Top 10 FAQs – Commercial Property Finance

1. How much deposit do you need for commercial property?

Most lenders require 30–40% equity, depending on asset quality, lease strength and location.

2. What LVR do banks offer on commercial property?

Typically 60–70%, with higher leverage possible for strong industrial assets with long leases.

3. What is DSCR in commercial lending?

Debt Service Coverage Ratio measures whether rental income sufficiently covers loan repayments. Most lenders require at least 1.25x.

4. Is commercial property harder to finance than residential?

Yes. Commercial lending is assessed on income stability, lease terms and asset quality rather than personal salary alone.

5. Can you buy commercial property in an SMSF?

Yes, generally up to 60–70% LVR with stricter documentation and arm’s-length lease requirements.

6. Are interest rates higher on commercial loans?

Yes, commercial rates are typically higher than residential and are risk-based.

7. Do banks require personal guarantees?

In most low-to-mid market transactions, yes.

8. What property type is easiest to finance?

Small industrial assets with strong tenants and longer leases are currently viewed most favourably.

9. How long does commercial loan approval take?

Bank lenders can take 6-12weeks, non-bank lenders can take less than a week, depending on complexity.

10. What affects valuation most?

Net rental income and market yield assumptions.