Business Property
How Do Business Property Loans Work?
5 min read- Finance Guide
- Updated 2026
Quick answer
Secured commercial lending
250K Minimum
Some lenders start from $250,000 for commercial property
- Typical loan terms Up to 15–30 years
- Rate types Fixed, variable or tailored
- Repayment types P&I or interest only
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Detailed explanation
Business property finance is designed for owner occupied commercial premises or, in some cases, investment style business property held within a business structure. The key difference from an unsecured business loan is that the lender relies heavily on the value and marketability of the property as security, while also assessing whether the business can service the debt
What the loan is used for
Business property loans are commonly used for:
Buy own premises
Commercial premises for your own business to operate from
Warehouse, office or retail
Industrial sites, offices, retail shops or mixed use
Refinance existing loan
Refinancing an existing commercial property loan
Fitout or refurbishment
A fixed, variable or tailored commercial rate option
Consolidate property debt
Combine property related business debt into a single secured facility
Owner occupied
Loan amount based on purchase price or valuation
Westpac — Common uses
Westpac states that business lending can help cover fitouts, refurbishments or purchasing new commercial property, which reflects how these loans are often used in practice.
How the structure usually works
Loan structure components
A deposit or equity contribution from the borrower- A first mortgage over the business property
-
Principal and interest or interest only repayments
- Fixed, variable or tailored commercial rate option
- Loan review points or refinance windows in some facilities
Lender term examples
NAB commercial loans
Flexible repayments, redraw, terms from 30 days up to 15 years
ANZ secured business loans
Eligible loans under $5M can run up to 30 years with suitable security
Minimum loan size
NAB commercial products start from $250,000
What lenders look at
Lenders usually assess:
Business revenue and profitability
Director or guarantor strength where applied
Existing debts and ongoing commitments
Deposit size or available equity
Property type and location
Lease position if the property is tenanted
How readily property could be sold if required
The overall risk of the business and industry
ATO — deductible ownership costs
Where the property is used in running a business, the ATO notes that interest on the loan and other ownership costs may generally be deductible — one reason many operators choose to buy their premises rather than lease them.
Deposit, LVR and loan size
There is no single universal deposit rule for business property loans — commercial lending policy varies significantly between lenders and property types. MoneySmart defines LVR as the loan amount divided by the value of the asset.
This means:
-
A larger deposit generally improves approval strength
- Stronger equity can reduce pricing pressure
-
More specialised properties may require lower LVRs
- Vacant or unusual premises may be treated more conservatively
- some lenders have clear product minimums, such as $250,000 for certain commercial lending products at NAB
LVR affects approval — no single rule
Standard commercial
up to 70–80%
Good property, strong business
Specialist / vacant
Lower LVR
Less marketable — more conservative
Commercial lending is more case by case than residential — lender policy varies significantly by property type and business profile
Need Help with your Project?
Common problems
Business property loans are often declined or delayed not because the business is weak, but because the structure, security or documentation does not fit lender policy. Commercial property lending is more case by case than standard consumer home lending.
Deposit or equity is too low
If the deposit is too small, the LVR may sit above what the lender wants for that property type or business profile.
Possible solutions include:
Contribute more
cash- Use equity from
another property
- Reduce the
purchase price
- Choose a lender
with more flexible commercial security policy
Business servicing is not strong enough
A profitable looking business can still fail servicing if cash flow is inconsistent, liabilities are high or financials are not well prepared.
Possible solutions include:
- Provide cleaner
financial statements
- Reduce other
debts before applying
- Extend the term
where the lender allows
- Restructure the
facility into a more manageable repayment profile
Property type or condition is an issue
Some premises are harder to finance because of location, specialist use, small market appeal or valuation concerns.
Possible solutions include:
- Obtain an early
commercial valuation
- Select a lender
suited to that property type
- Provide extra
security
- Increase the
deposit to offset lender risk
Steps to get Finance
Step
01
Confirm the property type, purchase price and intended business use
Step
02
Review business financials, tax returns and existing debts
Step
03
Work out the available deposit or equity contribution
Step
04
Submit the application with business and property documents
Step
05
Complete valuation, credit approval and loan documents
Step
06
Settle the purchase and begin repayments under the approved structure
Speak With A Business Property Loan Specialist
Business property loans vary more than most borrowers expect.
Loan term, LVR, security type, business income, director strength, property quality and whether the premises will be owner occupied all affect which lenders are realistic. A proper review can clarify borrowing capacity, likely deposit requirements and the lenders most suited to the scenario before contracts are signed.
Speak with a business property loan specialist about your scenario.
Submit the form for a tailored business property loan review.
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