Commercial property lending sits in a different category to residential lending. A lender is looking at a building that earns money, so the assessment starts with the asset and the tenancy attached to it. The borrower still matters, but the property has to stand up first. Understanding that order makes the rest of the process much easier to follow.
What gets examined first
Most of the early questions are about the tenancy and the building itself:
- The lease — how long is left to run, what options the tenant holds, and how rent reviews are structured.
- The tenant — how established the business is, how long it has occupied the premises, and how reliant the property is on that one occupant.
- The property type — a standard office, retail shop or warehouse is read differently to something purpose-built for one industry.
- Location and demand — how readily the space could be re-let if the tenant moved out.
Where your own position comes in
Your financial position is still assessed, generally once the asset itself stacks up. Where a lease is short, the premises are vacant, or the building is specialised, lenders tend to place more weight on income from elsewhere and on your experience with commercial assets. Owner-occupiers are viewed differently again, because the business using the premises is also the one paying for it. Having leases, a tenancy schedule, outgoings and recent financial statements organised early usually keeps the assessment moving.
Video transcript
Hi, I'm Jack Si from Australian Finance Service Solutions.
Commercial property lending isn't assessed the same way as a home loan. Lenders look at the property's income first, the tenant, the lease length, the rental yield, before they look at your own income. The property has to make sense as an asset on its own, not just as something you can afford to service.
If you want us to look at your situation, send us a message.
This is general information only and is not credit advice.
Want us to look at your situation? Send us a message or call 1300 968 888.
General information only, not credit advice. It doesn't take your personal circumstances into account.
Jack (Muyuan) Si is a Credit Representative (516785) of Buyers Choice Licencing Pty Ltd ACN 626 172 281 (Australian Credit Licence No. 509484).