Commercial lending gets treated as a niche topic, but it's a genuinely common need — buying premises for your own business, adding a commercial property to an investment portfolio, or purchasing inside an SMSF. It just runs on different assessment rules to residential lending.
Lower LVRs, shorter terms
Commercial loans typically max out around 65–75% LVR, compared to 80–95% for residential. Loan terms are often shorter too — commonly 15–20 years rather than 30 — which means higher monthly repayments for the same loan amount.
Property type and tenant strength matter
Lenders assess commercial property partly on the property itself — a standard office or warehouse in a good location is viewed differently to a highly specialised property (like a childcare centre or petrol station) that would be harder to re-lease if things went wrong. If the property is tenanted, the lender also looks closely at lease strength: the tenant's covenant (their financial standing), the remaining lease term, and rent review terms.
Owner-occupied vs. investment commercial
Buying premises for your own business to operate from is assessed differently to buying a commercial property purely as an investment. Owner-occupied purchases often get access to slightly better rates and terms, since the lender is also assessing your business's ability to service the loan through trading income, not just rental return.
Commercial valuations are more involved than residential ones — they typically weigh the property's income-producing capacity (rental yield) as heavily as its physical characteristics. Budget for the valuation to take longer and cost more than a standard residential val.
Lease-doc and low-doc options
For an investment commercial property with a strong, established tenant, some lenders will assess serviceability primarily on the lease income itself ("lease-doc" lending) rather than requiring full financials from the borrower — useful for investors whose personal income doesn't fully reflect their capacity to service the loan.
Rates and fees
Commercial rates typically run higher than residential, and commercial loans often carry establishment and ongoing fees that residential loans don't. This reflects the higher risk profile lenders assign to commercial property generally, and the more resource-intensive assessment process.
SMSF and trust structures
Commercial property is a common SMSF purchase — including the specific case of a business owner's own SMSF buying the premises their business operates from (subject to strict superannuation rules on related-party transactions). See our trust and SMSF lending guide for more on how that structuring works.
Next step
Commercial deals are genuinely deal-by-deal — property type, tenant strength, your own financials and structure all shift what's possible. A conversation early, before you're under contract, is worth far more here than in most residential purchases.
Talk to us about a commercial purchase