Commercial Property Loans Gold Coast

Commercial Property Finance Overview

Commercial property lending covers the purchase of non-residential properties such as retail shops, offices, industrial warehouses, showrooms and mixed-use buildings. Compared with residential mortgages, commercial loans involve more complexity - including lower maximum LVRs, shorter loan terms, and greater scrutiny of the property's income-generating capacity.

Loan Hive assists both owner-occupiers purchasing their own business premises and investors adding commercial property to their portfolio. We work across the Gold Coast, Tweed Heads corridor and broader South East Queensland market.

LVR Requirements for Commercial Property

Loan-to-value ratio (LVR) limits for commercial property are lower than those for residential property, reflecting the higher risk lenders associate with commercial assets. Typical LVR ranges are:

Standard commercial property (retail, office, industrial) - up to 70% LVR with most lenders
Owner-occupied premises - some lenders extend to 75% or 80% for businesses purchasing their own property
Specialised or single-tenant property (e.g. childcare centres, medical suites, service stations) - typically 60-65% LVR, with tighter lender appetite
Rural commercial or regional locations - LVR restrictions may be tighter depending on postcode and property type

A higher deposit reduces your LVR, improving both your approval prospects and the rate on offer. If you have significant equity in residential property, some lenders will allow cross-collateralisation to achieve a higher effective LVR on the commercial asset.

Lease Terms and Tenant Quality

For investment commercial property, lenders place significant weight on the quality and duration of the existing lease. A property with a long-term lease to a blue-chip tenant (such as a national retailer or government agency) is viewed far more favourably than a property with a short, informal tenancy arrangement.

Remaining lease term of 3+ years typically preferred by lenders
Weighted average lease expiry (WALE) across multiple tenants is assessed for multi-tenanted properties
Lease structure including rent review mechanisms, options to renew and outgoings arrangements are reviewed
Vacancy risk is factored into serviceability assessments - lenders often apply a vacancy allowance to the rent when calculating income

Interest Rates and Loan Structure

Commercial loan interest rates are typically higher than residential rates and are often structured as interest-only for the initial term, with a principal and interest component applying later. Loan terms are commonly shorter - between 5 and 15 years - with full review at expiry.

Many commercial loans are variable rate, though fixed-rate options exist for terms of 1 to 5 years. Line of credit commercial facilities are available to experienced investors with strong equity positions.

Frequently asked questions

Yes. SMSF borrowing to purchase commercial property is permitted under a limited recourse borrowing arrangement (LRBA), provided the property meets the ‘sole purpose test’ of providing retirement benefits to fund members. A business operated by a fund member can lease the commercial property from the SMSF at market rent, which is a popular strategy. Visit our SMSF Loans page for more detail.

Yes. Commercial lenders invariably require a full valuation prepared by a registered valuer on the lender's panel. The valuation will assess the current market value as well as the income-producing potential of the property. You are generally responsible for the cost of the valuation, which can range from $1,500 to $5,000 or more depending on the property's size and complexity.

Typical documentation includes two years of personal and business tax returns and financial statements, recent BAS statements, a copy of the property's current lease (if tenanted), a signed contract of sale, details of other assets and liabilities, and identification documents. Some lenders may also request a business plan or rental income forecast for the property.

Commercial loans generally have lower maximum LVRs, higher interest rates, shorter loan terms, more limited lender panels and greater documentation requirements than residential mortgages. Assessment takes into account the commercial property's income, location, tenant quality and lease structure - factors not relevant to residential lending. Processing times are also longer, typically 4 to 8 weeks to settlement.