Lease Doc Loans: Requirements and Evidence

A lease doc loan is a commercial property loan assessed through the property’s lease income instead of a full-financial income assessment. The lender still checks the property, borrower and credit conduct. An executed lease alone doesn’t establish that the rent supports the proposed debt.

For a broker, the first task is to connect the lease to the property and borrowing entity. Then test the income the lender accepts against its servicing rule and assemble the evidence for that particular route.

What Lease Doc Means

Lease doc describes an income-assessment route within commercial lending. The rental income must support the debt under the selected lender’s rules, while the security and applicant still meet its credit requirements.

A full-financial application uses the financial records needed to assess the borrower’s income and commitments. A lease-supported application centres that income test on the commercial lease. Calling the application “no-doc” would imply that verification disappears, even though lenders require documents and credit assessment.

CommBank’s Lease Doc loan, as at October 2026, assesses property rental income. Its published loan-to-value ratio (LVR) limit is 65%, with a minimum interest coverage ratio (ICR) of 1.5 times. ICR compares the lease income accepted for assessment with loan interest.

Bank of Queensland (BOQ), as at October 2026, publishes a Lease Doc Business Loan with up to 70% LVR for standard commercial property. Its business group lending limit is $5 million. Those limits belong to BOQ’s product, so a file that fits one lender’s published ratio can still fail another lender’s assessment.

Test the Property and Lease

Test whether the property is acceptable security and whether its lease supplies dependable income for the proposed term. Record the property type, address and permitted use, then compare the actual occupation with the lease and valuation.

Read the full signed lease, amendments and any side agreements. Record the commencement and expiry dates, rent reviews, options, incentives and responsibility for outgoings. A rent-free period or landlord-paid expense can reduce the cash available even when the headline rent looks sufficient.

For single-tenant properties, BOQ’s published rule, as at October 2026, excludes options when measuring the remaining lease term. The loan term is limited by that remaining term or its maximum interest-only term, whichever is shorter. Interest-only periods can run for up to five years, within the loan term.

CommBank, as at October 2026, limits the term to five years or lease expiry, whichever is shorter. It requires an active arm’s-length lease between independent parties. Related-party rent therefore needs a different assessment discussion, rather than being presented as qualifying under this route.

Put unusual termination rights, tenant break clauses and specialised premises into a written lender enquiry before relying on their rental income. Include lease expiry and any uncertain permitted use. For each issue, ask whether the lender accepts the security and what condition must be met.

A hypothetical income check shows why the lease must be read in full. Assume a lender accepts $96,000 annual net rent and assesses annual interest at $64,000. The income-to-interest ratio is 1.5 times: $96,000 divided by $64,000.

If an incentive reduces accepted annual rent to $72,000, the same calculation gives 1.125 times. These are illustrative inputs, not a lender quote or its prescribed calculation. Use the chosen lender’s treatment of outgoings and incentives before concluding that its servicing test passes.

Also record what happens if the tenant leaves. Identify reletting costs, likely downtime and the borrower’s evidenced cash reserves. A long loan term doesn’t extend the tenant’s commitment to pay rent.

Assess the Tenant and Borrower

Assess who pays the rent and who remains responsible for the debt if those payments stop. Match the tenant’s legal name to the executed lease and record its trading history, occupancy and rent-payment conduct.

Compare rent receipts with the tenancy schedule and explain arrears, partial payments or payments made by another entity. In a multi-tenant property, show each tenant’s share of total rent. Concentration measures how much income disappears when the largest tenant leaves.

Map the tenant, property owner, borrower and proposed guarantors separately. Shared ownership or control can change the assessment route even where the lease is signed and payments are current. Keep supporting company and trust records with that relationship map.

CommBank’s borrower requirements, as at October 2026, specify a standalone non-trading company or trust that holds the property. Its security requirements include a first-ranking property mortgage, general security over the borrower and a director guarantee. A trading business owning its premises doesn’t automatically fit that published structure.

Record existing liabilities, guarantees given for other debts and credit conduct. Explain tax arrears or refinance repayment problems with current records. Reduced income paperwork doesn’t remove the need to disclose commitments or answer the lender’s remaining borrower questions.

Prepare the Lease Doc File

Prepare a file that lets the assessor trace each income assumption and eligibility condition to a document. Separate the lender’s published requirements from supporting records collected to explain this transaction.

BOQ’s document list, as at October 2026, requires a signed lease, signed Business Lending Application Form and full valuation. It also requires an Australian Taxation Office (ATO) tax portal report showing tax liabilities are up to date, except for new entities. Refinancing from another bank requires at least 12 months of loan statements, and equity cash out requires written confirmation of purpose.

CommBank’s list, as at October 2026, includes the active lease, an available tenancy schedule and ATO income tax and goods and services tax (GST) account statements. It requires the purchase contract or, for refinancing, 12 months of loan and transaction statements.

Use the following evidence map to organise the supporting file. The lender’s application and case conditions determine which additional records must be supplied.

Evidence	What It Supports	Inconsistency to Resolve
Executed lease and amendments	Current tenant, rent and enforceable term	An unsigned renewal or side agreement changes the terms being assessed
Rent ledger and matching receipts	Actual payment conduct and income timing	Receipts differ from contracted rent or show arrears
Property title and entity records	Ownership, borrowing structure and tenant relationships	The landlord’s legal name differs across documents
Valuation and property information	Security value, use and tenancy assumptions	The valuation assumes occupation that has ended
Existing debt and transaction statements	Refinance balance, commitments and account conduct	The payout balance or repayments differ from the application
Tax records and completed application	Tax position, disclosed liabilities and declarations	A declaration conflicts with current account records
Written cash-out purpose and transaction evidence	Proposed use of released funds	The stated purpose differs from the actual payment destination

Date the lease summary and identify the period covered by rent receipts and statements. Reconcile changes since the valuation, including a tenant departure or rent concession. Supply declarations in the lender’s required form and resolve conflicting information before the applicant signs.

Plan the Fallback Route

Choose the fallback from the condition that fails, rather than treating a failed lease-doc test as a verdict on the whole transaction. A short lease, related-party tenant or unsuitable borrowing structure can require a different assessment route even when the property has value.

If accepted rent doesn’t support the requested debt, calculate the effect of a smaller loan funded by more equity. Recalculate both the income test and LVR. More equity doesn’t correct an unacceptable tenant relationship or property type.

A full-financial route can assess the borrower’s wider income and commitments where the lease-supported route doesn’t fit. Gather the financial statements and tax returns needed for that assessment, with current debt records. Another lender or different security can be considered on its own documented requirements.

Before proceeding, put the failed condition and proposed remedy in writing for the lender. Obtain the specific evidence requirements for the alternative route. Use the commercial property loan assessment guide for the wider security and borrower assessment, then rebuild the submission around the route the file actually supports.