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Buy A Commercial Property

Commercial Property Loans

At Sanford Finance, we specialise in helping businesses and investors secure the right commercial property loans tailored to their unique needs. 

Whether you’re looking to purchase an office, retail space, warehouse, or industrial property, we provide a range of loan options that suit various circumstances, including owner-occupied, and investment properties, and properties owned by or purchased in your Self-Managed Super Fund.

Types of Commercial Property

Commercial properties can range widely depending on your business needs or investment goals. Lenders will often categorise commercial properties as:

  • Offices – Small or large office spaces for business use.
  • Retail Spaces – Shops, cafes, or restaurants where goods or services are sold.
  • Industrial Properties – Warehouses, factories, or storage facilities.
  • Mixed-Use Properties – Properties used for both commercial and residential purposes.
  • Medical or Professional Suites – Specialised spaces for medical practitioners, lawyers, accountants, and more.

Loan Types

  • Owner-Occupied Commercial Property Loans: This is ideal if you are purchasing a property to operate your own business from. The primary focus for lenders is your business’s income and ability to meet repayment obligations.
  • Investment Commercial Property Loans: Suitable for those purchasing a commercial property with the intention of leasing it out to generate rental income. The rental yield from the property plays a significant role in your loan application process.
  • Self-Managed Super Fund (SMSF) Commercial Property Loans: SMSFs are increasingly being used to invest in commercial property. If structured correctly, the rent received from leasing out the property can be funnelled back into the SMSF, growing the retirement fund. However, specific lending rules apply for SMSF loans, including strict requirements for Limited Recourse Borrowing Arrangements (LRBAs).

Deposit Requirements

Commercial property loans typically require a higher deposit than residential loans. Deposit requirements can vary, but generally:

  • Owner-Occupied: You may be required to provide at least 20-30% deposit.
  • Investment Property: For investment purposes, the deposit can be higher, often around 30-40%.
  • SMSF Loans: Lenders may require up to 30% of the property’s value as a deposit.

Additionally, Loan to Value Ratios (LVR) are typically lower for commercial property, ranging from 60% to 80%, depending on the property type, borrower profile, and lender.

GST and Going Concern

When purchasing a commercial property, it’s essential to understand the GST implications, especially if you’re buying as an investment.

  • GST Payable: If the property is not considered a “going concern” and is being purchased by a business registered for GST, the buyer will need to account for GST, usually 10% of the purchase price.
  • Going Concern: If the commercial property is being purchased as part of an ongoing business (e.g., a shop with a lease already in place), it may be classified as a “going concern.” In such cases, the transaction may be GST-free if certain conditions are met, such as the tenant continuing to lease the property. It’s crucial to seek professional tax advice when navigating GST on commercial property.

Income Verification for Commercial Loans

When applying for a commercial property loan, lenders will typically require proof of your income. The types of income verification available depend on your financial situation and the level of documentation you can provide.

  • Full Documentation (Full Doc): Requires comprehensive documentation including financial statements, business tax returns, and bank statements to prove your income and the business’s viability.
  • Lease Documentation (Lease Doc): This option focuses on the lease income generated by the commercial property itself, rather than your personal or business income. It’s particularly suitable for investment properties, where the rental income from tenants is sufficient to cover loan repayments.
  • Low Documentation (Low Doc): If you’re unable to provide extensive financial statements (often the case for self-employed individuals), a low doc loan allows you to use alternative forms of income verification such as BAS statements, bank statements, or an accountant’s letter to verify your income.
  • No Documentation (No Doc): In rare circumstances, a no doc loan may be available, usually only for highly secure properties where the loan amount is significantly lower than the property value (low LVR). With a no doc loan, no formal income verification is required, but the lender will require a significant deposit and may charge higher interest rates.

Why Choose Sanford Finance for Your Commercial Property Loan?

At Sanford Finance, we offer a wide variety of commercial property loans suited to your specific needs. Whether you’re a business owner looking for the perfect office space, an investor seeking high returns, or an SMSF trustee wanting to invest in commercial property, our team of expert mortgage brokers will guide you through the lending process, from application to settlement.

We work with a network of lenders that offer competitive rates and flexible loan structures. Let us help you unlock the potential of your commercial property investment or business space.

Contact Sanford Finance today to discuss your commercial property loan options and discover the best solution for your needs!

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