Fri, 20 Jun 2025 10:56:45 +1000WeeblyWed, 18 Jun 2025 10:47:46 GMThttps://www.tracefinancial.com.au/blog/commercial-property-loans-in-australia-what-business-owners-and-investors-need-to-know
Investing in commercial property is an exciting step for many Australian business owners and investors. Whether you’re buying an office space, retail outlet, industrial warehouse, or mixed-use property, a commercial property loan can help you secure the asset--but it’s very different to taking out a home loan.
From loan structures and deposit requirements to lender criteria and tax implications, commercial finance is a more complex space—and it pays to understand what you’re getting into before signing on the dotted line.
Here’s what you need to know.

What Is a Commercial Property Loan?
A commercial property loan is finance used to purchase property for business or investment purposes. This might include:

• Offices or retail space
• Warehouses or industrial sites
• Medical suites
• Hospitality venues
• Mixed-use buildings

Unlike residential loans, these loans are assessed on the strength of the property itself, the income it generates, and the borrower’s business position—not just personal income and credit history.

How Commercial Loans Differ From Residential Loans
Here are some key differences between commercial and residential property loans in Australia:

Feature                                            Residential Loan                   Commercial Loan
Loan-to-Value Ratio (LVR)      Up to 95%                                    Often capped at 70% or lower
Interest Rates                              Generally lower                        Often higher and vary by risk
Loan Terms                                  25–30 years                               1–25 years, often shorter
Documentation                         Full doc or low doc                   Full doc, low doc, lease doc or no doc (varies by lender)
Assessment Criteria                 Personal income focus             Business income, lease terms, asset value

Types of Commercial Loans
Depending on your purpose and financial situation, you may consider different types of commercial lending options, such as:

• Owner-occupied loans: If your business will operate from the premises
• Investment loans: For purchasing income-generating property
• Lease-doc loans: Based primarily on the lease income from the property
• Low-doc or no-doc loans: For borrowers with limited financial statements (higher risk, higher rates)

What Lenders Look For
Lenders assess commercial loans differently from residential ones. Key factors include:

• The quality and location of the property
• The strength and length of tenant leases
• The borrower’s business performance
• Asset and liability position
• Deposit size and loan security
• Exit strategy (especially for shorter-term loans)

In most cases, lenders will expect a larger deposit (30% or more) and a strong lease agreement to reduce risk.

Why Expert Advice Matters
Getting a commercial loan approved can be significantly more involved than a home loan—and mistakes can be costly. Each lender has different appetites for commercial risk, and loan conditions can vary widely.

At Trace Financial, we take the time to understand your financial position, business goals, and the property you're targeting. As both mortgage brokers and accounting professionals, we offer insights beyond interest rates—looking at structure, tax impact, and long-term suitability.
We’ll help you:

• Compare lenders and find competitive, suitable loan options
• Understand fees, LVR requirements, and loan structures
• Structure the loan to suit your business and investment goals
• Navigate documentation and approval processes efficiently

 Thinking of Buying Commercial Property? 
Whether you’re expanding your business premises or diversifying your investment portfolio, a commercial property loan can open the door to exciting opportunities—but only with the right strategy behind it.

Let’s make your next move a smart one.
Contact Trace Financial today for clear advice and tailored solutions to suit your commercial property goals]]>Wed, 18 Jun 2025 10:39:19 GMThttps://www.tracefinancial.com.au/blog/what-you-need-to-know-about-smsf-loans-and-why-the-right-guidance-matters​Using your super to invest in property sounds like a smart move—and it can be.
But if you’re thinking about buying property through a Self-Managed Super Fund (SMSF), there’s more to the process than meets the eye. SMSF loans are powerful tools, but they come with rules, responsibilities, and a level of complexity that calls for expert guidance.
Here’s what you need to know before you dive in—and how Trace Financial can help you do it right.

What is an SMSF Loan?
An SMSF loan—also known as a limited recourse borrowing arrangement (LRBA)—is a way for your self-managed super fund to borrow money to buy an investment property. The income and expenses associated with the property are managed within the SMSF, and the loan is structured so that if the fund defaults, the lender can only access the secured property—not other fund assets.
While this structure protects the broader fund, it also comes with very strict lending conditions.

Why SMSF Loans Are Complex?
Unlike traditional home or investment loans, SMSF loans must comply with superannuation law and tax rules. That includes:

• Buying only investment property (you can’t live in it or rent it to family members)
• Ensuring the loan structure meets ATO compliance rules
• Having the SMSF correctly established and maintained
• Navigating limited lender options and tougher lending criteria
• Understanding the tax implications, both inside and outside the fund

And all of this needs to happen before you even apply for a loan.

Why Expert Guidance is Crucial?

This is where Trace Financial makes a difference. We’re not just mortgage professionals—we’re also accountants with specialist knowledge in superannuation, tax law, and finance strategy. We’ll help you:

• Ensure your SMSF is structured correctly from the outset
• Choose from a panel of SMSF-compliant lenders and compare competitive options
• Understand your obligations, costs, and opportunities
• Avoid common pitfalls that can lead to compliance breaches or financial loss
• Align the investment strategy with your retirement goals

With Trace Financial, you have a trusted team in your corner—one that understands the big picture, not just the loan paperwork.

Is an SMSF Loan Right for You?
These loans aren’t for everyone. But if you have an established SMSF with sufficient balance, a clear investment strategy, and want to take control of your retirement wealth, an SMSF loan can be a strategic and tax-effective way to grow your fund.
Before you commit, it’s critical to seek tailored advice that considers your individual circumstances, risk profile, and long-term financial goals.

Ready to Explore the Possibilities?
At Trace Financial, we combine deep finance knowledge with real-world experience to help you make confident, informed decisions. Whether you’re just starting to consider SMSF property investment or you’re ready to apply, we’ll guide you every step of the way.

Let’s turn your super into a smarter investment strategy.
Contact us today to talk about SMSF loan options that work for you.]]>Mon, 23 May 2022 23:07:45 GMThttps://www.tracefinancial.com.au/blog/right-sizingAre you a first home buyer or trying to get back into the property market? Consider this – right sizing.

It is the concept of buying a property that is the right size for your current lifestyle rather than the one you plan or want to have in the future. Basically, only buying what you need now and not what you desire now. It seems logical enough, doesn’t it?

The current attitude with property seems to be bigger is better. The homes that are built are large, often 4 2 2, squeezed onto ever smaller parcels of land with prices to match the number of rooms. A smaller home, adequate for your current needs, could mean a smaller price, a smaller deposit to save and therefore a smaller mortgage.

If you are trying to get into the property market and purchase your first home, consider what you need over what you’d like to have, or what property marketers say you need. The floorplan you need may be 2 bedrooms not 4, you most likely don’t need a cinema room, lounge room and family room all in your home if you are single. You own one car so a double garage may not be needed.

Whilst everyone wants all the bells and whistles and as many square metres as you can stretch yourself to afford, settling for what is needed now may get you into the property market much sooner and more affordably.

With a lower entry price, you will have lower mortgage repayments which will allow you to weather any interest rate rises and have the money to enjoy your life. You will also be able to pay off your loan sooner and when ready move on to the home of your dreams, or the home that is the right size for your next stage of life.

So, when you have found your right size right now, we will be available to help you find the right size finance solution to make that purchase a reality.
www.tracefinancial.com.au
]]>Sun, 15 May 2022 08:13:44 GMThttps://www.tracefinancial.com.au/blog/five-ways-to-fund-a-renovationConsidering transforming your home from ‘blah’ to ‘brilliant’, but lack the funds to support your makeover? Never fear, we’ve rounded up five home renovation finance options that could help turn your dream into reality.

    Equity release/top up home loan
An equity release/top up loan is probably the most common way people borrow money when they want to renovate. It involves borrowing against the current value of your home before any value-adding renovations and in most cases allows you to obtain the funds upfront.

If you own your home outright, you can usually borrow up to 80% of its value.If you have a mortgage on your home, the amount you can borrow is usually the difference between the balance of the loan and 80% of the value of the property.

For example, if your home is valued at $500,000 and your loan balance is -$300,000, you could borrow $100,000 – making the total loan amount $400,000 (80% of $500,000).

One potential problem is that the cost of your renovations may be higher than the equity you have available. If you run out of funds mid-construction, and if the property is then not in sound, lock up condition, you may have an issue obtaining extra funds down the track.

      Construction loan
If you're planning to completely transform your home and undergo a major makeover, a construction loan may be a good option as you can spread the cost over a long period of time.

With a construction loan, the lender will assess the value of your home after the renovation based on the building plans and you can typically borrow against that value. You may be able to borrow up to 90% of the end value of your home and take advantage of mortgage interest rates, which tend to be lower than credit card and personal loan rates.

 You won’t be given the full loan amount upfront, but usually in staggered amounts over a period of time – these are called ‘progress payments’ and are linked to a fixed price building contract you will have with your builder.

    Line of credit
You can establish a revolving credit line that you can access (up to your approved limit) whenever you want.

You only pay interest on the funds you use and, as you pay off your balance, you can re-borrow the unused funds without reapplying if necessary.

However, care must be taken not to get in over your head in terms of serviceability. Make sure you can make repayments on the line of credit that will reduce the principle because your minimum repayment only pays the interest – it will not reduce the loan balance.

Interest rates on this type of product are typically much higher than a construction loan or equity release loan.

    Personal loan
A personal loan may be a good option if you’re only making minor renovations.

Personal loans are usually capped at around $60,000, but interest rates on personal loans are higher than on home equity loans and payments need to be made, usually, over a maximum of seven years.

    Credit cards
Using credit cards to fund renovations should only be considered if you want to undertake really small projects.

The interest rates are usually much higher on credit cards than mortgages, but for a very small project that extra interest might actually total less than loan establishment fees.

Ensure your renovations are adding value

There are very few exceptions to the rule that your renovations should add more value to your home than they will cost to carry out.
​
Think about how the money you spend on a renovation will increase the value of your property. For example, consider making changes that would appeal to the majority of potential buyers to help you sell your house faster and at a higher price. 
]]>Mon, 18 Apr 2022 07:07:45 GMThttps://www.tracefinancial.com.au/blog/extra-costs-when-buying-a-homeWhen taking out a mortgage, many people forget to consider the fees and expenses that come on top of the purchase price of the property.

Here are some of the extra costs that you’ll need to consider when you take out a home loan.

Home loan application fees

Some lenders charge a home loan application fee. The fee will depend on the loan you are applying for and the lender.

Home loan application fees cover:

• •loan contracts
• •property title checks
• •credit checks
• •attending a settlement.

Mortgage fees and costs

• •Mortgage establishment fees – lenders generally charge a mortgage establishment fee, which is a fee for setting up a mortgage.
• •Property valuation fee – a third party chosen by the lender, is appointed to determine the value of your land and improvements.
• •Mortgage registration – your mortgage deed needs to be registered with the government. Some State Governments charge stamp duty to register your mortgage.
• •Lenders Mortgage Insurance – if you don’t have 20% of the purchase price or the value of the property, the lender will require you to pay for a lenders mortgage insurance policy that covers their risk in the event you default on your repayments.

Property fees and costs

• •Building, pest and electrical inspection fees – it’s wise to have your property inspected for any structural or electrical problems and for pests.
• •Registration of transfer fee – the new owner of the property needs to be registered at the land titles office.
• Transfer Duty (formerly Stamp Duty in NSW) - you will need to pay this when you buy a home. If you’re a first home buyer, you may be entitled to a concessional rate of transfer duty, or even an exemption from paying it
• •Legal fees – you generally need to pay a solicitor or settlement agent/conveyancer to handle the transfer of ownership of the property on your behalf.
• •Home and contents insurance – most homeowners insure their home and contents against a range of threats, such as burglary, fire, storm, etc. Lenders insist that your property is insured while you have a mortgage.
• •Life and income protection insurance – borrowers should consider protecting their incomes and themselves while they have a mortgage.
• •Utility costs – connecting electricity, gas and telephone can attract a fee.
• •Council rates – your local council charges rates to cover garbage collection and a host of other services.
• •Water rates – the water corporation charges rates for the supply and upkeep of water to your property.
• •Strata / body corporate fees – if you buy an apartment or strata titled property, body corporate fees are charged, and some fees can be significant, particularly if the building is in need of a major work, or if there are lifts, pools and other communal facilities.
• •Maintenance costs – don’t forget to make provision for regular maintenance on your home, even if you decide not to undertake significant renovation.

]]>Mon, 18 Apr 2022 00:30:00 GMThttps://www.tracefinancial.com.au/blog/getting-to-approval-fasterEvery home loan application is unique, so the time between your first contact with us and approval can never be predetermined.

The most common reason for a delay is a lender’s turnaround time to assessment, especially when some lenders have competitive offerings and experience larger application volumes, but a lack of preparation can cause this delay to snowball.

If an application is not completed correctly, you risk delays in approval, or even being declined by potential lenders. There are, however, some things you can do to help the process move quicker.

Be prepared

In order for a lender to assess your capacity to service loan repayments, every financial detail must be taken into account.

Other than the obvious documentation that needs to accompany an application – satisfactory identification and evidence of income by way of pay slips – many lenders will expect to see a reference from your employer, group certificates or tax returns, and records of any investments or shares that you might have.

If you are self-employed, you will need to organise alternative documentation to prove income, such as financial statements relating to the profit and loss of your business going back two years.

Lenders will also want to see bank statements going back a few months in order to track your spending and savings history. Most importantly, you will need to provide the details of your debts.

By having all your documents organised and a savings and repayment plan documented, as well as evidence that you can commit to the plan, you will increase your chances of receiving the loan you are after.

Disclose all information

Lenders want to see proof that you are capable of managing the responsibility of the loan, through steady employment, a good credit history and a debt-free approach to your financials.

To avoid back and forth requests, which can delay your application, ensure your lender has a thorough understanding of you as an applicant including appropriate identification of all borrowers.
Provide all the supporting and necessary documents upfront to us, have good, current information on your financial position and convey as much detail as possible in relation to your requirements and objectives as possible.

We will not only need to have your full financial details, we will also need to take reasonable steps to verify them.

Skip the valuation queue

Not all applications require a valuation, depending on the property and lending institution and forgoing this step can save a considerable amount of time. You can also save time by having a valuation completed prior to your application, if it’s accepted by your chosen lender, but we will speak to you about what is best for the recommended lenders.

If you have any questions contact us we are only too happy too help.]]>