Commercial property finance in Sydney is a loan secured by a commercial building, used to buy premises for your business, buy an investment property, refinance an existing loan or release equity to expand. Lenders assess the property, the lease or business income and the borrower together, which makes it quite different from a home loan.
In practice that means a larger contribution, more documents and more time. Commercial lenders generally lend a lower share of the property’s value than home loan lenders, and they look closely at lease terms, tenant strength and your financial statements before they commit.
This guide covers who uses commercial property finance, how lenders assess it, what NSW buyers should budget for, and the steps from first enquiry to settlement in 2026. If you want a document-by-document list instead, use our commercial property finance checklist.
What is commercial property finance in Sydney?
Commercial property finance covers loans secured by non-residential property, such as offices, shops, warehouses, industrial units, medical suites and mixed-use buildings. The loan can be used to purchase, refinance or release equity, and the borrower is often a company, trust or SMSF rather than an individual.
The key difference from a home loan is how repayments are assessed. A home loan relies mainly on personal income. A commercial loan relies on the rent from the property, the cash flow of the business that occupies it, or both.
Who uses commercial property finance?
Common borrowers include:
- business owners buying the premises they trade from
- investors buying tenanted, income-producing property
- businesses refinancing a commercial loan whose terms no longer suit
- buyers of mixed-use property combining shops or offices with residential units
- owners releasing equity from existing commercial property for business needs
Each of these is assessed a little differently, so the starting point is always the purpose of the loan.
How much deposit do you need for commercial property in Sydney?
There is no single figure. Commercial lenders generally offer a lower maximum loan-to-value ratio (LVR) than home loan lenders, so you usually need a bigger contribution. The LVR you can get depends on the property type, lease length and tenant quality, your financial position and lender policy.
On top of the deposit, budget for duty, legal and valuation costs and a cash buffer. Our guide to commercial property loan deposits and LVR explains these drivers in more detail.
How do lenders assess a commercial property loan?
Lenders usually look at four things together:
| What lenders check | What they want to see | Why it matters |
|---|---|---|
| The property | Type, location, condition, zoning, valuation | It is the security if the loan isn’t repaid |
| The income | Lease, rent, tenant, vacancy history, or business trading | It supports the repayments |
| The borrower | Financial statements, tax returns, existing debts, credit history | Shows capacity and track record |
| The structure | Borrowing entity, guarantors, LVR, term, covenants | Sets risk, pricing and conditions |
Lender appetite varies widely. Some are comfortable with specialised assets or single-tenant buildings; others prefer mainstream property with long leases. Business.gov.au also suggests reviewing your business’s financial health and preparing a business plan before applying for business finance (business.gov.au, accessed October 2026).
What costs should NSW buyers budget for?
The purchase price is only part of the cash you need. Common costs include:
- Transfer duty: payable to Revenue NSW on most property purchases (Revenue NSW, accessed October 2026)
- GST: may apply to some commercial purchases depending on how the sale is structured; the ATO explains how GST works (ATO), and your accountant should confirm the position on your contract
- Valuation fees: usually arranged through the lender
- Legal costs: for the purchase and the loan documents
- Lender fees: establishment and ongoing facility or review fees
- Buffer: for vacancy, repairs and outgoings after settlement
How does the 2026 rate environment affect Sydney borrowers?
The Reserve Bank raised the cash rate target to 4.60%, effective 30 September 2026 (RBA). Commercial lenders price from their own funding costs plus a margin for each deal, so higher base rates can tighten interest cover on income-producing property and affect how much a lender will advance.
When you model a purchase, test repayments at a higher rate than today’s quote and check how the lease income covers the interest. Our commercial loan rates guide explains how commercial pricing is built.
Which loan structure suits your purpose?
| Purpose | Usually suits | Watch-outs |
|---|---|---|
| Owner-occupied premises | Established businesses buying where they trade | Repayments rely on business cash flow, so test a quieter trading year |
| Tenanted investment | Investors focused on rental income | Lease length, tenant strength and vacancy risk shape LVR and pricing |
| Mixed-use property | Buyers of shop-top or office-and-residential buildings | Fewer lenders and more varied policy |
| Refinance or equity release | Owners improving terms or funding business needs | Switching costs, new valuation and new covenants |
How long does commercial property finance take in NSW?
Timing depends on the lender, valuation turnaround, legal work and how ready your documents are. Commercial deals usually involve more parties than residential loans, including valuers, solicitors and sometimes accountants for each entity, so allow extra time before committing to finance or settlement dates on a contract. Confirm current turnaround with the lender rather than relying on a typical figure.
What are the steps to finance a commercial property in Sydney?
- Define the purpose: purchase, refinance or equity release, and owner-occupied or investment.
- Confirm the borrowing entity: individual, company, trust or SMSF, plus any guarantors.
- Gather documents: financials, tax returns, bank statements, lease and property details.
- Check lender fit: shortlist lenders that accept the property type, lease profile and LVR.
- Get indicative terms: compare rate, fees, term, covenants and review clauses.
- Valuation and credit assessment: the lender values the property and assesses the full application.
- Approval and loan documents: review conditions with your solicitor before signing.
- Settlement: the lender, your solicitor and the other side complete the transaction.
Approval at each stage is subject to lender assessment, and lending criteria, fees and charges apply.
What mistakes do Sydney commercial borrowers make?
- Signing a contract with a short finance clause before checking lender appetite
- Assuming the valuation will match the purchase price
- Comparing headline rates without looking at fees, covenants and reviews
- Leaving GST and duty questions until late in the process
- Applying with incomplete financials, which can slow or weaken the assessment
Should you use a commercial finance broker in Sydney?
A broker can be useful when your property, lease or entity structure narrows the lender field, or when you want offers compared on the same terms. NewGen helps Sydney and NSW borrowers compare commercial property lending, coordinate valuers and solicitors, and keep the timeline realistic. If you already have a facility, our commercial refinance guide covers when switching may be worth it.
When you have the property details and recent financials, you can start a commercial loan enquiry.