Commercial Property Loans in Sydney

A commercial property loan is a finance product specifically designed for the purchase, refinance, or development of property used for business or investment purposes. Unlike a standard home loan, commercial lending assesses the income-generating capacity of the property, the strength of any existing lease, and the financial position of the borrowing entity — whether that's an individual, a company, a trust, or a self-managed superannuation fund (SMSF).

In Sydney's active commercial market, these loans are used to finance everything from strata office suites in the CBD to industrial warehouses in Western Sydney, retail shops in suburban strip centres, childcare centres, medical practices, and mixed-use developments.

Commercial property loans differ from residential finance in several important ways:

• Higher deposit requirements. Most lenders require a deposit of 30–40% of the property's value, though owner-occupiers can sometimes access up to 80% LVR with the right lender.
• No Lenders Mortgage Insurance (LMI). Unlike residential loans, there is no LMI product available for commercial lending. Your equity position directly determines your rate and terms.
• Risk-based pricing. Interest rates are set based on property type, location, tenant quality, lease profile, borrower financials, and LVR — not a published rate sheet.
• Annual reviews. Many commercial loans are subject to periodic lender review, which is why structuring the loan correctly from day one matters.
• Governed differently. Commercial loans are not subject to the National Consumer Credit Protection Act (NCCP), giving lenders more flexibility — and making expert advice more important.

Interest rates on commercial property loans vary considerably depending on your situation. As of early 2025, rates in the Australian market range broadly as follows:

Rates are indicative only. Actual rates depend on LVR, property type, lease profile, borrower financials, and lender appetite at the time of application. This is general guidance and not financial advice.

Key factors that determine your commercial loan rate:

• Loan-to-Value Ratio (LVR): Loans at or below 65–70% LVR attract the most favourable rates.
• Property type: Standard commercial assets (offices, warehouses, retail) attract better rates than specialised properties.
• Location: Sydney metropolitan properties, particularly CBD and established industrial corridors, are viewed more favourably.
• Tenant quality and lease profile: Long-term leases to government, national retailers or ASX-listed companies can unlock lower rates.
• Borrower financials: Strong revenue, stable cash flow and a clear business track record improve your application.
• Full Doc vs Low Doc: Full documentation consistently achieves better rates than low-doc alternatives.
• Owner-occupied vs investment: Business owners purchasing their own premises typically receive rates 0.3–0.5% lower than pure investors.

The Loan-to-Value Ratio (LVR) is the percentage of the property's value that a lender is willing to finance. In commercial lending, LVR determines your minimum deposit requirement. Unlike residential lending, there is no LMI product — your equity directly limits your borrowing capacity.

Typical LVR by property type (Sydney, 2025):

So if you're purchasing a $2 million warehouse and your lender will go to 65% LVR, you'll need a minimum deposit of $700,000 — plus costs such as stamp duty, legal fees, and the lender's establishment fee. Major banks typically cap commercial LVRs at 65%. Non-bank specialists can reach 75–80% LVR but charge a rate premium. A broker identifies which lender delivers the best combination of LVR, rate and terms for your situation.

Understanding what lenders look for helps you prepare a stronger application. Commercial loan assessment is holistic — no single factor makes or breaks an application, but collectively they build the lender's view of risk.

Being prepared with the right documents from the outset speeds up assessment and demonstrates credibility. Requirements vary by lender and loan type; you should generally expect:

Personal / guarantor documents:

• Photo identification (passport or driver's licence)
• Last 2–3 years personal tax returns and ATO Notice of Assessment
• Current personal financial statement (assets, liabilities, income)
• Bank statements (typically 3–6 months)

Business / entity documents:

• ABN and ACN registration
• Last 2–3 years business tax returns and financial statements (P&L, balance sheet)
• Business Activity Statements (BAS) — typically 4 quarters
• Company or trust documents (constitution, trust deed)

Property documents:

• Signed contract of sale
• Professional valuation report (arranged by the lender)
• Existing lease agreements and rent rolls (for investment properties)
• Building and pest inspection reports; council rates and body corporate levies (where applicable)

For SMSF loans, additional requirements include:

• SMSF trust deed, financial statements and audited accounts, investment strategy
• Trustee identification documents, bare trust deed, SMSF contribution statements

Low doc loans substitute some of the above with alternative income verification such as an accountant's declaration, GST registration evidence, and BAS statements.

Choosing the right lender type is as important as choosing the right loan product. Each category has a different risk appetite, speed, and pricing profile.

A commercial mortgage broker gives you access across all of these categories — matching your situation to the lender most likely to approve your loan at the best possible terms, without creating unnecessary credit enquiries on your file.

We arrange commercial property loans across all major asset classes in Sydney and surrounding regions, including:

• Office buildings and strata offices (CBD, North Shore, Parramatta, Macquarie Park)
• Industrial and warehouse properties (Western Sydney, South Sydney, Northern Beaches hinterland)
• Medical suites and healthcare properties
• Childcare centres
• Retail shops and strip centres
• Mixed-use buildings (commercial/residential combinations)
• Factories and manufacturing facilities
• Self-storage facilities
• Hospitality venues and restaurants
• Commercial development sites and land
• Rural and agricultural properties

If you're unsure whether your target property is financeable, speak to us. We assess the deal rather than making assumptions.

Sydney remains Australia's most active and liquid commercial property market. Understanding current market conditions helps frame your financing decision.

The value of commercial property loans in Australia reached $20.9 billion in March 2025 — an increase of 37% from March 2023. This reflects sustained investor and business owner appetite for commercial property despite higher interest rates, driven by strong rental yields, inflation-linked rent reviews, and long-term capital growth potential.