I'm Jason Birks, a Brisbane mortgage broker. I spent over ten years lending at Westpac and NAB before starting Birks Financial Group, and I compare more than 60 lenders. I help business owners buy their own premises and investors buy office, retail, industrial and mixed-use property.
How commercial loans differ from home loans
- Bigger deposits. Lenders commonly lend up to 70% to 80% of the value, depending on the property, the location and your financials.
- Shorter terms. Often shorter than a 30-year home loan, with some lenders reviewing the loan every few years.
- Higher rates and fees. Pricing reflects the higher risk, and it's more negotiable than most people expect.
- Different paperwork. Business financials, tax returns, the lease and details of the tenant, as well as your personal finances.
Buying your own premises
Owning your premises can give you control over your rent and location, and the business can pay rent to you or your structure. Lenders look closely at the business's trading history and cash flow. Some business owners buy through their self-managed super fund, which has its own lending rules. See SMSF loans. Talk to your accountant about the structure that suits you.
Commercial investments
For an investment, the lease does a lot of the work. Lenders look at the rent, how long the lease has to run, the quality of the tenant and how easy the property would be to re-lease. A long lease to a solid tenant makes a property far easier to finance.
Questions people ask
How much deposit do I need for a commercial property?
Usually 20% to 30% of the price plus stamp duty and costs, sometimes more for specialised properties.
Can I use equity in my home?
Yes, many buyers use equity in residential property to fund the deposit. It needs careful structuring so both loans stay manageable.
Is GST charged on commercial property?
Often, yes, unless the sale is a going concern or another exemption applies. Get advice from your accountant before you sign.
Can I buy commercial property in my super fund?
Yes, through a self-managed super fund with a specific type of loan. It has strict rules, so get advice before you start.
