How to Get a Commercial Property Loan in Australia

Getting a commercial property loan in Australia requires a 20% to 35% deposit, at least two years of business financials, and a property that meets lender criteria. Most applications take 2 to 6 weeks from initial enquiry to unconditional approval, depending on the lender type and your documentation. Here is the step-by-step process and what you need at each stage.

Why the process differs from residential lending

Commercial property lending involves more assessment layers than a standard home loan. Lenders evaluate both your financial position and the property's income-producing potential, lease profile, and resale risk. In 2026, APRA's new debt-to-income limits cap banks at issuing no more than 20% of new mortgage lending above a DTI ratio of six. While this primarily targets residential, it has tightened overall lending appetite and made commercial property loans more scrutiny-intensive across the board.

Step-by-step: from enquiry to settlement

The commercial loan process follows a predictable sequence. Knowing what happens at each stage helps you prepare documents early and avoid delays.

Total timeline: 2 to 6 weeks for a straightforward deal with a major or second-tier bank. Non-bank lenders can sometimes settle in as little as 5 to 10 business days for well-documented applications. Complex situations involving multiple entities, specialised property, or low-doc requirements typically take 4 to 8 weeks.

Documents you need: checklist by borrower type

The documentation package varies depending on whether you are an owner-occupier or investor, and whether you are applying on a full-doc or low-doc basis.

Missing or incomplete documents are the most common cause of delays. Having your accountant prepare a current financial summary before you apply can save 1 to 2 weeks in the process.

What lenders assess beyond your documents

A complete document package does not guarantee approval. Lenders run a multi-factor assessment that covers you, your business, and the property itself.

Your financial position

Lenders look at your credit score (650+ is the baseline for most bank lenders), existing debt levels, and net asset position. A clean credit history with no defaults or judgements in the past 5 years significantly improves your options. If you have existing property debt, lenders calculate your total exposure and serviceability across all loans.

Your business performance

For owner-occupiers, lenders want to see a business that is trading profitably and can service the loan from operating cash flow. Two years of stable or growing revenue is the minimum for most bank lenders. Businesses trading less than 2 years may qualify through non-bank lenders, but at higher commercial property loan interest rates.

Debt service coverage ratio (DSCR)

DSCR measures whether the property's net income covers the loan repayments. Most lenders require a DSCR of at least 1.25x to 1.5x, meaning the property's net income must be 25% to 50% above the annual loan repayments. On a loan with $80,000 in annual repayments, lenders want to see net property income of at least $100,000 to $120,000.

For owner-occupiers, lenders may use business income rather than rental income to calculate DSCR, which can work in your favour if your business has strong cash flow.

The property itself

Lenders assess the property's type, location, condition, lease profile, and resale potential. Standard metro office, industrial, and retail assets attract the best terms. Specialised properties like childcare centres, petrol stations, or hospitality venues face stricter assessment due to limited buyer pools.

In 2026, industrial property is the easiest asset class to finance. National industrial vacancy sits below 2%, compared to CBD office vacancy of 12% to 14%. A well-located warehouse or logistics facility will receive faster approval and better pricing than equivalent office or retail space.

LVR and deposit: what you need to bring

Your loan-to-value ratio determines how much deposit you need. Commercial LVRs typically range from 60% to 80%, depending on the lender, property type, and your documentation level.

Remember that your deposit is only part of the upfront cash required. Stamp duty, legal fees, valuations, and lender establishment fees typically add 5% to 8% on top. For a detailed breakdown, see our guide to commercial property loan deposits.

Choosing your lender: bank vs non-bank

Where you apply matters as much as how you apply. Each lender type suits different borrower profiles.

A broker with access to multiple lender panels can identify which lender offers the best combination of rate, LVR, and turnaround for your specific situation. The difference between lenders on the same deal can be significant. One lender might offer 65% LVR at 7.5%, while another offers 75% at 8%. That 10% LVR gap on a $2 million property means $200,000 less cash deposit required.

Common reasons commercial loans get declined

Understanding why applications fail helps you avoid the same mistakes.

Insufficient trading history. Most bank lenders require a minimum 2 years of business operation. Startups and businesses under 2 years old need to look at non-bank options or provide additional security.

Property does not meet lender criteria. Specialised, regional, or single-use properties are harder to finance. If the property has a limited buyer pool, lenders reduce LVR or decline outright.

DSCR below threshold. If the property's income does not cover repayments by at least 1.25x, the loan will not proceed without additional security or a lower loan amount.

Credit issues. Defaults, judgements, or ATO debt on your credit file narrow your options to non-bank lenders at higher rates. Clear any outstanding issues before applying where possible.

Incomplete documentation. Applications missing key documents get queued behind complete submissions. Lenders process the easiest deals first.

Tips for first-time commercial property buyers

If this is your first commercial purchase, the process can feel more involved than residential. These steps will improve your outcome.

Get pre-qualified before you start looking. Knowing your borrowing capacity and LVR limits before inspecting properties prevents wasted time on assets you cannot finance.

Use a broker with commercial experience. Commercial lending is specialist work. A broker who primarily does home loans may not know the nuances of commercial property assessment, lender appetite, or structure options.

Budget for the full cost, not just the deposit. Stamp duty, legal fees, valuations, and lender fees typically add 5% to 8% beyond your deposit. On a $1 million purchase, that is $50,000 to $80,000 in additional costs.

Get your financials audit-ready early. Ask your accountant to prepare a current financial summary and ensure your ATO portal shows no outstanding obligations. This single step can save weeks in the approval process.

Understand the lease before you buy (investors). The property's lease terms directly affect your borrowing capacity. A strong lease with a national tenant on a 5+ year term supports higher LVR and better rates. A month-to-month tenancy may reduce your LVR by 10% or more.

This article is general information only and is not financial advice.