Commercial FinanceMakeMyLoan brokers compare dozens of lenders and owe you a Best Interests Duty — your bank doesn't.
Commercial property lending looks like home lending from a distance — a loan, a mortgage, a settlement — but almost every setting is different once you get close. Deposits are bigger, terms are shorter, valuations are slower and more expensive, the paperwork options are different, and GST enters the picture at purchase. None of it is difficult once you know the shape of it, but walking in with residential assumptions is how buyers end up short on settlement funds or surprised by a valuation. Here is what actually changes.
Lenders treat commercial property differently depending on who will occupy it.
Owner-occupied commercial property — your business buying its own premises — is often the easier conversation. The lender is really assessing your business: its trading history, profitability and capacity to cover the repayments, with the property as security. For many established businesses, buying premises through the trading entity, a holding entity, or in some cases an SMSF (a specialised path we cover in our SMSF loan guide) is a natural step once rent starts to feel like someone else's mortgage.
Commercial investment property — buying to lease to a tenant — shifts the assessment to the property's income. The lender cares about the lease: who the tenant is, how long the term has to run, rent reviews, and what the property would re-let for if the tenant left. A property with a strong tenant on a long lease is fundamentally different security from an identical building sitting vacant, and the pricing and gearing on offer reflect that.
Commercial lending is more conservative on gearing than residential. In general terms — and policies vary widely by lender, property type and location:
Budget beyond the deposit, too: transfer (stamp) duty on commercial purchases, legal and due diligence costs, valuation and lender fees, and potentially GST (more below). Loan terms are commonly around 15 to 25 years, sometimes shorter for specialised assets, and some facilities are subject to periodic reviews rather than running set-and-forget to maturity — ask about review clauses before you sign, not after.
Full-doc commercial lending mirrors what you would expect: financial statements, tax returns and a full serviceability assessment across your business and personal position. It earns the widest lender choice and the best pricing.
Lease-doc is unique to commercial investment lending, and for the right borrower it is a genuinely elegant option: the lender assesses the loan primarily on the property's lease income rather than your full financials. Broadly, if the rent covers the interest by an acceptable margin — lenders express this as an interest cover ratio — the loan can stand on the property's own feet. It suits investors whose financials are complex, whose accountants are mid-year, or who simply prefer not to unpack multiple entities for a property that visibly pays for itself.
The trade-offs are what you would guess: lease-doc generally means lower maximum LVRs, slightly higher pricing, and real scrutiny of the lease itself — tenant quality, remaining term and rent reviews all matter, because the lease is doing the work the financials would normally do. Between full-doc and lease-doc sit alt-doc options using BAS and bank statements, covered in our low-doc guide.
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Commercial valuations are a different animal from residential ones. They are ordered from specialist valuers, take longer — often two to four weeks — and cost meaningfully more, with the bill typically yours even if the loan does not proceed. The valuer assesses the property as an income-producing asset: comparable sales, but also the lease terms, tenant strength and market rents.
Two practical consequences. First, build the valuation timeline into your finance clause — a residential-length finance period can be genuinely tight for a commercial deal. Second, understand that the valuation can reshape the loan: lenders lend against the valuation, not the price, and a valuation that treats the passing rent as above market can pull the number down. If the property is tenanted, have the lease documents complete and legible before the valuer is appointed; missing lease detail is a common cause of conservative valuations.
Unlike residential homes, commercial property transactions are often subject to GST, and the treatment affects how much money you need at settlement. In general terms only:
The rules are technical, the conditions matter, and getting them wrong is expensive. Before you exchange contracts, confirm the GST treatment of your specific transaction with your accountant and solicitor — this is a purchase where the professional fees are cheap insurance.
A typical commercial purchase runs: pre-assessment of your borrowing position, offer and contract with a finance clause sized for commercial timeframes, formal application with financials (or lease documents for lease-doc), valuation, credit approval, loan documents, then settlement. Allow more time than a residential deal at every stage — six weeks from application to settlement is a reasonable planning figure and complex deals run longer. Structuring — which entity buys, how the loan is guaranteed, how it sits alongside your business borrowing — is best decided before the contract is signed, because changing the purchasing entity after exchange can have duty consequences.
Commercial lending has more moving parts and a wider spread between lenders than residential — on gearing, pricing, doc options and review clauses — so lender selection does real work. You can see the range on our commercial loans page, or get in touch and we can pre-assess your position before you make an offer.
In general terms, lenders commonly cap standard commercial property lending somewhere in the 65 to 80 per cent LVR range, meaning a deposit of roughly 20 to 35 per cent, with specialised properties capped lower. There is no LMI option to push gearing higher as in residential lending, though some borrowers cover part of the gap using equity in other property.
A lease-doc loan is commercial investment lending assessed primarily on the property's lease income rather than your full financials — broadly, the rent must cover the interest by an acceptable margin. It suits investors with complex or not-yet-finalised financials buying tenanted property. Expect lower maximum LVRs and slightly higher pricing than full-doc, and close scrutiny of the tenant and lease terms.
Often, but not always — in general terms GST can apply on top of the price, a GST-registered buyer may be able to claim it back, and tenanted properties sold as a going concern can be GST-free if strict conditions are met. The treatment affects how much cash you need at settlement, so confirm it with your accountant and solicitor before exchanging contracts.
Generally yes, in broad terms — commercial property is considered higher-risk security than residential, and pricing reflects the property type, gearing, doc type and the strength of the income supporting the loan. The spread between lenders is also wider than in residential lending, which is why comparing across a panel tends to matter more.
Longer than residential. Commercial valuations alone often take two to four weeks, and six weeks from application to settlement is a sensible planning figure, with complex or specialised deals running longer. Size your contract's finance clause for commercial timeframes rather than residential ones, and get lease documents in order early if the property is tenanted.
This article is general information only and doesn't consider your personal objectives, financial situation or needs — it isn't personal credit advice, and lending criteria, rates, fees and government schemes change. Before acting, speak with a licensed MakeMyLoan broker or credit representative who will assess your circumstances and provide a credit guide before any credit assistance is given.
