Commercial property lending remains active despite a more restrictive borrowing environment.
New ABS data shows the value of new business loan commitments for property purchases reached $27.2 billion in the June 2026 quarter, up 4.4% from the previous quarter and 18.9% compared with a year earlier.
For businesses considering purchasing their own premises, acquiring an investment property or funding a broader expansion, that activity is a useful reminder that opportunities are still being pursued.
But securing commercial property finance involves more than finding a competitive interest rate.
The purpose of the property, the strength of the business, available security, cash flow and the proposed loan structure can all influence how a lender assesses an application.
Preparing early can make the finance process more straightforward and give businesses more time to consider the options available.
Start with the purpose of the property
One of the first things a lender will want to understand is what you are buying and why.
A business purchasing premises to operate from presents a different lending proposition to an investor purchasing a tenanted commercial property. Property development finance is different again.
Depending on the transaction, lenders may consider factors such as:
- how the property will be used
- the type and location of the property
- whether it is owner-occupied or investment
- existing or proposed lease arrangements
- the condition and marketability of the asset
- the borrower’s experience and financial position.
Being clear about the purpose of the purchase from the beginning can help identify lenders and finance structures that may be better suited to the transaction.
Understand your contribution and security position
Commercial property lending doesn’t generally follow the same rules as residential home lending.
The amount a lender is prepared to finance can vary depending on the property, borrower, industry and overall transaction.
This means businesses should understand what funds or equity they have available to contribute and what other security may be available.
That might include equity held in another property or business assets, depending on the lender and facility being considered.
It is also worth looking beyond the purchase price itself. Stamp duty, valuation, legal and professional fees and other transaction costs may need to be factored into the overall funding requirement.
Have current financial information ready
A lender needs to understand the business behind the property transaction and its capacity to meet the proposed repayments.
The information required will vary, but businesses may be asked to provide:
- recent financial statements
- current management accounts
- cash flow forecasts
- details of existing debt and finance facilities
- ATO position and tax obligations
- information about directors or guarantors
- details of leases or rental income, where relevant
- background information explaining the purpose of the transaction.
Current, accurate financial information can help lenders form a clearer picture of the business and may reduce delays caused by repeated requests for additional information.
If a transaction is being considered several months ahead, working with your accountant and finance broker early can also help identify whether anything needs to be addressed before an application is made.
Show how the debt will be serviced
A lender will also want to understand how the proposed debt will be repaid.
For an owner-occupied property, this may primarily come from the operating cash flow of the business.
For an investment property, rental income may form part of the assessment, alongside the broader financial position of the borrower.
This is where cash flow forecasting becomes particularly important.
Businesses should consider how repayments would sit alongside wages, tax obligations, equipment finance, working capital needs and other commitments.
The Reserve Bank has noted that earlier cash rate increases have flowed through to business lending rates, even while business credit growth remains strong.
That makes it important to assess whether a proposed property loan remains manageable under current borrowing conditions rather than relying on expectations of future rate movements.
Look beyond the headline interest rate
Interest rates matter, but they are only one part of a commercial property finance facility.
Other considerations can include:
- loan term
- amortisation period
- interest-only options
- fees
- security requirements
- financial covenants
- ongoing reporting requirements
- early repayment conditions
- flexibility to redraw or restructure
- whether the facility supports the business’s longer-term plans.
A slightly lower rate may not necessarily provide the best overall outcome if the facility is more restrictive or does not suit the business’s cash flow.
The aim should be to find a structure that supports both the property transaction and the wider needs of the business.
Consider the impact on working capital
A property purchase can be a significant investment, and it’s important not to assess it in isolation.
Using a large proportion of available cash or equity to fund a deposit may affect the amount of working capital left in the business.
Businesses should consider what they will still need after settlement for:
- day-to-day operating expenses
- wages and suppliers
- tax and superannuation obligations
- equipment purchases
- unexpected costs
- future growth opportunities.
In some cases, the property loan may form only one part of a broader funding strategy.
Looking at existing debt and banking facilities at the same time can help determine whether they remain appropriately structured after the purchase.
Engage early — particularly before signing a contract
One of the most valuable things a business can do is start the finance conversation before there is an urgent deadline.
Commercial property transactions can involve valuations, credit assessment, legal documentation and more complex security arrangements than a standard residential purchase.
Approaching finance after signing an unconditional contract can leave less time to address unexpected issues or explore alternative lenders.
Where possible, speaking with your accountant, solicitor and finance broker before committing to a purchase can help you understand the funding requirements, likely timeframes and any conditions that may need to be considered.
More lenders can mean more options — and more complexity
The commercial lending market extends beyond the major banks.
Businesses may have access to banks, non-bank lenders and specialist financiers, each with different credit appetites, structures and pricing.
The RBA has noted increased competition in business lending in recent years, including within SME and asset finance.
This can create more options for borrowers, but it can also make comparing facilities more complex.
A commercial finance broker can help assess the broader transaction, identify appropriate lenders and structure the application around the needs of the business rather than simply comparing headline rates.
Preparing for your next commercial property purchase
Whether you are buying premises for your own business, investing in commercial property or considering a development opportunity, preparation can make a significant difference to the finance process.
Understanding your funding requirement, having current financial information available and reviewing the wider impact on cash flow and existing facilities can put you in a stronger position when the right opportunity arises.
The earlier the conversation starts, the more time there is to consider the available options and structure finance around the longer-term needs of your business.
Considering a commercial property purchase or reviewing an existing property finance facility?
The Ledge Finance team can help assess your funding requirements, explore available lending options and structure commercial property finance to suit your business and investment objectives.
Speak with the Ledge Finance team →
Frequently Asked Questions
How much deposit do I need for a commercial property?
There is no single deposit requirement for all commercial property loans. The amount a lender is prepared to finance can depend on the type and location of the property, its intended use, the borrower’s financial position and the lender’s individual credit criteria.
Can I use equity in another property to help fund a commercial purchase?
Potentially. Depending on your circumstances and the lender, equity in another suitable property may form part of the overall security structure. Your finance broker can help assess what options may be available.
How is a commercial property loan different from a home loan?
Commercial property lending can involve different loan terms, deposit or equity requirements, pricing, security arrangements, financial covenants and assessment criteria. The lender will generally assess both the property and the financial strength of the borrower or business.
What documents will I need for commercial property finance?
Requirements vary, but lenders commonly request financial statements, management accounts, details of existing liabilities, cash flow forecasts and information about the property and proposed transaction. Investment purchases may also require lease and rental information.
Can I finance a property that my business will operate from?
Yes. Owner-occupied commercial property finance can be used by businesses purchasing premises such as offices, warehouses, workshops or other commercial and industrial property, subject to lender criteria.
How long does commercial property finance take?
Timeframes depend on the complexity of the transaction, lender, valuation and documentation required. Starting the finance process early can provide more time to respond to lender requests and resolve issues before settlement.
Why use a commercial finance broker?
A commercial finance broker can help assess the transaction, compare options across different lenders and structure finance around the broader needs of the business. This can be particularly valuable where the transaction involves multiple facilities, unusual security or more complex borrowing
