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 LoansHere are some key differences between commercial and residential property loans in Australia:
FeatureResidential LoanCommercial LoanLoan-to-Value Ratio (LVR)Up to 95%Often capped at 70% or lower
Interest RatesGenerally lowerOften higher and vary by risk
Loan Terms25–30 years1–25 years, often shorter
DocumentationFull doc or low docFull doc, low doc, lease doc or no doc (varies by lender)
Assessment CriteriaPersonal income focusBusiness income, lease terms, asset value

Types of Commercial LoansDepending 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 ForLenders 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 MattersGetting 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