Commercial Property Loans: Broker Requirements

A commercial property loan funds the purchase or refinance of business premises or an investment property, with the property securing the debt. For brokers, approval depends on the property’s use, the borrowing structure and the income available for repayments. A high property value alone doesn’t establish that the borrower can service the loan.

Start with who occupies the property and where repayment income comes from. An investor’s leased warehouse and a doctor’s own practice can need different evidence, even when both properties have the same price.

Classify the Property and Use

Classify the property by its actual use and permitted use before treating it as standard commercial security. Record the address, location, zoning, building type and occupancy. Establish whether the client’s business will operate there or an unrelated tenant will pay rent.

A shop, office or warehouse needs evidence of its condition and marketability. A short lease or a location with few replacement tenants changes the risk of relying on rent. Identify vacant space and lease expiry dates before estimating the income that will support the debt.

Purpose-built premises, churches and other buildings with limited alternative uses need a specialist security assessment. A boarding house also needs its own assessment of the operating model. Use the boarding-house finance guide for that specialised pathway.

A building with both a residence and commercial space needs a mixed-use property assessment. Keep the use split and zoning evidence in the file so the lender can classify the security correctly.

Commercial land also needs a defined purpose. Buying industrial land for later construction introduces timing and development questions that differ from buying a leased warehouse. Record the intended use, approvals and repayment source during the period before occupation or rent begins.

For a client investing in commercial property, assess how the lease affects funding. Compare income after outgoings, vacancy exposure and the property’s suitability as security. Property selection and investment-return advice need their own professional assessment.

Map the Borrower and Security

Map every entity that owns the property, earns the income or supports repayment. A company operating from a building isn’t necessarily the company borrowing to buy it. A trustee can hold the title for a trust while a separate trading company pays the rent.

Prepare a simple entity schedule with these details.

Party	Evidence to Record	Question for the Loan File
Borrower	Legal name, registration records and trust deed where applicable	Which entity owes the debt?
Property owner	Contract, title and proposed ownership	Who grants the property mortgage?
Trading business	Ownership, accounts and existing commitments	How much income supports repayments?
Tenant	Executed lease and relationship to the owner	Is the rental income external or internal to the group?
Guarantor or extra security provider	Identity, ownership and proposed guarantee or mortgage	What liability or asset does this party contribute?

Show related-party leases explicitly. Rent paid by the trading company to the property-owning trust is one movement of money within the group. Counting that rent and the same business cash flow twice inflates repayment support.

Ask the lender to assess the proposed structure before the client relies on it. The accountant advises on tax and ownership consequences.

The solicitor checks the entity’s powers, mortgage documents and guarantees. A structure’s tax advantages don’t establish that a lender accepts it.

Assess Income and Servicing

Assess servicing by tracing the cash available after expenses and existing debt repayments to the proposed loan repayments. Review business cash flow and lease income separately, then reconcile any support shared between entities.

For an investor, read the executed lease, rent ledger and tenancy schedule. Identify incentives, unpaid rent, outgoings the owner pays and vacant areas. Tenant strength and the remaining lease term affect how dependable that income is.

For an owner-occupier, reconcile lodged financial accounts and tax records with current trading and bank statements. Explain unusual income or expenses and include existing business debts. Removing rent from future expenses also means adding the costs of owning the premises.

The documentation route must match current lender criteria.

Full financial assessment uses the accounts and tax evidence required for that borrower. Alternative-document assessment changes the accepted income evidence, with its own eligibility conditions. The low-doc commercial property guide covers that separate route.

Lease-supported assessment is conditional. As at October 2026, CommBank’s Lease Doc route requires a tenanted investment property and a standalone, non-trading company or trust. Its lease must be between independent parties.

An owner-occupied practice with a related-party lease doesn’t meet that lease condition. The lease-doc loan guide covers the detailed assessment.

Worked Repayment Schedule

This hypothetical schedule uses a $700,000 loan, a 20-year repayment term and monthly principal-and-interest repayments at an assumed 8% annual interest rate. All amounts are Australian dollars.

It assumes monthly interest at 8% divided by 12, a constant rate and no fees or additional repayments.

Point in the Schedule	Approximate Amount	Meaning
Monthly repayment	$5,855	Pays interest and reduces the balance
First month’s interest	$4,667	$700,000 multiplied by 8% divided by 12
First month’s principal	$1,188	Repayment less that month’s interest
Balance after 12 payments	$685,204	Principal remaining after one year
Total interest over 20 years	$705,219	Total scheduled payments less the original principal

These figures illustrate repayments on a commercial property loan. They aren’t a current lender quote or a servicing result. Lenders can calculate interest daily and assess repayment capacity using different inputs.

An interest-only payment under the same simplified assumptions is about $4,667 a month, with the $700,000 principal still outstanding. A bullet loan leaves principal for repayment at maturity. Record the funded exit and distinguish the facility’s expiry date from the period used to calculate repayments.

Test Valuation and Leverage

Test the proposed borrowing against the lender’s accepted valuation and security policy, then test servicing separately. The loan-to-value ratio (LVR) is the proposed loan divided by the recognised property value, expressed as a percentage.

Property use and marketability affect the valuation. A building with expensive specialist fitout can have fewer alternative occupiers than a basic warehouse. Lease expiry, vacancy and rent compared with market rent can also change the valuation assumptions.

As at October 2026, ING describes its commercial valuation as an assessment of market value and suitability for mortgage security. Supply the valuer with the leases and property evidence. Read whether the report assumes existing tenancy, vacant possession or another basis before using the value in the funding calculation.

As at October 2026, Macquarie’s commercial property parameters range up to 70% LVR, depending on asset type and amortisation. Amortisation is the schedule for repaying principal.

Macquarie states that individual credit assessment and additional parameters apply. That published maximum doesn’t establish the limit for every property or lender.

In a hypothetical case, a warehouse costs $1 million but the lender recognises a $950,000 valuation. If the lender agrees to 70% LVR, the security calculation allows $665,000. The client needs $335,000 towards the price, plus purchase costs.

A proposed $700,000 loan would be about 73.7% of the accepted value.

The contract deposit paid before settlement is only part of the client’s total contribution. Include duties, legal costs, valuation costs and any applicable tax in the cash requirement.

Have the accountant and solicitor establish the transaction’s tax treatment.

Requests for 75% or 80% LVR need the specific lender’s criteria for that security and borrower. A lower deposit requires more debt, which still needs servicing. Extra equity doesn’t cure inadequate repayment income, and adequate income doesn’t override a security limit.

Assemble the Commercial File

Assemble the file around the selected borrower, property and documentation route. The lender needs evidence behind each income figure and each security assumption.

File Component	Documents to Prepare	What to Resolve
Purchase or refinance	Contract of sale or current loan statements and payout information	Funding amount, settlement date and debts being discharged
Entities and guarantees	Registration records, ownership schedule, trust deed where relevant and identification	Borrower, title holder, trading entities and repayment support
Business income	Financial accounts, tax returns and current trading reports required for the route	Sustainable income and unusual items
Tax and commitments	Australian Taxation Office (ATO) account statements, debt schedules and bank statements	Tax liabilities, payment arrangements and existing repayments
Rental income	Executed leases, variations, tenancy schedule and rent ledger	Rent received, lease expiry, incentives and vacant space
Property	Title, zoning, permitted-use evidence, plans and approvals	Security classification and lawful use
Valuation	Lender-instructed report and documents the valuer requests	Accepted value, assumptions and qualifications
Ownership costs	Outgoings, insurance and maintenance information	Cash flow after property expenses

As at October 2026, ING’s valuation information lists potential requests for building plans, development approvals, environmental assessments and lease documents. It also requires reasonable property access. Arrange those dependencies before the valuation appointment.

Record unresolved questions with the person responsible and the evidence needed. The solicitor handles title and lease issues.

The relevant planning authority or planning professional establishes permitted use. Environmental concerns need the appropriate specialist, and valuation qualifications go back to the valuer and lender.

Keep any material issue visible in the submission. For example, an unresolved use approval can affect both the security decision and the client’s ability to occupy the building.

Compare Commercial Uses and Funding Routes

Compare commercial property funding on the same purpose, borrower and security assumptions. The best commercial property loan is the one that meets the client’s documented needs with acceptable cost and repayment risk. There is no universal lender winner.

Scenario	Main Repayment Source	Evidence That Changes the Assessment
Leased investment warehouse	Rental income and any accepted additional support	Tenant, lease expiry, outgoings and vacancy
Owner-occupied medical practice	Trading income of the practice	Business accounts, occupation, ownership and property adaptability
Industrial land purchase	Income outside the unoccupied land until use begins	Zoning, approvals, construction timing and exit
Commercial mortgage refinance or equity release	Current income supporting the revised debt	Loan conduct, payout, cash-out purpose and updated security value

Deposit, Term and Extra Security

A larger contribution reduces the loan and its repayments. Offering a home as extra security can change the security coverage, but exposes that home to the business borrowing. Document existing home debt and how the residential security would be released later.

A proposal described as no-deposit lending can still depend on equity in another property and cash for costs.

As at October 2026, ANZ’s Business Loan can use acceptable residential or commercial property as security. Its conditional 30-year term requires total ANZ credit facilities, including related entities and the proposed loan, to be below $5 million. Purpose, security coverage and security location must also meet ANZ’s requirements.

Consider the same hypothetical warehouse purchaser seeking $700,000 over 30 years, with $900,000 of existing ANZ facilities in related entities. Combined ANZ facilities would be $1.6 million.

That satisfies the published group-size condition alone. ANZ still assesses the purpose, repayment support and offered security before agreeing to that term.

Adding residential property to that proposal changes the security package. It doesn’t convert the business-purpose debt into a residential home loan or establish approval. Compare the longer repayment period with total interest and any review or maturity conditions in the actual offer.

As at October 2026, Macquarie’s commercial property page permits a conditional additional 10% LVR for qualifying medical professionals or healthcare businesses buying commercial owner-occupied property. The professional needs an Australian Medical College fellowship, or the business must meet Macquarie’s Health Goodwill Guidelines. The same client buying a warehouse to lease to another business doesn’t meet the owner-occupied condition of that variation.

Compare the Whole Facility

Compare written proposals using the interest basis, lender fees, valuation and legal costs, repayment schedule, review obligations and maturity date. For a fixed rate, include the cost consequences of early repayment. For refinancing, compare the payout and new transaction costs against the benefit over the client’s intended holding period.

Equity release increases debt against an existing property. Record the cash-out purpose and repayment source alongside the valuation. An assumed rise in property value doesn’t establish that more borrowing is available.

Commercial lending is wider than property lending. A business mortgage is a property-secured business facility. A business term loan funds an agreed purpose, an overdraft supports fluctuating cash needs and equipment finance funds business assets.

Yes, a business loan can fund a property purchase when its permitted purpose and security conditions allow it. Match the facility to the premises purchase rather than assuming every business loan permits real estate acquisition. For non-property funding, use the unsecured business loan guide or the equipment finance guide for the relevant task.

What a Commercial Mortgage Broker Assesses

The commercial mortgage broker connects property use and borrowing structure to the lender channels that can assess the proposed loan. The broker then compares servicing, accepted security and facility terms using the same client information.

For a broker whose work is mainly residential, establish access to a commercial channel before promising a lender option. Identify any specialist broker, aggregator channel or lender contact required for the property type. A familiar bank name doesn’t establish that the broker can lodge every commercial facility with that bank.

Prepare a submission summary stating the purpose, entities, security, income calculation, contribution and requested term. Attach the supporting documents and list the unresolved questions with their proposed resolution. Keep the client’s deadline beside outstanding valuation or legal conditions.

Bulma’s Policy Advisor helps brokers research lender policy and retain the quoted wording in file notes. Its commercial coverage extends only to commercial lending addressed by its covered residential lenders’ policies. Use the relevant commercial channel for the facility’s credit decision and written terms.

The broker assists with the credit proposal and submission. The client’s property decision, lease advice and tax structuring remain with the client and relevant advisers. Before settlement, reconcile the lender’s approval conditions with the actual contract, security documents and available contribution.

Annual Reviews and Covenant Changes

Read the facility documents to establish its review dates, reporting requirements and covenants. A covenant is a contractual requirement, such as reporting a financial measure or maintaining a specified position. Its effect depends on the actual agreement and borrower category.

NAB’s Business Lending General Terms effective 10 November 2025 allow periodic reviews, at least annually. Clause 4.3 requires reasonably requested information and permits a security valuation. Read those terms with the Business Letter of Offer, which can change how the general terms apply.

NAB’s financial-covenant definition distinguishes reporting for a Small Business or Small Business Contract from compliance for other borrowers and Specialised Facilities. A financial ratio changing doesn’t establish the same default consequence for every commercial borrower. Read the applicable clause and specific offer conditions before describing a breach or enforcement right.

The following is a hypothetical broker review register, not a requirement imposed by every lender.

Event	Evidence to Prepare	Action to Record
Scheduled lender review	Current accounts, tax position, loan conduct and requested insurance evidence	Submit by the date in the lender’s request
Lease expiry or tenant departure	Updated lease, rent ledger, vacancy costs and reletting proposal	Recalculate income and discuss the effect with the lender
Covenant measure outside its agreed level	Calculation under the agreement’s definition and cause of the change	Present a remedial proposal and seek a written response
Facility approaching maturity	Outstanding balance, repayment or refinance plan and supporting evidence	Agree the funded exit before the due date
Material valuation change	Accepted updated valuation and revised security calculation	Assess the shortfall and proposed response

Identify a suspected breach or maturity problem promptly. Document its cause and the proposed remedy, then obtain the lender’s written response.

Record any agreed waiver or extension and its conditions. Until that agreement exists, keep the existing repayment and maturity obligations in the client’s funding plan.