Buying a commercial property

Standard consumer lending products are generally not available when the loan is for the purchase of a commercial property or venture. That’s where commercial lending comes in.

What is commercial lending?

  • Buy commercial property

    Borrow funds to purchase an existing commercial property and use the property as security for the loan.

  • Refinance an existing commercial loan

    If an existing commercial loan isn’t catering to current needs.

  • Use equity for commercial investment purposes

    Many residential lending policies can be restrictive when it comes to using the equity in a residential property for commercial purposes. A commercial loan provides this opportunity.

  • Diversify a portfolio

    Purchasing commercial property can be a great way to diversify an investment portfolio. There are a range of investment properties to suit most budgets and net income returns generally outperform returns from residential properties.

Things to consider

While managing a commercial investment property is similar to managing a residential one, there are a few differences worth being aware of:

  • Longer leases

    Commercial leases are generally for a period of three to ten years, while residential leases are typically for around one year.

  • Higher costs

    Deposits of around 30% are generally required for commercial property leases. Building repair and maintenance costs can also be higher than those associated with residential property.

  • Attracting and keeping tenants

    Tenants can be affected by a range of factors, such as the economic environment, so you need to remain well informed about changes that could impact them, and your commercial property. When you find a good tenant, keeping them is crucial, so it’s a good idea to keep up regular contact with them and consider their needs.

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