Commercial Property Finance
Commercial property covers four main groupings - office, retail, industrial and specialised securities.
Office, Retail and Industrial Property.
Term loans for existing properties in these categories are relatively straight forward. Maximum loan to valuation ratio is lower than for residential property as level of risk is higher and there are lower levels of demand for commercial properties. Loans are available on a full doc, lease doc and low doc basis.
Funding for office, retail, industrial and specialised commercial property.
Commercial property finance supports the acquisition or refinancing of office, retail, industrial and specialised assets . These transactions are more complex than residential lending and require careful structuring, clear lender communication, and realistic timeframes.
AFN works with major banks, second‑tier lenders, and specialist commercial property financiers to secure the right facility for your needs.
Commercial Property Categories
Commercial property generally falls into four main groupings :
- Office
- Retail
- Industrial
- Specialised securities (e.g., hotels, service stations)
Office, Retail & Industrial Property
Term loans for existing properties in these categories are relatively straightforward . However, commercial lending has different risk settings to residential property, and loan‑to‑valuation ratios (LVRs) are lower as demand for commercial assets is more variable .
Loans are available on a full‑doc, lease‑doc, and low‑doc basis .
Major Banks
Major banks typically advance up to 70% LVR over a maximum loan term of 25 years, with a preferred term of 15 years .
In some cases, banks may advance up to 80% for a limited period , but require the excess to be repaid over a shorter term — usually 3–5 years .
Banks will generally advance additional funds to cover GST on purchases if applicable , but these funds are short‑term and must be repaid from the GST refund .
Second‑Tier Banks & Non‑Bank Lenders
Second‑tier banks such as ING and Bendigo offer “set‑and‑forget” term facilities and lines of credit with up to 75% LVR, particularly attractive for loans up to $5 million .
Specialist commercial property lenders can offer more generous terms for transactions up to $5 million, including:
- Loan terms up to 30 years
- Maximum 80% LVR
- No annual reviews
- No reporting requirements up to $3 million
These lenders are often more flexible and commercially pragmatic than traditional banks .
Specialised Securities
Specialised securities are premises designed for a specific usage — such as hotels or service stations — with limited alternative uses . Value is influenced by the profitability of the operation , and lenders generally advance only 50–60% LVR against the freehold .
SMSF Loans
Most commercial lenders offer loans for Self‑Managed Super Funds (SMSFs) to finance the acquisition of commercial or residential property . Each application has unique circumstances, and recommendations are made on a case‑by‑case basis .
Applying for Commercial Property Finance
Commercial property transactions are more complex than residential loans, and each is assessed on its individual merits .
Typical timeframes:
- Approval in principle: allow up to 1 week
- Valuation: frequently more than 1 week for inspection and reporting
- Documentation & settlement: up to 4 weeks for refinance transactions
Costs associated with commercial property finance are considerably higher than residential lending .
AFN will provide an estimate of costs and approximate timeframes before submitting an application on your behalf .
Start a Conversation
Commercial property finance requires careful structuring and clear lender communication. AFN ensures your transaction is managed professionally from start to settlement.