Services · Business
Commercial Property Loans
Buying commercial property, whether it's your own business premises or an investment, plays by different rules to a home loan. The deposits are bigger, the lender looks hard at the rent and the tenant, and the loan terms are shorter. Here's the lay of the land.
What's different from a home loan
- Deposits are larger. Many lenders cap commercial lending around 65% to 70% of the property value, so you're often finding 30% or more.
- Terms are shorter, commonly ten to twenty-five years rather than thirty.
- The lender weighs the lease heavily: how long it runs, how strong the tenant is, and whether the rent covers the repayments comfortably.
- Rates and fees vary more between lenders than they do on home loans.
Owner-occupier or investment
If you're buying premises to run your own business from, some lenders are more generous because your business is the tenant and you control it. If it's a pure investment leased to someone else, the lender leans on the strength and length of that lease. Either way, well-prepared financials make a real difference to how far a lender will stretch.
Lease doc and full doc
For some investment deals with a strong lease in place, a lender can assess mainly on the rental income, sometimes called lease doc, with lighter borrower paperwork. For owner-occupiers and weaker leases, expect a full-doc assessment of your business performance. I'll tell you which path your deal fits and package it accordingly.
Sort the lease before the finance
Commercial valuations are driven by income, not just comparable sales. A short lease or a shaky tenant can pull the valuation down and change your deposit. Getting the lease right before you finance often pays for itself.
Buying commercial inside your super is its own world with its own rules. If that's you, start with SMSF loans. And if you want a broad look at your options first, book a call.
Looking at a commercial purchase?
Send me the property and the lease and I'll tell you what deposit and structure to plan for.
Frequently asked questions
How much deposit do I need for commercial property?
Often 30% or more, because many lenders cap commercial loans around 65% to 70% of the value. Owner-occupiers can sometimes do a little better. Your deposit also shifts with the lease strength and property type.
Are commercial loan terms shorter than home loans?
Usually, yes. Commercial loans commonly run ten to twenty-five years rather than the thirty you'd see on a home loan, which lifts the repayments. We factor that into what the property needs to earn.
Can I borrow against my business premises for other things?
Sometimes. If you own premises with equity, that can help fund growth or another purchase. It depends on the property and your business numbers, so let's talk it through.
Important information
This information is general in nature and does not take your personal objectives, financial situation, or needs into account. It is not credit assistance or a recommendation to enter into any particular credit contract. Consider whether it is right for you and seek advice before acting. Lending is subject to a lender's eligibility and approval criteria. Terms, conditions, fees, and charges apply.
Greenwood Finance · ABN 23 671 049 693 · Credit Representative No. 551942.
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