Commercial property finance, positioned to get approved.

What is commercial property finance?

Commercial property deals live and die on how they're presented — the same numbers can be a decline at one lender and an easy approval at another.

Commercial property finance funds the purchase, refinance or development of commercial real estate — from a business buying the premises it operates from, to an investor holding an industrial shed or a retail strip. Unlike a home loan, it isn't a rate-card exercise: lenders weigh the security type, lease covenants, tenant strength and how the servicing is framed. Getting the deal to the right desk with the right framing is most of the value a broker adds here.

The practical consequence is that commercial lending has far more dispersion than residential. Two lenders looking at the same warehouse, the same tenant and the same borrower can land on materially different leverage, different pricing and different conditions, because their appetite for that property type and that borrower profile differs. There is no single market answer to "what can I borrow" — there is only what a particular lender will do with a particular deal, which is why the sequence matters: understand the property, understand the servicing, then choose the lender. Doing it in the other order is how deals get shopped around, declined, and shopped around again with the declines attached. The differences between residential and commercial lending catch out most first-time commercial buyers, and this is the one that costs the most.

What we finance

• Owner-occupied premises — buy the building your business operates from, or move up.
• Commercial investment — offices, retail, industrial, warehousing and mixed-use.
• Refinance — reduce rates, restructure existing commercial debt or move lender as the position changes.
• Equity release & cash-out — convert built-up equity into the deposit for the next purchase or into working capital.
• Construction & development — ground-up and value-add projects (see development finance).
• Specialised security — including assets other lenders shy away from.

Property type is the first thing a lender reacts to, and the split that matters is between standard commercial security — offices, retail, industrial units and warehouses in reasonable locations, with a broad resale market — and specialised security, such as pubs, childcare centres, service stations, and purpose-built medical or aged-care assets. Specialised property is fundable, and we place it regularly; it is simply assessed more conservatively, because the lender's exit depends on a narrower pool of buyers. The distinction runs through everything below: leverage, pricing, which lenders will look at it, and how long it takes.

Owner-occupied vs investment

The single biggest fork is whether you occupy the property or lease it out — it changes how servicing is assessed and often the pricing.

On investment deals the lease is close to half the application. Lenders read the remaining term, the strength of the tenant behind it, the rent relative to market, the outgoings position and — where a property has several tenants — how the expiries are spread. A single tenant on a long lease with a strong covenant is a different proposition from three tenants whose leases all expire in the same year, even at identical rental income. Where a lease tail is short, the assessment tends to fall back onto the borrower and the property's re-lettability rather than onto the income in front of it. Owner-occupied versus investment goes through how the two assessments diverge in practice.

Deposit, LVR & equity

There is no fixed commercial deposit rule. The deposit is simply whatever the lender won't fund, which makes it an LVR question — and LVR is set by the lender's view of the security, the borrower and the loan purpose together. As a general market guide only, and with individual lender policy varying widely:

• Standard commercial security commonly attracts LVRs in the broad range of 60–80%, implying deposits of roughly 20–40% plus costs.
• Specialised property is generally funded at materially lower LVRs, so the deposit steps up accordingly.
• Residential security used for a business purpose can reach higher LVRs than commercial security supports — which is why directors' homes and investment properties appear so often inside commercial structures.

Two things routinely catch buyers out. The first is that LVR is calculated against the lender's assessed value, not the contract price, and where the two differ the lower figure usually governs — so a valuation that comes in under contract increases the cash you need, not the loan. The second is that transaction costs sit on top of the deposit: stamp duty, legals, the valuation and lender fees. Both are the reason a deal pitched slightly below a lender's ceiling, with a genuine buffer, tends to price better and approve more easily than one stretched to the last percentage point.

The deposit also doesn't have to be cash. Equity in property you already hold — commercial or residential — can do the same work, either through a cross-collateral structure that puts the existing property alongside the purchase, or through an equity release against it that keeps the two facilities separate. Our guide to commercial property deposits and equity works through how lenders size each option and where the trade-offs sit.

LVR and deposit ranges on this page are general market observations only. They vary by lender, property and scenario, do not represent an offer of finance, and nothing here is a quote.

Refinancing an existing commercial property loan

Refinancing is the most common reason established owners come to us about a property they already hold, and it is rarely just about the rate. Four situations account for most of it:

• The facility no longer fits the position. The business, the lease or the property has changed since the loan was written, and a different lender would now assess it more favourably.
• A term is expiring. An interest-only period ending, a balloon falling due or a facility reaching review — all of which have a date attached and are far cheaper to handle early than late.
• Equity release. Converting built-up equity into the deposit for the next purchase, into working capital, or into a restructure of more expensive debt.
• Structure. Untangling cross-collateralised security, separating entities, or moving from a facility that was right at purchase and isn't right now.

The honest test is the whole cost of the move against the benefit across the remaining term. That means counting break costs on any fixed portion, discharge and registration fees, a fresh valuation, legals, and the incoming lender's establishment or line fees — then asking whether the improvement clears them with room to spare. A refinance that saves on rate and loses on fees, or that resets a nearly-repaid facility back to a full term, can leave you worse off in total while looking better monthly. We work that arithmetic before recommending the move, not after. Refinancing a commercial property loan: when it actually makes sense sets out the full cost ledger and the triggers worth acting on.

Low-doc refinancing deserves its own mention, because it is where a lot of commercial owners quietly get stuck: the property and the equity are sound, but the financials are behind, the structure is complex, or the income is genuinely hard to evidence in the format the current lender wants. That is a lender-fit problem rather than a credit problem, and it is usually solvable — see servicing and doc types below.

Servicing, doc types & low-doc

Servicing is where most commercial deals are actually won or lost, and the evidence you can produce determines which lenders will look at you at all.

• Full-doc — complete financials, tax returns and ATO position. The widest lender choice and generally the strongest leverage and pricing.
• Lease-doc — the property's rental income is assessed against the proposed repayment, with limited reliance on your wider financials. Suits investment property with a solid lease in place.
• Low-doc — alternative evidence such as BAS, bank statements or an accountant's declaration, depending on the lender's policy. Generally met with a more conservative LVR and pricing that reflects the lighter verification.

None of these is a lesser product; they are different evidence routes to the same decision, and the right one depends on what you can genuinely demonstrate rather than on what you'd prefer. What does hurt a file is choosing the route badly — going full-doc with financials that don't yet show the recovery, or reaching for low-doc when a straightforward full-doc submission would have unlocked better terms. Where a borrower holds several properties alongside a trading business, lenders assess the whole group position: all income, all debt, all security. Presenting that group picture the way a particular lender wants to see it is the work that happens before lodgement, and the five factors lenders look for covers what they weigh once it lands.

What drives your pricing

Commercial pricing and leverage are set per deal, and the same borrower can see genuinely different numbers from different lenders on the same property. What moves them:

• Security type — standard commercial prices and levers better than specialised security.
• LVR — leverage and price move together; the last few percentage points are usually the most expensive.
• Lease covenants — tenant strength and remaining lease term, for investment deals.
• Servicing & doc type — full-doc, lease-doc or low-doc, and the quality of the evidence behind it.
• Loan structure — term, amortisation, any interest-only period, and fixed versus variable.
• Lender fit — appetite for the property type is decisive, and it is the one input a borrower can't see from outside.

Compare the all-in cost across the term rather than the headline rate. Establishment and line fees, valuation costs, ongoing account fees and the exit terms all belong in the comparison, and on commercial facilities they vary enough between lenders to reverse the ranking a rate table implies. You can model repayments at an example rate in the repayment calculator below, then get a real indicative range from the eligibility check.

Any figures on this page are indicative only and do not constitute a formal finance offer or approval.

Building or developing rather than buying

There's a third fork worth naming, because it changes the product rather than the pricing: whether the building already exists. A purchase or refinance of a standing asset is commercial property finance — one settlement, interest on the full balance from day one, assessed on the property and the lease. A ground-up build or a substantial value-add is construction & development finance, where the facility is drawn in stages against progress a quantity surveyor has verified, interest is commonly capitalised inside the facility, and the assessment runs on the feasibility and the exit rather than on today's valuation.

The two are often sequenced deliberately — buy the site on a commercial facility now, build on a construction facility later — and structuring the first with the second already in view avoids a refinance you didn't need. If a project is in front of you, how drawdowns and progress payments work explains how the money actually reaches the builder, and presales and LVR requirements covers the gates a development facility has to clear before it is approved at all.

How the process runs — and what lenders look for

Lenders want to see acceptable security, a credible servicing story (business or lease income), a sensible LVR and — for investment — quality tenants on solid leases. Beyond that, the sequence is fairly consistent:

• Feasibility read — the scenario is assessed against real lender appetite before anything is lodged, so you know the likely leverage and the likely obstacles up front.
• Lender selection — matched to the property type, the doc route and the structure, rather than to whoever is advertising.
• Submission — the deal is packaged the way that lender assesses it, with the servicing framed in their format.
• Valuation — usually the longest single step, and the one most likely to change the numbers.
• Formal approval, documents and settlement — conditions cleared, security registered, funds drawn.

The single biggest thing you control is readiness. Contract or existing loan statements, lease documents, financials or your chosen alternative evidence, and identification, assembled at the start, shorten the whole timeline more than any amount of chasing later. A well-presented application with the numbers framed the lender's way moves faster and prices better — and that framing is exactly what a DeMarque broker does before anything is lodged. If you want a first read on capacity before you talk to anyone, the borrowing power calculator is a reasonable starting point.

General information only. DeMarque Finance is a finance brokerage, not a licensed financial, tax or legal adviser — nothing on this page is advice about your circumstances or a recommendation to enter any particular facility.