Commercial Property Loans Melbourne

A commercial property loan can serve several goals: buying the premises your business already runs from, building a property investment portfolio, funding a development, or refinancing a facility that’s no longer competitive. Which of those applies changes how a lender reads the deal.

It can, and approval here tends to be more straightforward than an owner-occupied purchase.

A lender is really assessing the property’s earning power through its tenants, not your business’s own numbers, which is why investment deals often clear credit committees with less friction.

No. Melbourne’s commercial precincts get assessed on different criteria. An industrial property out west around Truganina or Derrimut is judged mainly on tenant demand and freight access; a CBD or Docklands office tower on asset grade and location; a warehouse in the south-east around Dandenong or Clayton, generally the tighter-held pocket of the industrial market, carries a slightly different risk profile again. A lender happy to fund an industrial asset in the west might baulk entirely at a secondary CBD tower, and vice versa.

Yes. Plenty of Melbourne business owners come to us for exactly this. Since the loan gets assessed against your business’s own trading history and not a tenant’s, lenders typically place owner-occupied purchases in their medium risk bracket, and that’s usually where the sharper pricing sits compared with an investment or working-capital loan.

You can, but this is where lenders get most cautious. Once the money’s supporting your cash flow instead of sitting in bricks and mortar, the security backing the loan feels thinner to a credit assessor, so expect tighter terms and a longer list of questions than you’d get on a straight purchase.

Yes. Buying through a company or trust changes how a lender reads the application, no matter what the property’s used for, and depending on the structure, it can add duty on top of the standard transfer duty. How that plays out depends heavily on the specific structure you use, so it’s worth bringing your accountant into that conversation early, well before the structure is locked in.

Yes, though this is a narrower lane with fewer lenders playing in it.
A half-built property earns nothing, so most lenders will capitalise your interest costs into the loan itself during construction. That means your balance creeps up before the project’s finished, but it also means you’re not scrambling to find repayments out of a business that isn’t yet generating rent or revenue from the asset.

Commercial borrowing limits depend on a combined assessment of your business trading history, operating cash flow, existing debt commitments, and the net yield of the target property. Two Melbourne businesses with identical gross revenue can receive vastly different loan caps depending on how their servicing capacity and tenant risk are presented to credit underwriters.

Most commercial lenders require a deposit between 20% and 30% (70% to 80% LVR). For investment purchases under $1 million, lenders typically cap loan-to-value ratios at 75%. However, many established Melbourne business owners avoid using cash deposits altogether by leveraging built-up equity in existing residential or commercial property holdings.

Commercial loan pricing is far less standardized than residential mortgages. Your final rate depends on lender appetite, your property asset class, loan structure, and overall credit risk. Variable and fixed rate options are available, but interest margins can vary significantly between lenders assessing the exact same property.

Standard commercial property loan terms typically cap at 15 years, though select lenders extend this to 25 years on a case-by-case basis. If commercial debt is secured against residential real estate, loan terms can extend up to 30 years. Interest-only periods are generally available for up to 5 years.

Commercial credit assessments take longer than residential applications due to the depth of financial analysis required. While submitting a complete, well-packaged application speeds up the process, most commercial approvals take between two to four weeks from submission through to formal approval.

A General Security Agreement grants a lender security over company assets beyond the specific commercial property being purchased. Whether a lender requires a GSA depends on your industry sector, loan size, and overall risk rating. Strong financial performance and lower LVRs can sometimes eliminate the need for a GSA.

Yes. Self-Managed Super Funds can buy commercial property, and business owners can rent the premises back to their trading business at fair market rates. Because strict Superannuation Industry (Supervision) Act rules apply alongside lender-specific Limited Recourse Borrowing Arrangement (LRBA) criteria, specialised setup advice from a suitable industry professional is essential.

Yes. Commercial refinancing is a common strategy to secure sharper interest margins, unlock equity for business expansion, or restructure restrictive loan covenants as your business grows.

Not quite, and the difference runs deeper than the rate.

Commercial property is assessed for duty the same basic way as residential: on the higher of the purchase price or market value, using a marginal sliding scale rather than one flat rate. But two of the things that matter most on a house essentially don’t touch commercial land. There’s no principal-place-of-residence concession, since that’s only ever available to buyers intending to live in the property, and Victoria’s 8% foreign purchaser surcharge is a residential-only measure, so an overseas buyer picking up an industrial warehouse doesn’t pay that extra layer at all.

On the current numbers: the standard sliding scale tops out at 6.5% on the portion of the price above $2 million, for property that hasn’t yet moved into Victoria’s newer system. Commercial and industrial property is also being progressively shifted off duty altogether: since 1 July 2024, once a qualifying property is sold, duty is paid one final time, and after a 10-year transition period, an annual property tax applies instead of duty on any future sale. If you’re buying something partway through that transition, have your accountant confirm exactly where it sits, since it changes how you think about holding costs well beyond the number on settlement day.