A commercial property loan is finance for buying or refinancing property used for business, such as offices, shops, warehouses, and industrial units. It works differently to a home loan. Most lenders lend 65% to 70% of the property’s value, so you usually need a 30% to 35% deposit. There’s no lender’s mortgage insurance to bridge a smaller deposit, and terms are often shorter.
This guide covers how commercial property loans work in 2026, what lenders check before they approve one, how much deposit you’ll realistically need in Sydney, and the legal difference most borrowers don’t know about until they’re signing documents.
Key points
- Most lenders cap a commercial property loan at 65% to 70% of the property’s value. Owner-occupiers with strong financials can sometimes reach 80%.
- There’s no LMI on commercial lending, so the deposit gap can’t be covered by insurance the way it can on a home loan.
- Commercial loans used mainly for business purposes generally sit outside the consumer protections of the National Credit Code.
- The lease matters as much as the property. A short lease or a weak tenant can reduce how much a lender will advance.
- Western Sydney holds 97% of Greater Sydney’s remaining undeveloped industrial land, according to Ray White Commercial’s 2025 report.
What is a commercial property loan?
A commercial property loan is a loan secured against property that’s used for business or investment, rather than as a home. That includes offices, retail shops, warehouses, factories, medical suites, and mixed-use buildings. The property itself is the main security for the loan.
There are two broad types of borrower:
- Owner-occupiers buy premises their own business trades from. Lenders generally see these as lower risk, because the borrower has a direct interest in keeping the property running.
- Investors buy commercial property to lease to someone else. Here, the lender looks closely at the tenant, the lease, and the rental income the property produces.
The difference matters because it changes the deposit, the lender panel, and the documents you’ll need. Two buyers looking at the same warehouse can be offered quite different terms depending on whether they plan to use it or lease it.
How is a commercial property loan different from a home loan?
A commercial property loan needs a bigger deposit, has no LMI, usually runs over a shorter term, and is reviewed by the lender during its life. Lenders also assess the property’s income and lease, not only your personal finances.
| Feature | Home loan | Commercial property loan |
| Typical maximum LVR | Up to 95% with LMI | Usually 65% to 70%, sometimes up to 80% for owner-occupiers |
| Lenders mortgage insurance | Available | Not available |
| Typical loan term | Up to 30 years | Often 15 to 25 years |
| Ongoing reviews | Rare | Common, often every 1 to 3 years |
| What the lender assesses | Your income and expenses | Your finances plus the property, lease, and tenant |
| Consumer credit protections | Generally apply | Generally don’t apply to business-purpose loans |
The review point catches a lot of first-time commercial borrowers off guard. Many commercial loans include a periodic review, where the lender checks the property’s value, the lease position, and your financials again. If something has weakened, the lender can ask for changes before rolling the facility over.
How much deposit do you need for a commercial property loan?
Most borrowers need a deposit of 30% to 35% of the purchase price, because most lenders cap commercial lending at 65% to 70% LVR. Owner-occupiers with strong financials may reach 80% LVR, while specialised or higher-risk properties can drop to 50% to 55%.
Here’s roughly how the LVR ladder looks across lenders:
- Up to 80% LVR: owner-occupiers with strong trading history and standard property types, from selected lenders.
- 65% to 75% LVR: standard offices, retail, and industrial property with a solid lease.
- 50% to 60% LVR: specialised properties (such as a purpose-built childcare centre or hotel), short leases, or vacant premises.
- 25% minimum deposit: typical floor for low doc commercial loans, where full financials aren’t available.
The deposit is only part of the cash a purchase needs. On top of it you’ll usually pay:
- NSW transfer duty (stamp duty), which applies to commercial property in NSW. South Australia is the only state that has abolished it on qualifying commercial property.
- GST, depending on how the property is sold. Whether a contract attracts GST is a question for your accountant or solicitor before you sign.
- Valuation, legal, and loan establishment costs, which tend to be higher on commercial deals than on home loans.
“The question I ask before anything else is what the lender will actually advance on this specific property,” says Rajeev Vij, founder and broker at LendWise. “I’ve learned not to plan around a market average. A warehouse with a five-year lease and a café with eight months left on its lease can be in the same suburb and need completely different deposits.”
What do lenders look at when assessing a commercial property loan?
Lenders assess the property, the lease, the tenant, and your own financial position together. On an investment purchase, the property’s income can carry as much weight as your personal income. On an owner-occupied purchase, your business’s trading history takes the lead.
The main things a lender checks:
- Property type and location. Lenders have clear preferences. Standard industrial, office, and retail property is easier to finance than specialised buildings with a single use.
- The lease. Length, terms, and how much time is left. A longer lease with a reliable tenant supports a higher LVR.
- The tenant. A national retailer on a long lease is assessed very differently from a new small business on a short one.
- Your business or investment financials. Usually two years of tax returns and financial statements, plus BAS for owner-occupiers.
- Rental income cover. For investment property, lenders check whether the rent comfortably covers the repayments.
- Your existing debts and assets. Including any other properties or business borrowing.
Vacant property is the hardest to finance, because there’s no rental income to support the loan and no proven tenant demand. If you’re buying a vacant site to occupy yourself, expect the lender to lean much more heavily on your business financials.
Are commercial property loans regulated the same way as home loans?
Generally, no. Under the National Consumer Credit Protection Act 2009, the National Credit Code applies to loans used wholly or predominantly for personal, domestic, or household purposes, and to residential property investment. A loan used mainly for business purposes generally falls outside it.
That has real consequences for borrowers. The responsible lending checks that apply to a home loan, where the lender must assess whether the loan is unsuitable for you, generally don’t apply to a business-purpose commercial loan. Lenders often ask borrowers to sign a business purpose declaration, which supports the loan being treated as unregulated.
This doesn’t make commercial loans risky by default. It does mean the loan terms, review clauses, and default conditions deserve a careful read before you sign, ideally with your solicitor. ASIC has taken action against lenders who used business purpose declarations to avoid consumer protections on loans that were really for personal use, so the declaration must genuinely reflect what the money is for.
“I always walk clients through the review and default clauses before they sign,” says Rajeev Vij. “On a home loan, a lot of protections sit in the background. On a commercial loan, the contract does more of the work, so I want people to understand exactly what they’re agreeing to.”
Which types of commercial property are lenders favouring in Western Sydney?
Industrial property is the type lenders are most comfortable with across Sydney right now. CBRE’s 1H26 vacancy report put national industrial vacancy at 3.2%, below the 4% level the sector treats as balanced. Office property, particularly older secondary stock, faces tougher lender scrutiny.
The figures vary by research house, because each one measures differently. JLL’s Q2 2026 data put Sydney’s industrial vacancy at 5.8%, with the Outer North West precinct at 3.3%. Either way, the picture is far from the “under 2%” figure still repeated in some older guides. That was true of 2023’s record-low market, not 2026.
Western Sydney has a structural advantage here. Ray White Commercial’s Western Sydney Industrial Report found the region accounted for 68% of Greater Sydney’s $6.2 billion in industrial sales through September 2025, and controls 97% of the city’s remaining undeveloped industrial land. That supply of land, plus established hubs around Marsden Park, Eastern Creek, and the airport corridor, is why lenders tend to view well-located Western Sydney industrial units favourably.
“I’m based in Melonba, a few minutes from the Marsden Park industrial area, so I see a lot of these units up close,” says Rajeev Vij. “Small strata industrial units are popular with tradies and small business owners who are tired of paying rent. The ones that finance best are standard units with good truck access, not oddly configured spaces that only suit one type of business.”
What types of commercial property loans are available?
Several loan structures sit under the commercial property umbrella. Which one fits depends on how you’ll use the property, how your finances are documented, and who owns it.
- Owner-occupied commercial loans for businesses buying their own premises. These typically get the strongest LVRs.
- Commercial investment loans for buying property to lease out, assessed heavily on the lease and tenant.
- Low doc commercial loans for self-employed borrowers without two years of full financials, usually with a minimum 25% deposit.
- SMSF commercial property loans for self-managed super funds buying business real property through a limited recourse borrowing arrangement. Suitability is a question for your accountant and a licensed adviser.
- Commercial refinancing for moving an existing loan when a review is approaching, a fixed term is ending, or your situation has changed.
Each of these has its own lender panel. Major banks don’t all offer every structure, and some, like SMSF lending, are handled mainly by specialist lenders. A commercial loan broker in Sydney can tell you which lenders actually write the structure your deal needs before you spend time on applications.
Frequently asked questions
Can I get a commercial property loan with a 20% deposit?
Sometimes, but it’s not the norm. An 80% LVR is usually only available to owner-occupiers with strong financials buying a standard property type, through selected lenders. Most investors and borrowers buying specialised property should plan for a 30% to 35% deposit, plus purchase costs on top.
Is there LMI on a commercial property loan?
No. Lenders mortgage insurance isn’t offered on commercial property lending. This is the main reason commercial deposits are larger than home loan deposits. Some borrowers use equity in another property as additional security to reduce the cash they need upfront.
How long can a commercial property loan term be?
Most commercial property loans run for 15 to 25 years, with some lenders offering longer terms for certain property types. The loan may also include periodic reviews, often every 1 to 3 years, even when the overall term is longer.
Can I buy commercial property in my company’s name?
Yes. Commercial property is often bought through a company, trust, or SMSF rather than in a personal name. Lenders will usually ask the directors for personal guarantees. The right ownership structure depends on tax and asset protection, so speak with your accountant before you sign a contract.
Do I pay stamp duty on commercial property in NSW?
Yes. NSW transfer duty applies to commercial property purchases. The NSW first home buyer exemptions only apply to residential property, so they don’t reduce duty on a commercial purchase. GST may also apply depending on how the sale is structured.
What happens at a commercial loan review?
At a review, the lender checks whether the loan still meets its conditions. That usually means a fresh look at the property’s value, the lease and tenant, and your financial statements. If everything holds up, the facility continues. If the position has weakened, the lender may ask for changes, such as a reduced loan amount or extra security.
Conclusion
A commercial property loan rewards preparation. The deposit, the lender panel, and even the loan’s legal framework all depend on what the property is, how it’s leased, and how you’ll use it. Knowing what a lender will advance on a specific property, before you agree on a price, is the step that saves the most time and money.
LendWise compares commercial property loans across bank and specialist lenders, so you can see which ones genuinely want your deal. Get in touch to talk through a property you’re considering.
