Commercial Property Finance in Australia

Commercial property finance is its own discipline. The loans behave differently to home loans, the lenders price risk rather than read off a rate card, and the field of who will actually fund a deal narrows fast once you move from a standard office or retail building into anything specialised. This guide explains how commercial property finance works in Australia, the main loan types, how lenders set terms and pricing, and who lends across the market, so you can approach a commercial purchase or refinance with a clear picture of the landscape.

The information here is general in nature. It is not credit assistance, a loan offer, a quote or a recommendation to take out any particular facility. Commercial property lending is largely business-purpose lending, which sits outside the consumer credit rules that govern home loans, so the protections and the process both differ. Where a deal touches your personal circumstances, an SMSF or your tax position, get advice specific to you.

What Commercial Property Finance Covers

Commercial property finance is the funding used to buy, refinance or release equity against property held for a business or investment purpose rather than to live in. That includes offices, retail and shopfront premises, industrial sheds and warehouses, mixed-use buildings, and specialised assets such as hotels, motels, childcare centres and medical suites.

It separates broadly into two questions: who occupies the property, and how the loan is verified. Both shape which lenders will look at the deal and on what terms. The same building can attract very different finance depending on whether the borrower runs a business from it or holds it as a leased investment, and depending on whether full financials are available or the loan is assessed off the lease income.

LenderBridge has researched a panel of 297 Australian lenders across 19 categories and all 8 jurisdictions. Within that panel, 72 lenders carry one or more commercial property facilities, as at our 2026 research pass, spanning the banks, the non-bank specialists and the private credit market. That breadth matters because commercial appetite is uneven. A deal that one lender declines on policy is often standard business for another, and the difference is rarely about the borrower. It is about where each lender sits on asset type, location, lease profile and loan size.

Owner-Occupier vs Investor Commercial Loans

The first fork in commercial property finance is whether you occupy the building or lease it out. Lenders treat the two differently because the income that services the loan comes from different places.

Owner-occupier commercial loans

An owner-occupier loan funds a business buying its own premises. The loan is serviced by the trading business that operates from the building, so the lender assesses the strength of that business as much as the property itself. Because the borrower controls the occupancy, owner-occupied commercial property is often viewed as lower risk than a leased investment, and it can attract a higher loan-to-value ratio as a result.

This is a common path for established businesses that have outgrown renting. Owning the premises converts rent into equity and removes the risk of a landlord not renewing a lease. The trade-off is that the deposit, the loan and the business all sit with one party, so a downturn in the business and a fall in the property value can arrive together.

Investor commercial loans

An investor loan funds commercial property bought to lease to a tenant. Here the lender looks hardest at the lease: who the tenant is, how long the lease runs, the rent, the review structure and what happens at expiry. A long lease to a strong tenant supports the loan. A short lease, a weak tenant or a vacant building introduces risk the lender prices for, usually through a lower loan-to-value ratio.

The metric that captures this is the weighted average lease expiry, the average time remaining across all leases in the building weighted by income. A longer weighted average lease expiry generally improves the finance terms because it gives the lender confidence the income will hold. This is why an investor buying a building with a single short lease faces tighter terms than one buying the same building with a long, secure tenancy.

Commercial Property Loan LVR and Terms

Anyone moving from residential to commercial property finance for the first time is usually surprised by three things: the loan-to-value ratio is lower, the term is shorter, and interest-only is far more common. None of this is a lender being difficult. It reflects how commercial property risk actually works.

Lower loan-to-value ratios

Where a standard home loan might reach 80 per cent of value, or higher with mortgage insurance, commercial property loan-to-value ratios are typically lower and vary by asset type. Standard commercial property such as offices and industrial sits in one band, retail tends to sit lower because of tenant and vacancy risk, and specialised assets such as hotels and childcare sit lower again because the buyer pool at resale is smaller. The principle is consistent: the harder a property would be to sell quickly, the less a lender will advance against it.

Shorter loan terms

Commercial property loans usually run for a shorter term than the 25 to 30 years standard on a home loan. Many commercial facilities are written for a set term with a review at the end, at which point the lender reassesses the loan, the property and the borrower before extending. This review cycle is normal in commercial lending and is something to plan for rather than be caught by, because the terms available at review depend on conditions at the time, not the conditions when you first borrowed.

Interest-only is common

Interest-only periods are far more common in commercial property finance than in owner-occupied home lending, particularly for investors. Servicing only the interest preserves cashflow and can suit an asset held for income and capital growth. The flip side is that the principal does not reduce during the interest-only period, so the full loan balance is still there at the review or at refinance, and the exit plan needs to account for it.

For investors weighing how location shapes a deal, our guide on how lender location appetite varies across Australia is worth reading alongside this, because location shifts commercial terms even more sharply than it shifts residential ones.

Lease-Doc and Low-Doc Commercial Loans

Not every commercial borrower can hand over two years of up-to-date financials. Self-employed owners, investors with complex structures and borrowers part-way through a financial year often cannot verify income the conventional way. The market answers this with lease-doc and low-doc commercial loans, which verify serviceability differently.

How lease-doc commercial loans work

A lease-doc loan assesses serviceability off the lease income from the property rather than the borrower's full financial statements. The lender looks at the rent the building produces and checks that it covers the loan repayments by a required margin, the interest cover. If the lease stacks up, the deal can proceed without the full suite of personal and business financials. Lease-doc suits investment property with an established tenant and a clean lease, where the building's own income is the real security.

How low-doc commercial loans work

A low-doc commercial loan relies on alternative income verification, such as an accountant's declaration, business activity statements or bank statements, in place of full tax returns and financials. It is built for borrowers whose income is real but not yet documented in the conventional form, often the self-employed. Because the lender is verifying with less, low-doc commercial loans generally carry a lower loan-to-value ratio and price for the reduced documentation.

Lease-doc and low-doc are tools, not shortcuts, and which one fits depends entirely on the deal and the borrower. This guide describes how they work so you understand the landscape. It does not tell you which to use, because that is a question for advice specific to your circumstances. What is worth knowing is that a deal which does not fit a major bank's full-doc requirements is not automatically unfundable. It is often a question of finding the lender whose verification approach matches the borrower's situation.

Commercial Bridging Finance

Commercial bridging finance is short-term funding that covers a timing gap. The classic use is buying a new commercial property before an existing one sells, but bridging also funds settlement deadlines, auction purchases, lease-up periods before a property qualifies for a longer-term loan, and refinances that need to complete quickly.

Bridging is priced and structured for speed and short duration. The terms are short, the cost reflects the convenience and the risk, and the lender will want to see a clear and credible exit, the event that repays the bridge, whether that is a sale, a refinance or incoming funds. A bridge without a believable exit is the most common way these facilities go wrong.

The principles carry across from residential bridging, so our explainer on how bridging loans work when you buy before you sell is a useful primer even though it is framed around residential. Commercial bridging also sits close to development finance, and the line between the two is not always obvious. Our piece on bridging finance versus development finance draws the distinction, and you can sketch indicative holding costs with the bridging finance calculator.

How Commercial Loans Are Priced

The single biggest shift from residential to commercial property finance is that commercial pricing is risk-based, not a published rate card. Two borrowers buying two similar buildings can be quoted materially different terms, and both can be correct, because the lender is pricing the specific risk of the specific deal.

The factors that move commercial pricing include the asset type and how readily it would resell, the location and the depth of the market there, the lease profile and tenant strength, the loan-to-value ratio, the loan size, and the borrower's financial position and experience. A long lease to a strong tenant in a deep market prices differently to a short lease in a thin one, even at the same loan-to-value ratio.

This is why a single advertised commercial rate tells you very little, and why we do not publish one. The useful question is not "what is the rate" but "which lender prices this particular deal most favourably", and the answer depends on the deal in front of you. It is also why two lenders can look at the same building and reach genuinely different decisions: they weight these factors differently according to their own policy and appetite.

Who Lends on Commercial Property: Banks, Non-Banks and Private Credit

Commercial property finance comes from three broad sources, and each occupies a different part of the market. Understanding the differences explains why a deal that does not suit one will often suit another.

Banks

The major banks, their subsidiaries, the second-tier banks and the customer-owned mutuals lend on commercial property and tend to offer the sharpest pricing on clean, well-documented deals. The trade-off is policy. Banks work to defined credit policies, prefer full financials and standard asset types, and can be slower and less flexible on anything that sits outside the box. For a straightforward owner-occupied office or industrial purchase with good financials, a bank is often the natural home.

Non-bank lenders

Non-bank commercial lenders fund deals that need more flexibility than a bank's policy allows. They are the home of lease-doc and low-doc commercial lending, they take a more case-by-case view of asset types and borrower situations, and they often move faster. The pricing reflects the flexibility. Non-bank specialists make up a large share of the commercial market, a fair reflection of how much commercial lending now happens outside the banks.

Private credit and private lenders

Private credit funds, private mortgage lenders and short-term specialists fund the deals that need speed, certainty or a structure the mainstream will not write, including bridging, transitional assets, complex structures and time-critical settlements. Private finance is typically the most expensive of the three, but for the right situation, where speed or certainty is worth more than the lowest rate, it solves problems the other two cannot.

The practical point is that the commercial market is wide, and the right source depends on the deal. The same purchase might be a bank deal at full-doc, a non-bank deal at lease-doc, or a private deal if it has to settle in two weeks. Knowing which part of the market a deal belongs to is most of the work.

Commercial vs Residential Investment Property Finance

Investors who have only ever borrowed against residential property are often surprised by how different commercial investment finance is, even though both are investment lending. The differences are worth setting out plainly.

• Loan-to-value ratio. Residential investment lending reaches higher loan-to-value ratios than commercial, which generally sits lower and varies by asset type.
• Term. Residential investment loans run for long terms; commercial loans are typically shorter and often carry a review at the end.
• Income assessment. Residential lending leans on the borrower's personal income; commercial lending leans heavily on the property's lease income and the tenant.
• Pricing. Residential rates are largely a published rate card; commercial pricing is risk-based and quoted deal by deal.
• Regulation. Residential lending to consumers is governed by the consumer credit rules; commercial property finance for a business or investment purpose largely sits outside them, which changes both the protections and the process.
• Lender field. Almost every lender does residential; the field that does commercial, and the field that does a given commercial asset type, is narrower.

None of this makes commercial property a worse or better investment than residential. It makes it a different financing exercise, with a different set of lenders and a different way of being assessed. The investors who do well in commercial tend to be the ones who understood the financing differences before they bought, not after.

Commercial Development Finance

Building or developing commercial property is a distinct category again. Where the loans on this page fund the purchase or refinance of an existing commercial building, commercial development finance funds the construction of one, and it is assessed on the project rather than on a standing asset: the costs, the end value, the pre-commitments and the borrower's track record.

If your commercial project involves building rather than buying, that is development finance territory, and we cover it in full on our development finance pillar. There is overlap, particularly on commercial development and total facilities that fund land and construction together, so it is worth reading both if your deal sits on the line between the two.

SMSF and Commercial Property

A self-managed super fund can hold business real property, and using an SMSF to own the premises a member's business operates from is a recognised strategy. It is also the highest-risk corner of commercial property finance to get wrong.

SMSF commercial property is bought through a limited recourse borrowing arrangement, which has its own structuring requirements, and it engages superannuation rules, tax rules and, critically, financial product advice that requires an Australian Financial Services Licence. This is not general-information territory. Anyone considering commercial property in an SMSF should get licensed financial and tax advice specific to their fund before going any further. We flag it here so you know the option exists and that it sits behind a proper advice gate, not because this page can or should guide the decision.

How LenderBridge Fits

LenderBridge has researched a panel of 297 Australian lenders across 19 categories and all 8 jurisdictions. Within it, 72 lenders carry commercial property facilities, spanning banks, non-bank specialists and private credit. That research is the work, and it is what lets us point a commercial deal towards the part of the market it actually belongs to rather than the part that happens to advertise loudest.

What we do is informational and introductory. We are not a broker, we do not provide credit assistance and we do not recommend a specific loan. We take the details of a commercial project, check them against the published criteria of the lenders we have researched, and introduce the borrower to lenders whose stated appetite fits. The decision, the assessment and the advice rest with the borrower and the lender. Where a referral fee applies, it is disclosed.

Frequently Asked Questions

General information only, not credit assistance or financial product advice. LenderBridge connects borrowers and lenders; it does not advise or recommend. Verify figures with a lender.