Commercial Finance
How much can a Business Borrow for Commercial Property?
5 min read- Finance Guide
- Updated 2026
Quick answer
Typical lender funding
60% 80%
Of the property's purchase price
- Business deposit required 20% - 40%
- Owner occupied (best case) Up to 80%
- Commercial Investment 65% - 75%
- Specialised properties 60% - 70%
1300 000 000
1300 000 000
Commercial property loans are assessed using two main factors
The loan to value ratio (LVR)
The LVR determines the maximum loan as a percentage of the property's value. Most lenders set a ceiling on this ratio based on property type and risk.
PROPERTY-BASED LIMIT
The business's ability to repay the loan
Lenders assess the business's financial strength — including income, cash flow, trading history, and existing debts — to confirm it can service the loan.
Business-based limitLoan to value ratio — by property type
Most commercial lenders limit loans to a percentage of the property's value
-
Owner occupied commercial — Offices, retail, industrial Up to 80%
-
Commercial investment — Retail / office investment 65% - 75%
-
Specialised properties — Hotels, service stations, medical 60% - 70%
For example, if a business purchases a commercial property worth $1,000,000 and the lender allows a 70% LVR, the maximum loan would be approximately $700,000 — with the business contributing $300,000 as a deposit.
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Business Financial Strength
Lenders also assess the business that will be borrowing the funds. They typically review:
Business financial statements- Profit and loss history
- Cash flow and income stability
- Tax returns
- Existing debts
A business with stable income and strong financial records may be able to borrow more.
Rental Income and Lease Strength
If the property will be leased, lenders also consider the rental income Important factors include:
Lease length- Tenant strength
- rental income compared to loan repayments
Properties with strong tenants and long leases are generally easier to finance
Loan Size
Commercial property loans can vary widely in size.
Typical loan ranges include:
Smaller Loans
From ~$200,000
Smaller Commercial loans
Standard Loans
$500K - Several million
Standard business property loans
Large Developments
Significantly higher
Large commercial developments
Each lender has different minimum and maximum loan sizes
Common problems borrowers face
Many Borrowers often struggle to obtain commercial property finance because they do not have enough deposit
Insufficent Deposit
If the business does not have enough deposit or equity, lenders may reduce the loan amount
Possible solutions include:
-
Use equity from
other property
-
Contributing additional security
-
Bringing in a partner or investor
Limited Trading History
New businesses may struggle to demonstrate stable income
Some lenders prefer businesses with at least two years of trading history
Alternative lenders may still consider newer businesses depending on the overall strength of the deal
Low Rental Coverage
If the rental income from the property does not sufficiently cover loan repayments, lenders may reduce the loan amount
Improving the lease structure or tenant profile may help
Applying With The Wrong Lender
Different lenders have very different policies for commercial property loans
Using lenders experienced in business property finance can improve approval chances.
Steps to get Commercial Property Finance
Step
01
Determine the value of the commercial property you want to purchase.
Step
02
Calculate how much deposit or equity your business can contribute
Step
03
Prepare business financial documents and tax returns
Step
04
Confirm expected rental income or business use of the property
Step
05
Submit the application to commercial lenders
Step
06
Once approved, the loan settles and the property purchase proceeds
Speak with a Development Finance Specialist
Property development finance can vary significantly depending on the project size, location, approvals, and the developer's experience.
A specialist can review your project and help determine which lenders may be able to fund it.
Speak with a finance specialist about your development project.
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