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A commercial property loan finances the purchase or refinance of non-residential property: offices, warehouses, factories, shops, medical suites, childcare centres and mixed-use buildings. Formation Finance arranges commercial loans for business owners buying their own premises, investors buying tenanted property, and self-managed super funds.
We’re a Melbourne-based team with access to 50+ lenders: the major banks, non-bank and specialist lenders, and private lenders. We compare them on rate, LVR, paperwork and speed, then tell you which one fits your deal. If a bank is cheapest and can meet your timeline, we’ll say so. All commercial loans we arrange are for business or investment purposes.
| Feature | Indicative range |
|---|---|
| Loan amount | Private and short-term loans $200,000 – $20,000,000 · Bank and non-bank loans case by case |
| Maximum LVR | Up to 70–75% for standard offices, warehouses and shops. Lower for rural or specialised assets such as childcare, medical and hospitality. SMSF loans typically 70% or less |
| Interest rate | Bank and non-bank loans priced deal by deal · Private lenders from 7.95% p.a. |
| Term | Bank loans 5–30 years · Private loans 3–24 months, interest only |
| Documentation | Full doc, low doc, lease doc, or security-and-exit based private loans |
| Property types | Office, industrial, warehouse, retail, medical, childcare, hospitality, mixed-use and development sites |
| Borrowers | Individuals, companies, trusts and SMSFs |
| Typical timeframe | Indicative terms within 24–72 hours · Private funding typically 3–10 business days · Bank loans typically 6–12 weeks to funding |
All figures are indicative only and not an offer of finance. Rates, LVR and terms depend on the property, lease, borrower and lender approval. For business and investment purposes only.
Banks don’t publish standard commercial rates, and each lender sets its own LVR, paperwork and property rules. The same warehouse can be approved at one lender and declined at another. Our job is to put the right lenders side by side for your deal.
| Major banks | Non-bank and specialist lenders | Private lenders | |
|---|---|---|---|
| Rate | Usually the lowest, priced deal by deal | Higher than banks | From 7.95% p.a. |
| Maximum LVR | Typically 65–70%; bank lease doc products are often capped at 65% | Up to 75–80% on some products | Up to 75% |
| Paperwork | Full doc; lease doc at some banks | Full doc, low doc and lease doc | Based on the security and exit; tax returns generally not required |
| Term | 5–30 years | Long term, up to 30 years on some products | 3–24 months |
| Speed | Typically 6–12 weeks to funding | Varies by lender | 3–10 business days to funding |
| Best for | Strong financials, standard property, and time to wait | Self-employed borrowers, lease-only income, late tax returns, non-standard property | Urgent settlements, deals a bank has declined, short-term holds before refinancing |
For most commercial purchases, a bank or non-bank loan is the right fit. Private lending is for when speed or flexibility matters more than rate, and it should have a clear plan to refinance or sell.
Commercial lenders look at the property first and the borrower second. These five things decide how much you can borrow and at what rate.
LVR is the loan divided by the lender’s valuation, not the price you agreed to pay. If the valuation comes in below the contract price, the loan is based on the lower figure and you fund the gap.
Lenders rank property by how easily they could sell it. A standard metro office, warehouse or shop gets the highest LVR. Specialised property, such as a childcare centre, medical centre, hotel or pub, usually gets a lower LVR because fewer buyers can use it. Regional property is often discounted too.
For an investment property, the rent has to cover the interest with room to spare. Lenders measure this with an interest cover ratio (ICR): a year’s rent divided by a year’s interest. Many lenders want at least 1.2 to 1.5 times.
Example: rent of $90,000 a year on a $750,000 loan at 8% gives interest of $60,000 and an ICR of 1.5.
For a property you’ll occupy, the lender looks at whether your business cash flow covers the repayments instead.
Lenders read the lease closely: how many years are left, any options to renew, who the tenant is and how reliable the rent is. A short remaining lease can mean a shorter loan term or a lower LVR.
Lenders check who is borrowing (individual, company, trust or SMSF), your experience with commercial property, other debts and your ATO position. Raise any tax debt in the first conversation. Disclosing it early avoids surprises late in the application.
For business owners buying their own premises, such as a warehouse, clinic or office. The lender assesses your business cash flow alongside the property, so up-to-date financials help you get the best rate and LVR.
For investors buying tenanted property. The lease and the rent drive the assessment, and the interest cover ratio decides how much you can borrow.
Assessed on the rent from the lease rather than your tax returns. They suit trusts and companies with complex financials, and investors whose tax returns are late. Bank lease doc products tend to cap the LVR lower and limit the loan size, so we often compare them with non-bank options.
Low doc loans replace tax returns with BAS, bank statements or an accountant’s letter. No doc loans are short-term private loans assessed on the property and your exit. See our private lenders loans.
Since 10 August 2026, a self-managed super fund can only take out new property borrowing to buy business real property, which means commercial premises. Your SMSF borrows through a limited recourse borrowing arrangement, with the property held in a separate holding trust. Fewer lenders offer these loans, LVRs are typically 70% or less, and many lenders ask members for personal guarantees. Work with your accountant or SMSF adviser on the structure before you sign a contract.
Refinance to a better rate or a longer term, or release equity for the business or your next purchase. If you want to keep your current loan in place, a second mortgage may be faster.
For settlements that can’t wait for a bank, or for holding a property while a sale or refinance completes. See short-term property loans.
For buying commercial or industrial land, or sites before development approval. See land loans and property development loans.
What you need depends on the loan type. A complete pack at the start is the fastest way to an approval.
Reviewed by Jackie Wang, Partner at Formation Finance
Jackie Wang has over 10 years of experience in finance and lending and holds a Master of Professional Accounting from RMIT University. Jackie has reviewed this page to ensure the LVRs, loan terms, timeframes and lending criteria reflect current market conditions.
Last reviewed: 12/11/2026
Most lenders go up to 70–75% for standard offices, warehouses and shops in good locations. Specialised and rural property, lease doc loans and SMSF loans usually sit lower, with SMSF loans typically at 70% or less. Private lenders go up to 75% for short-term loans.
Usually 25–35% of the purchase price, plus stamp duty and purchase costs. The exact amount depends on the property type and the lender’s valuation, not just the price you pay.
Yes. A lease doc loan is assessed on the rent from the lease instead of your tax returns. The rent needs to cover the interest, commonly by at least 1.2 to 1.5 times, and the lease needs enough time left to run.
Yes. Since 10 August 2026, commercial premises are the only property an SMSF can take on new borrowing to buy. The loan must be a limited recourse borrowing arrangement, LVRs are typically 70% or less, and the fund needs enough cash to meet repayments. Get advice from your accountant or SMSF adviser first.
Each lender prices the deal individually. The main factors are the LVR, property type and location, the lease and tenant, the loan size and the borrower’s financial strength. Variable rates also move with the RBA cash rate, which rose to 4.85% on 3 November 2026.
We can usually give indicative terms within 24–72 hours. Private loans typically fund in 3–10 business days. Bank loans typically take 6–12 weeks to fund, depending on the valuation and how complete your documents are.
Yes. We’re based in Melbourne and arrange commercial loans across Australia, including Sydney, Brisbane, Perth, Adelaide and regional areas, subject to each lender’s location policy.
