Financing Commercial Property: What Buyers Need to Know
Christian Stevens, Mortgage Broker
Published January 31, 2025, 2:10 p.m ET
Buying commercial property — whether it’s an office, warehouse, retail space, or industrial unit — opens a world of investment opportunities beyond residential real estate.
But commercial property finance works very differently to home loans. Here’s what every Australian buyer needs to understand before diving in.
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🔑 Key Facts
- Commercial property loans differ from residential in loan structure, deposit size, and lender assessment.
- Buyers can be individuals, trusts, SMSFs, or companies — each with different lending implications.
- Rental yield, lease terms, and tenant quality play a big role in approval.
- Flint helps buyers finance offices, warehouses, retail and medical premises with tailored lending strategies.
How Commercial Property Loans Differ from Home Loans
Key differences include:
- Loan-to-Value Ratio (LVR): Most lenders require a larger deposit (typically 30–40%).
- Interest Rates: Generally higher than standard home loans.
- Loan Terms: Shorter loan terms (often 15–25 years instead of 30 years).
- Assessment Focus: Based more on the property’s lease income than personal income.
- Fees: Higher setup costs, valuation fees, and legal fees.
What Lenders Look For
When assessing a commercial property loan, lenders consider:
- The type of property and its location
- The quality and term of any leases in place (“tenant strength”)
- Borrower’s financial position, assets, and business experience
- Property’s potential for ongoing rental yield and capital growth
Tip: Longer, stable leases (“blue chip tenants”) significantly strengthen your application.
Types of Commercial Properties You Can Finance
Common options include:
- Retail shops
- Offices
- Warehouses and industrial units
- Medical suites
- Strata commercial units
- Mixed-use buildings
Each type has different lending policy implications, rental expectations, and risks.
Smart Strategies for Commercial Property Buyers
To improve your success chances:
- Save a larger deposit (30%+ preferred)
- Choose strong locations with high tenant demand
- Understand tenant lease structures (net vs gross leases)
- Budget for outgoings (maintenance, rates, insurance)
- Work with brokers experienced in commercial lending
📞 Ready to Finance Your Commercial Property with Confidence?
Flint’s expert brokers:
- Tailor finance strategies to your investment goals
- Access a panel of commercial lenders (banks and private)
- Help you navigate loan structures, terms, and negotiation
Speak with Flint today and let’s help you unlock your next commercial opportunity — smartly and strategically.
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