Commercial lending

Commercial lending is negotiated, not advertised

There is no rate sheet. Pricing, term and covenants are set case by case on the tenant, the lease and the borrower — which means the presentation of the file genuinely changes the offer.

65–70% Typical maximum LVR on commercial security
3–5 yr Usual term before review or refinance
1.5x Interest cover ratio most lenders require
9 Commercial funders on panel
Who is this for?

Four commercial situations

Owner-occupied and investment are assessed very differently. So is a single tenant against a multi-tenanted building.

01

Buying your own business premises

Owner-occupied commercial is the most favourably assessed. Lenders look at your business trading figures rather than a lease, and pricing is usually sharper than investment security.

02

Buying a tenanted investment

The lease is the asset. Term remaining, tenant quality, rent review mechanism and any make-good obligations all move the valuation and the LVR the lender will accept.

03

Refinancing an expiring facility

Commercial loans have review dates rather than thirty-year certainty. Starting six months before expiry is the difference between negotiating and accepting.

04

Specialised or vacant security

Childcare, medical, service stations, vacant premises. Fewer lenders, lower LVR, and the valuation approach shifts from comparable sales to income capitalisation.

Your lending options

What commercial lenders actually assess

The property matters less than the income it produces and the covenant behind that income.

Income

Interest cover ratio

Net rental income divided by interest cost. Most lenders want 1.5 times or better, and it is often the binding constraint rather than LVR.

Income

Lease term remaining

A lease with five years to run supports a much higher LVR than one with eighteen months. Options to renew help but count for less than firm term.

Income

Tenant covenant

A national retailer, a government department and a sole trader are three completely different risks on the identical building.

Security

Property type and location

Office, retail, industrial and specialised assets carry different LVR caps. Industrial has been the most favoured class for several years.

Terms

Review dates and covenants

Annual reviews, financial reporting obligations and LVR covenants are standard. Breaching a covenant can trigger repricing or repayment.

Cost

Fees are negotiable

Establishment fees of up to one per cent are common and frequently reduced. Line fees on facilities are worth challenging every time.

Rates and costs

What a commercial purchase costs

A $1.8m tenanted industrial purchase at 65% LVR with four years remaining on the lease.

Cost Typical Range Notes
Establishment fee $11,700 0.4% – 1.0% Negotiable — we push on this every time
Commercial valuation $3,200 $2,000 – $8,000 Paid by you, full valuation not a desktop
Legal and documentation $3,800 $2,500 – $7,000 Lender solicitor, charged to the borrower
Stamp duty $91,490 By state Full commercial rate, no concessions
Broker fee Quoted 0.25% – 0.75% A client fee applies — agreed in writing upfront

Indicative only, as at March 2026, using Victorian transfer duty on a commercial purchase. Commercial lending is negotiated individually and figures vary widely by lender, security type and borrower strength. Not an offer of credit.

Why Lending Institute?

Why the same deal gets three different offers

Commercial credit is discretionary. Two lenders can look at the identical building and differ by fifteen per cent on LVR and a full per cent on rate.

01

We read the credit policy, not the rate sheet

Specialist lending is decided on policy detail — how a lender treats retained profits, whether a corporate trustee is acceptable, what liquidity an SMSF must retain. We track those rules across the panel and check them before we submit.

02

The file is built for the assessor

A complex file presented well is often approved where the same file, submitted raw, is declined. Financials, structure diagrams and a written explanation go in with the application, not after a query.

03

We tell you early when the answer is no

If your file will not place at a sensible rate, you will hear that in the first conversation rather than after three weeks and a credit enquiry. That honesty costs us applications and keeps our approval rate where it is.

04

Accreditation across the specialist panel

SMSF, commercial, bridging, alt-doc and credit-impaired funders each require separate accreditation and volume to maintain. We hold and use all of them.

What usually gets in the way
  • Short remaining lease term, or a tenant with a weak covenant
  • Interest cover below 1.5 times once the assessment rate is applied
  • Specialised security valued on income rather than comparable sales
  • Vacant possession at settlement with no signed incoming lease
How we place it
  • The file presented as a credit submission, not an application form
  • Lease, tenant financials and rent review history assembled before approaching lenders
  • Three to four lenders approached in parallel so the offers can be compared
  • Establishment and line fees negotiated as a matter of routine, not exception
How it works

Understand → Compare → Apply → Settle

01 Day 0

Tell us the whole story

Including the decline, the credit event or the structure you think is a problem. Nothing is placed until we understand it.

Credit impact — none
02 Days 1–10

Structure and match

Financials reviewed, the entity structure confirmed, and the file matched to funders whose policy it genuinely fits.

Credit impact — soft enquiry only
03 Weeks 2–3

Submit with the argument attached

The application goes in with financials, add-back workings and a written explanation for the assessor.

Credit impact — enquiry recorded
04 Weeks 4–8

Settle

Specialist files run longer. We manage valuations, legal review of trust deeds and the settlement booking.

Credit impact — account reported
Run the numbers

Sanity-check the numbers first

Model the repayment on the proposed facility and test it against net rental income before you approach anyone.

Open the calculators
Common questions

Commercial lending questions

Ask a broker →

Commercial property is less liquid, valuations move with the income rather than with the housing market, and a vacancy can eliminate the cash flow entirely. Sixty-five to seventy per cent is standard, occasionally seventy-five for strong owner-occupied files with a solid trading history behind them.

It is net rental income divided by the interest cost, and most lenders want at least 1.5 times measured at an assessment rate above the actual rate. On tenanted commercial it is more often the binding constraint than LVR — plenty of deals clear the LVR test and fail on cover.

Yes, and business real property is the one category an SMSF can lease back to a member business at market rent. It is a common and legitimate structure for business owners buying their own premises, but the limited recourse arrangement has to be established correctly before exchange.

The lender reassesses the facility — valuation, covenants, your financials and the lease position. They can reprice, reduce the limit or require repayment. Starting the refinance conversation six months out is what turns a review into a negotiation rather than an ultimatum.

Yes. Lender commission on commercial lending is lower and the work is substantially greater — assembling a credit submission, approaching several lenders in parallel and negotiating terms. The fee is quoted in writing and agreed before any application, and it is typically recovered several times over in the pricing we negotiate.

Get started

Have the deal presented properly

Send us the lease, the tenant and the numbers. We will build the credit submission and take it to several lenders at once.

Parallel approachThree to four lenders, so offers can be compared.
Fees negotiatedEstablishment and line fees, every time.
Fee quoted upfrontIn writing, agreed before any application.