common on commercial lending than on home loans, though some lenders offer them.

If it is really short-term cashflow you are smoothing rather than the purchase itself, working capital finance or one of our other business loans may fit better than reshaping the property loan. We will tell you which lever actually solves the problem.

Less than most people expect, and we hand you a tailored checklist after the first conversation. Broadly there are two sets.

About your business:

• Two years of financials and tax returns, plus recent BAS
• Your business structure and any partners or directors
• Recent business bank statements

About the property:

• The contract of sale, or property details if you want pre-approval
• Any existing leases, if part of the space is tenanted
• An independent valuation, which we coordinate

The exact list shifts with the lender and your situation, which is why we tailor it rather than hand over a generic pile.

Most settle within 4 to 8 weeks of a formal application, and pre-approval can come through in a few days when your documents are ready at submission. Owner-occupier deals often move faster than investment ones, because serviceability is clearer when your own business is the tenant. The delays that bite are nearly always documentation, financials that are out of date or a valuation that lands short, so getting the paperwork straight before you apply usually saves a week or two.

For many owners the maths favours buying once equity is in the picture: rent leaves your business for good, whereas repayments build an asset you control, with no landlord lifting the rent at review.

That said, it genuinely varies with the property, the rate and how long you plan to stay put. Our buy-versus-rent calculator compares the two on your own figures, and to see what current market conditions look like before you decide, take a look at our commercial property market overview. We are happy to sanity-check the result with you before you commit either way.

The quickest way is the eligibility check above. It takes about a minute and reads the factors lenders weigh most, your deposit, trading history, profitability, the property and your credit position, then returns an instant indication.

For a proper, deal-specific answer, call us on 1300 262 098 or get in touch through our contact page. We have arranged more than $550 million in finance for over 3,300 Australian businesses across the commercial property loans we handle, and we will tell you honestly whether your deal stacks up before you spend time on it.