What deposit is generally required for commercial property?

It depends on the lender, the asset and the location. Commercial loans are typically written at lower loan-to-value ratios than residential lending, and specialised properties may need a larger contribution from you. Lender policy, the lease profile and your servicing position all influence the final figure.

Can I use residential property as security for a commercial loan?

Often, yes. Cross-collateralising residential equity can reduce the cost of commercial funding or improve the loan-to-value position, although it ties the assets together. That trade-off should be considered carefully before proceeding.

How long does commercial approval take?

Indicative terms can sometimes be obtained within days. Formal approval generally depends on valuation timing and the completeness of the information provided — financial statements, lease documents, rates notices and, for development, feasibility and cost estimates.

Do I need financial statements to apply?

For established businesses, most lenders require at least two years of financial statements together with recent management accounts. Asset-based facilities exist for some scenarios but are usually more restricted in structure.

Commercial Finance Broker Melbourne

Commercial property purchases and refinancing

Whether you are buying an office, retail, industrial or mixed-use property, or refinancing an existing commercial loan, the lender's decision comes down to the quality of the income and the strength of the borrower behind it. The purchase price is only one part of the picture.

Purchase of owner-occupied or investment commercial property
Refinancing to improve pricing, terms or facility structure
Releasing equity from an established commercial asset
Consolidating multiple facilities into a single arrangement

Commercial investment property finance

Investment commercial property is assessed differently to residential. Lenders look at the net income, the strength of the tenants, when the leases expire, vacancy risk and what else the property could be used for. An application prepared the residential way rarely gives a commercial credit team what it needs.

Single-tenant and multi-tenant assets
Lease expiry and income concentration review
Interest-only periods aligned to the lease term
Portfolio acquisitions and strata-titled holdings

Commercial construction and development funding

Construction and development finance is released in stages, conditional at each step and supported by detailed documentation. The lender is assessing more than the borrower: the feasibility, the builder, the pre-sales position and the cost to complete all carry weight.

Residential and commercial development facilities
Construction loans with progressive drawdowns
Land acquisition and subdivision funding
Coordination with quantity surveyors and project managers

Business premises and owner-occupied property

Buying the premises your business operates from can change your cost base and your balance sheet at the same time. It also means the business is assessed against commercial lending criteria as well as its own trading performance.

Owner-occupied commercial and industrial purchases
Business equity contribution options
Blended security across residential and commercial assets
Premises held in a self-managed super fund, with independent advice

How commercial lenders assess the application

Commercial credit decisions take longer and ask more questions than residential ones. Understanding what the assessor is actually testing means the file can be prepared properly the first time, rather than information being supplied piece by piece after lodgement.

Cash flow and servicing

Servicing is tested against the income of the borrower, not just the property. For investment assets, lenders use the net rent after outgoings; for owner-occupied premises, the strength of the business's trading carries most of the weight.

Loan-to-value and security

How much a lender will advance varies by asset type and location. Specialised properties, assets with short leases and towns reliant on a single industry generally attract more conservative lending.

Lease profile and tenant covenant

A long lease to a strong tenant is worth more to a lender than a higher rent from a weaker one. In commercial lending the lease is part of the security, and it is read that way.

Exit strategy

Commercial loans are usually reviewed rather than paid down over the term. Lenders want a clear answer on how the debt will be reduced or refinanced when the term ends.

Commercial lending structures

Structure is where commercial funding is often won or lost. The right structure keeps investment and owner-occupied debt separate, matches the type of facility to its purpose, and leaves room to move as the business or portfolio grows.

Interest-only and principal-and-interest facilities
Fixed, variable and split rate arrangements
Revolving lines of credit and progressive drawdown facilities
Company, trust and self-managed super fund ownership, subject to independent legal and tax advice

Insight

Credit teams rarely decline a sound transaction. They decline applications they cannot follow. A clearly presented feasibility, a credible servicing position and a documented exit strategy often do more for an application than a marginally better interest rate.