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How Commercial Property Lending Is Assessed
Commercial lenders look at both the property and the borrower before approving finance. Lease arrangements, rental income and the entity’s financial position all influence how a loan is structured.
When assessing commercial property loans, lenders review:
- Financial statements and borrowing capacity
- The property type and location
- Lease agreements and tenant strength
- Deposit size and loan-to-value ratio
- The borrowing entity and ownership structure
Commonly Financed Commercial Properties
Businesses and investors arrange business property loans to finance a wide range of commercial assets.
These may include:
- Office buildings and professional suites
- Warehouses or industrial facilities
- Retail premises and shopfronts
- Medical, hospitality or specialised commercial sites
The property type will influence loan structure, deposit requirements and how lenders assess risk.
How We Help With Commercial Property Loans
Before approaching lenders, we review the proposed purchase and the borrower’s financial position. In some cases, borrowers may also explore refinancing their existing loans to restructure debt or release equity before purchasing a commercial property.
As a commercial lending broker, we assist with:
- Reviewing financial documents and loan structure
- Discussing the property being purchased or refinanced
- Comparing lenders offering commercial lending
- Liaising with lenders during the approval process
If you are planning a commercial purchase, we can help you understand how lenders are likely to view the transaction before submitting an application.
Lease Strength and Loan Structure
Properties with established tenants and longer lease terms can provide lenders with greater confidence in the income supporting the property. Where a property is vacant or leased on shorter terms, lenders may take a more conservative view when assessing the loan.
What to Expect: Arranging Commercial Property Loans
At Pinnacle Brokers, we assist commercial borrowers across Australia. As a commercial mortgage broker, we work with major banks and specialist lenders that actively support commercial property lending.
When you speak with our commercial lending brokers, we begin by discussing the property and the borrowing structure involved. From there, we review lender options and outline how each loan structure may align with the proposed purchase so you can move forward with a clear view of your borrowing options.
Book an Appointment to Discuss Commercial Lending
During a consultation, we review the proposed purchase, discuss lending structures and outline lenders currently active in commercial lending.
If you are considering a commercial purchase, we can walk through the lending options and explain how lenders may assess the property before you proceed. Contact Pinnacle Brokers to discuss your commercial property loans.
Frequently Asked Questions
Find quick answers to common questions using our helpful FAQs.
What deposit is required for commercial property loans?
Deposits for commercial property loans usually range between 20% and 35%, depending on the property type, lease strength and borrower profile. If you are planning a purchase, we can review the property and explain what lenders are likely to require before you approach a bank.
What interest rates apply to commercial property loans?
Interest rates for commercial property loans vary depending on the lender, the borrower’s financial position and the property being financed. We can compare lenders and walk you through how different loan structures may affect the rate offered.
How long are commercial property loan terms?
Many lenders structure commercial property loans with terms of up to 15–30 years, although the exact structure depends on the property and borrower profile. We can help you understand what loan term options lenders are currently offering.
Can a business purchase its own premises with a commercial loan?
Yes, businesses often use business property loans to purchase premises they intend to occupy. Lenders usually assess both the business’ financials and the property before approving finance.
Can commercial property loans be used to refinance existing financing plans?
Yes, refinancing can be used to restructure an existing loan, access equity or move to another lender. If you are reviewing your current loan, we can help compare refinancing options and explain how lenders may assess the property.
Do I need a broker to arrange commercial property finance?
Commercial lending policies vary widely between banks and specialist lenders, and some lenders work primarily through broker channels. Speaking with a commercial mortgage broker can help you understand which lenders may be suitable for your situation.
Do you still have some questions?
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