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Commercial Property Loans in Australia
Buying commercial property in Australia opens doors. Whether you’re securing premises for your growing business, investing in retail space for rental income, or purchasing an industrial warehouse, commercial property loans make these opportunities accessible without depleting your entire capital.
Unlike residential mortgages, loans for commercial property operate under different rules. Deposits are larger, assessment criteria are stricter, and lenders scrutinise the property’s income potential as much as your personal finances. The lending landscape is complex, with dozens of lenders each having unique appetites for different property types and borrower situations.
That’s precisely where Selectabroker changes the game.
✔️ Matched with a broker specialising in your property type
✔️ Access to 50+ lenders
✔️ Expert navigation through complex commercial lending requirements
✔️ Zero cost to you – lenders pay broker commissions
✔️ Coordination between your broker, accountant, solicitor, and other professionals
Whatever commercial property you’re pursuing, we’ll find the specialist broker who can secure the right loan for commercial property purchases. Book your free 15-minute consultation for targeted expertise.
What is a Commercial Property Loan?
A loan for commercial property is finance secured against non-residential property. These loans fund the purchase, refinance, development, or equity release of commercial real estate.
Key characteristics that define commercial property loans:
- Purpose: Acquiring business premises, investment properties, or development sites
- Security: The commercial property itself serves as collateral
- Borrowers: Business entities, investors, self-managed super funds, or individuals
- Property types: Retail, office, industrial, warehouse, hospitality, medical, mixed-use
Loans for commercial property work differently from home loans. Lenders assess the property’s income-generating capacity, existing or potential lease agreements, and the borrower’s business strength. Personal income matters, but the property’s commercial viability often carries equal or greater weight.
Common uses include:
- Purchasing premises to operate your business (owner-occupier)
- Buying investment property to lease to tenants
- Refinancing existing commercial property for better rates or equity access
- Developing or constructing new commercial buildings
- Expanding business operations through property acquisition
The fundamental difference? Residential loans focus heavily on personal income and living expenses. Commercial property loans evaluate business financials, rental yields, property location, tenant quality, and market conditions for that specific property type.
Types of Commercial Properties You Can Finance
Loans for commercial property are available across all major property categories. Each type has unique lending considerations and specialist lenders who prefer specific sectors.
Retail
- What’s included: Shopfronts, shopping centres, food courts, standalone stores
- Lending focus: Tenant mix, foot traffic, location, lease terms
Retail property lending considers a location’s commercial viability, surrounding competition, and the strength of tenant covenants if leased.
Office Buildings
- What’s included: Commercial office buildings, professional suites, co-working spaces
- Lending focus: Occupancy rates, tenant quality, building grade, location desirability
Office property valuations fluctuate based on local employment markets and corporate leasing trends.
Industrial Properties
- What’s included: Manufacturing facilities, factories, light industrial units
- Lending focus: Zoning compliance, structural integrity, environmental assessments
Industrial loans often require environmental reports and compliance certifications that other property types don’t.
Warehouse and Logistics
- What’s included: Distribution centres, storage facilities, logistics hubs
- Lending focus: Access to transport routes, ceiling heights, loading dock capabilities
Warehouse lending has grown significantly with online retail expansion, making this sector particularly active.
Mixed-Use Properties
- What’s included: Buildings combining commercial and residential components
- Lending focus: Income from both commercial and residential tenancies, zoning complexity
Mixed-use properties require lenders comfortable with both commercial and residential lending criteria.
Medical and Professional Suites
- What’s included: Medical centres, dental practices, pathology labs, specialist clinics
- Lending focus: Tenant covenants, fit-out quality
Medical property is often viewed favourably by lenders due to stable, long-term professional tenants.
Hospitality Properties
- What’s included: Hotels, motels, pubs, licensed venues, restaurants
- Lending focus: Trading history, licenses, location, tourism factors
Hospitality lending is more specialised, as not all commercial lenders operate in this space, making broker expertise valuable.
Commercial Property Loan Requirements
Securing loans for commercial property involves meeting stricter criteria than residential finance. Understanding these requirements before applying saves time and sets realistic expectations.
Deposit and LVR Requirements
Commercial property lending is more conservative than residential lending.
Deposit expectations:
- Minimum 20% deposit typical
- Many lenders prefer 30-40% for lower risk
- Higher deposits often secure better interest rates
- New commercial borrowers may need larger deposits
LVR (Loan to Value Ratio) considerations:
- Most lenders cap commercial LVR at 60-80%
- Investment properties are often limited to 70% LVR
- Owner-occupier scenarios may achieve 75-80% LVR
- Specialist lenders occasionally go higher (with premium rates)
One critical difference from residential loans is that Lenders Mortgage Insurance (LMI) doesn’t exist for commercial property loans, and you cannot borrow above typical LVR limits by paying insurance premiums. If you lack sufficient deposit, you’ll need alternative security or guarantors.
Documentation Requirements
Commercial property loan documentation falls into three main categories.
Full Documentation
- Two years of financial statements (profit & loss, balance sheets)
- Two years of business and personal tax returns
- Recent bank statements (3-6 months business accounts)
- Business Activity Statements (BAS)
- Details of existing business and personal debts
- Property details, including current leases (if applicable)
Full doc loans typically offer the best rates because lenders have comprehensive financial evidence.
Low Documentation
- Recent BAS statements (often 6-12 months)
- Accountant’s declaration verifying income
- Bank statements showing business revenue
- Property information and lease details
Low doc loans suit self-employed borrowers with strong businesses but complex tax structures. Expect rates approximately 0.5-1% higher than full doc options.
Lease Documentation (For Investment Properties)
- Current lease agreements
- Tenant financials (for significant tenancies)
- Property management agreements
- Rental payment history
- Evidence of property income
Investment property loans rely heavily on demonstrating stable rental income from quality tenants.
Loan Terms and Structure
Commercial property loans operate on different timeframes and structures than residential mortgages.
Loan terms:
- Typically 5-30 years (shorter than residential)
- Many commercial loans include annual reviews
- Interest rates may be fixed for 1-5 years, then revert to variable rates
- Some lenders require periodic principal reductions
Interest options:
- Principal and interest repayments (most common for owner-occupiers)
- Interest-only periods available (usually 1-5 years for investments)
- Interest-only, particularly popular for investors maximising cash flow
Additional considerations:
- Most commercial loans require professional property valuations ($2,000-$5,000)
- Lenders assess business financial health ongoing basis (not just at application)
- Loan documentation often includes business financial reporting requirements
- Some lenders require annual financial updates throughout the loan life
Your commercial property loan broker helps structure the loan optimally for your situation: balancing rates, terms, flexibility, and repayment capacity.
Commercial vs Residential Loans: Key Differences
Understanding how commercial property loans diverge from residential mortgages helps set appropriate expectations.
Feature | Residential Loan | Commercial Property Loan |
Typical LVR | Up to 95% (with LMI) | Usually 60-80% maximum |
Deposit Required | As low as 5% | Minimum 20%, often 30-40% |
Interest Rates | Lower (currently 6-8% approx) | Higher, typically 1-3% above residential |
Loan Terms | Usually 25-30 years | Typically 5-30 years, often with reviews |
Application Focus | Personal income and expenses | Business financials + property income potential |
Documentation | Payslips, tax returns | Business financials, tax returns, BAS, leases |
Valuation Basis | Comparable sales | Income approach + comparable sales |
Approval Time | Often 7-14 days | Typically 2-6 weeks |
LMI Availability | Yes (enables high LVR lending) | No (cannot borrow above typical LVR limits) |
Interest-Only Periods | Available but scrutinised | Commonly accepted for investment properties |
Property Assessment | Livability and market value | Income potential, tenant quality, location |
The bottom line? Commercial property loans involve more scrutiny, larger deposits, and higher rates, but they also provide access to income-generating assets that residential lending cannot accommodate.
Types of Commercial Property Loans
Standard Commercial Purchase Loan
The most common type and a straightforward way to purchase existing commercial property.
Suited for:
- Business owners buying premises to operate from
- Investors purchasing tenanted commercial property
- Acquiring established income-producing assets
It follows a traditional principal and interest or interest-only loan structure secured against the commercial property. Terms are typically within 5-25 years, with variable or fixed-rate options.
Development and Construction Loans
Purpose-built finance for building new commercial property or significantly redeveloping existing buildings.
Suited for:
- Property developers constructing commercial buildings
- Business owners building custom premises
- Major renovations or extensions
Funds are released in stages (progress payments) as construction advances. Often interest-only during construction, converting to principal and interest post-completion. Requires detailed development plans, costings, and pre-sales or pre-leasing evidence.
Commercial Property Refinance Loans
Replacing existing commercial property debt with new lending, usually for better rates or to release equity.
Suited for:
- Securing lower interest rates as your financial position strengthens
- Releasing property equity for business expansion
- Consolidating multiple commercial loans
Similar to purchase loans, but assessed based on the current property value and updated business financials. Can access increased equity if the property has appreciated.
SMSF Commercial Property Loans
Specialised lending allowing Self-Managed Super Funds to purchase commercial property.
Suited for:
- Business owners wanting their SMSF to own their business premises
- SMSF trustees seeking commercial property investments
- Leasing commercial property back to your own business
This loan must comply with both lending and superannuation regulations, and is typically limited to 70-80% LVR with interest-only terms. The property is held in a separate trust structure, and the application requires specialist SMSF knowledge, as not all lenders operate in this space.
For more on SMSF lending, consider connecting with brokers who specialise in commercial finance structures involving superannuation.
Low-Doc Commercial Property Loans
Alternative documentation loans for borrowers with strong businesses but complex financial structures.
Suited for:
- Self-employed business owners with non-traditional income structures
- Recently transitioned businesses (partnership to company, etc.)
- Borrowers with excellent business cash flow but complex tax arrangements
Assessed primarily on BAS statements and accountant declarations rather than full financials, with rates typically 0.5-1.5% higher than full doc loans. Lower LVR limits often apply (60-70% common).
Commercial Bridging Finance
Short-term finance covering gaps between commercial property transactions.
Suited for:
- Purchasing new commercial property before selling current premises
- Quick settlement requirements where speed matters
- Securing property at auction with tight settlement
Structure: Short terms (typically 6-12 months), interest-only, higher rates (often 7-12%). Acts as temporary funding until longer-term finance or property sale is completed. More expensive but valuable when timing is critical.
Bridging finance can also coordinate with small business loans for working capital during property transitions.
Commercial Property Loan Interest Rates
Interest rates for commercial property loans are typically 1-3% above residential mortgage rates.
Why the difference?
- Commercial property carries a higher perceived risk for lenders
- Business and property income can fluctuate more than salary income
- Commercial properties can take longer to sell if repossession occurs
- Lender servicing costs are higher for commercial loans
Variable vs Fixed Interest Rates
Variable Rates | Fixed Rates |
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Many commercial property borrowers use combinations, fixing a portion while keeping flexibility with variable components.
Factors Affecting Your Commercial Property Loan Rate
- Property type: Medical and office properties often attract better rates than hospitality or specialised industrial properties
- LVR: Lower borrowing (larger deposit) typically secures better rates
- Borrower strength: Strong business financials and credit history command better pricing
- Property location: Metro properties in major cities usually rate better than regional properties
- Lease quality: For investment properties, long-term leases with strong tenants improve rates
It’s important to note that rates change frequently based on economic conditions and lender policy. Quoted rates can become outdated within weeks, and generic rate information rarely reflects what you’ll actually be offered. Always speak with a specialist commercial property loan broker for current pricing specific to your situation.
Why Use a Broker for Commercial Property Loans?
Navigating loans for commercial property without expertise can be risky. A commercial property loan broker delivers:
Access to Multiple Lenders
Most people approach their existing bank first. That bank offers whatever products they have, which doesn’t always suit your property type or situation.
A specialist broker accesses:
- Major banks (all of them, not just yours)
- Regional and specialist banks
- Non-bank commercial lenders
- Private lenders for complex situations
- International lenders operating in Australia
That’s 50+ potential lenders instead of one. Some lenders exclusively use brokers – going direct to banks means missing potentially perfect options.
Specialist Knowledge of Commercial Lending
Commercial property lending varies dramatically by property type. Medical property lenders assess risk differently from warehouse lenders, while hospitality loans require understanding of trading figures and licensing.
Specialist brokers know:
- Which lenders prefer which property types
- How to present your application for maximum appeal
- What documentation each lender needs (saving months of back-and-forth)
- How to structure loans for optimal tax treatment
- Where flexibility exists in lending policies
For complex situations involving finance for franchise operations within commercial property, specialist broker knowledge becomes even more valuable.
Better Rates Through Broker Relationships
Brokers submit dozens or hundreds of applications to each lender annually. They’ve built relationships, understand each lender’s credit appetite, and know which credit managers handle which applications.
This matters because:
- Brokers know which lenders are currently competitive for your property type
- Established relationships can expedite processing
- Brokers understand negotiation leverage points
- They can often secure rate discounts not available when going directly
Navigate Complex Applications
Applications for commercial property loans can be complex. Financial documentation, property information, lease agreements, business structures, and existing debts; each component needs careful presentation. One documentation error can delay approval by weeks. Brokers prevent these delays through experience.
Brokers handle:
- Structuring applications to highlight strengths
- Pre-empting and addressing potential lender concerns
- Preparing documentation in the format lenders prefer
- Managing communication between you, lenders, solicitors, accountants
- Troubleshooting issues that arise during assessment
We Do the Legwork to Save You Time
Running a business demands your attention. Researching lenders, comparing products, making endless phone calls, and managing applications drains time you should spend on revenue-generating activities.
Your broker manages:
- Initial lender research and comparison
- Application preparation and submission
- Follow up with lenders throughout the assessment
- Coordination with valuers and solicitors
- Progress updates to keep you informed
No Cost to You
When the loan settles, your brokers are paid a commission by lenders, not borrowers. At zero cost, you receive professional advice, access to 50+ lenders, application management and support, and a broker who negotiates on your behalf.
The Selectabroker Difference
Selectabroker connects you with a specialist commercial property loan broker who focuses specifically on your property type.
This specialisation means:
- Your broker already understands the lending criteria for your property type
- They have established lender relationships in your sector
- They know common challenges and solutions
- Less education needed – they speak your language from day one
- A depth of expertise that accelerates outcomes
How to Apply for a Commercial Property Loan
The loans for commercial property application process follows a clear progression when working with Selectabroker.
Step 1: Free Consultation
Begin with a conversation about your commercial property and goals, covering:
- What type of commercial property you’re pursuing
- Whether it’s for owner-occupation or investment
- Your approximate budget and deposit available
- Your business situation and financial position
- Timeline and any specific requirements
Step 2: Documentation Gathering
Once matched with your specialist broker, they’ll provide a specific documentation checklist and guide you through gathering everything needed, explaining why each document matters and how lenders use it.
Typical requirements:
- Business financial statements (2 years)
- Personal and business tax returns
- BAS statements
- Bank statements
- Property details (address, intended use, current leases if applicable)
- Existing debt information
Step 3: Lender Matching
Your broker finds the best fit from a panel of 50+ lenders, considering:
- Which lenders favour your property type
- Current interest rates and fees
- LVR limits and deposit requirements
- Documentation preferences (full vs low doc)
- Approval timeframes
- Loan features and flexibility
They’ll typically present 2-3 options with honest pros and cons of each, allowing you to make an informed decision.
Step 4: Application Submission
Once you’ve selected your preferred lender, your broker manages the entire submission process and paperwork. This includes:
- Completing lender application forms
- Compiling supporting documentation
- Writing supporting commentary highlighting application strengths
- Submitting to the lender credit assessment team
- Acting as the primary contact for lender queries
You’re kept informed of progress, but don’t need to manage the daily back-and-forth.
Step 5: Valuation and Approval
The lender orders a professional property valuation and assesses your complete application, typically approved within 2-6 weeks. This stage involves:
- Property valuation by a qualified commercial valuer
- Credit assessment of your business and personal finances
- Property income analysis (for investment properties)
- Legal documentation review
- Final credit approval from the lender
Timeframes vary based on property complexity, documentation completeness, lender workload, and valuer availability.
Step 6: Settlement
This is the stage where funds are released, and property is secured. Once approved, solicitors handle the legal settlement process.
Final steps include:
- Loan documents prepared by the lender
- Your solicitor reviews and explains all documentation
- You sign loan contracts
- Settlement date scheduled
- Funds transferred to the seller’s solicitor
- Property title transfers to your name
- Mortgage registered on the property title
Your broker coordinates between the lender, solicitors, and real estate agents to ensure a smooth settlement. Post-settlement, they remain available for ongoing loan management support.
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Castlemaine, Vic
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Surry Hills, NSW
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Busselton, WA
Ready to Secure Your Commercial Property Loan?
Commercial property acquisition requires a significant financial commitment. The difference between the right loan and the wrong one can cost tens of thousands in unnecessary interest over the loan term.
Book your free 15-minute consultation today and discover how the right specialist broker can secure the right loan for the commercial property you're pursuing.
Commercial Property Loans FAQs
How much deposit do I need for a commercial property loan?
Typically 20-40% deposit is required for commercial property loans. While some lenders offer up to 80% LVR (meaning 20% deposit), many prefer 30-40% deposit, particularly for investment properties or first-time commercial borrowers.
What interest rates apply to commercial property loans?
Commercial property loan rates typically sit 1-3% higher than residential mortgage rates. Current commercial rates generally range from approximately 7-11% depending on your situation, though rates fluctuate frequently.
Rates change rapidly based on economic conditions. Always consult a commercial property loan broker for current pricing specific to your circumstances rather than relying on generic online rates.
Can I get a commercial property loan with bad credit?
Yes, loans for commercial property are available even with less-than-perfect credit history, though options are more limited and rates are higher.
Pathways available:
- Specialist lenders who assess current business strength over past credit issues
- Higher deposit requirements (50%+ sometimes)
- Secured lending using multiple properties
- Demonstrating improved financial management
What's the difference between full doc and low doc commercial property loans?
Full documentation loans require:
- Complete business financial statements (2 years)
- Personal and business tax returns (2 years)
- Comprehensive income verification
- Full disclosure of assets and liabilities
Low documentation loans require:
- Recent BAS statements (6-12 months)
- Accountant’s declaration of income
- Bank statements showing business revenue
- Limited financial statements
Can I buy commercial property through my SMSF?
Yes, Self-Managed Super Funds can purchase commercial property, including premises you lease back to your own business.
SMSF commercial property loans requirements:
- Property must be held in a separate trust (not directly by SMSF)
- Limited recourse lending only (lender cannot access other SMSF assets if default)
- Typically maximum of 70-80% LVR
- Must comply with the sole purpose test and related-party rules
- Usually interest-only terms
How long does commercial property loan approval take?
Typical approval timeframes range from 2-6 weeks, depending on the complexity of your situation.
Straightforward property types, such as office and retail, with complete documentation from the start, can see fast approval within 2-3 weeks. This is often paired with a strong financial position and an experienced lender assessment team.
Complex property types (hospitality, specialised industrial), multi-tenant properties requiring detailed income analysis, and low-doc applications generally take longer to approve (4-6+ weeks). The process may also take longer if you’re a first-time commercial borrowers.
What fees are involved in commercial property loans?
Upfront fees:
- Application fee: $500-$2,000 (sometimes waived)
- Property valuation: $2,000-$5,000 (varies by property size and complexity)
- Legal fees: $1,500-$5,000+ (for loan documentation and property settlement)
- Broker fees: $0 (paid by lender, not by you)
Ongoing fees:
- Monthly or annual account-keeping fees: $0-$50 per month
- Review fees: Some lenders charge annual review fees
- Discharge fees: If you pay out the loan early
Other potential costs:
- Building and pest inspections
- Additional valuations if required
- Break costs (if fixed-rate loan terminated early)
Can I get an interest-only commercial property loan?
Yes, interest-only periods are commonly available on commercial property loans, particularly for investment properties.
Not sure which loan type is right for you?
Connect with Craig and he can guide you through the various loans and help you work out which is going to be the best fit.