Owner occupier, investment, lease doc, low doc, construction, development, bridging and SMSF loans: which commercial property loan fits your purchase.
Property Lending Hub
Commercial Property Loans · Loan Types · Decision Tree
There is no single commercial property loan. The purchase, the tenant and the borrower decide which of several loan types a lender will even consider, so the right starting point is what you are buying and why, not the rate on the brochure.
Quick Answer
The main types of commercial property loans are owner occupier, investment, lease doc and low doc loans for buying, construction, development and land loans for building, bridging loans for timing gaps, and SMSF loans under limited recourse rules. Match the purchase first, then the loan: our commercial property loans page shows how each one is placed, and the commercial property loan glossary entry covers the basics.
Also called: commercial loan types, commercial property finance options, commercial mortgage types. "Commercial loans" is also used for business loans in general, which our business loan definition covers; this insight is about loans secured on commercial property.
Which commercial property loan fits your purchase?
The commercial property loan that fits is decided by the purchase: buying premises to trade from, buying a tenanted investment, building or developing, bridging a timing gap and buying inside super each lead to a different loan type with a different assessment. The purchase picks the loan. The borrower's preference for a rate or a lender comes second, because a lender that does not offer the right type will not consider the deal at all.
Work through the questions below in order. The first one you answer "yes" to is usually the loan type to start with.
- Will your business trade from the property? Start with an owner occupier loan, assessed mainly on the business (see the next section).
- Is the property tenanted and bought for the rent? Start with an investment loan, then check whether the lease is strong enough for lease doc or whether your returns are behind and low doc fits better.
- Are you building, developing or buying land first? You need a construction, development or land loan, each with its own drawdown and exit rules.
- Do you need to settle before a sale or refinance lands? A bridging or short-term loan covers the gap, and the lender reads the exit first.
- Is your self managed super fund the buyer? The fund borrows under a limited recourse arrangement, with rules of its own.
| Loan type | Suits | What the lender assesses | Usual term shape |
|---|---|---|---|
| Owner occupier | A business buying the premises it trades from | Business financials, trading history and the rent the business stops paying | Typically a longer term, principal and interest, with interest only available from some lenders |
| Investment | A buyer of a tenanted property held for income | The rent, the lease, the tenant and the borrower's other income | Commonly principal and interest or a period of interest only, varies by lender |
| Lease doc | An investor buying a property with a strong lease in place | The lease and the tenant, with limited borrower financials | Commonly lower LVRs than a full doc loan, varies by lender |
| Low doc | A self-employed buyer whose tax returns are behind | BAS, business bank statements or an accountant's declaration | Typically lower LVRs and higher pricing than full doc |
| Construction | An owner building premises or an investment to keep | The building contract, costings, the builder and the finished value | Drawn in progress payments, then converted or refinanced at completion |
| Development | A developer building to sell | Feasibility, presales, experience and the sales exit | Short term, repaid from sales of the finished project |
| Land | A buyer of a site ahead of building | Land value, zoning, holding costs and the plan to build or sell | Short to medium term, with lower LVRs typical |
| Bridging | A buyer settling before a sale or long-term loan is ready | The exit strategy and the security | Short term, with interest often capitalised or prepaid |
| SMSF | A self managed super fund buying business real property | Fund cash flow, contributions and the single asset | Limited recourse, one asset per arrangement |
Once the type is settled, the property itself shifts the terms, which is covered further down. Our Property Lending Hub groups every property loan we broker if your purchase sits across more than one row.
Which loan suits buying your own business premises?
An owner occupier commercial loan suits buying your own business premises, because the lender assesses the business that will trade from the property and treats the rent it stops paying as part of the repayment case. The first split in commercial property lending is between buying to occupy and buying to invest, and it changes whose numbers carry the loan.
For an owner occupier, the business is the tenant. The lender reads its financial statements, trading history and existing debts, then asks whether the business can meet the loan repayments in place of the rent it pays now. Strong trading can support a loan on premises that would look thin as a pure investment, and weak trading can sink a deal on a well located building. Our guide to how commercial property loans work covers the owner occupied or investment decision and the buy or lease question in full, and the passive versus owner operated guide explains how lenders draw that line.
Buy to occupy
- Your business trades from the property
- Business financials carry the assessment
- Rent saved helps the repayment case
- A vacancy risk is your own business's risk
Buy to invest: the added risks
- A third-party tenant pays the rent
- The lease and tenant carry the assessment
- A short or weak lease cuts what you can borrow
- A vacancy can stop the income outright
Which loan suits a tenanted investment property, and where do lease doc and low doc fit?
A standard investment loan suits a tenanted commercial property, a lease doc loan fits when a strong lease can carry the assessment on its own, and a low doc loan fits when the borrower's own tax returns are behind. All three are secured on the same kind of property; what differs is which documents prove the loan can be repaid.
On a tenanted property, the lease does the serviceability work. The lender looks at who the tenant is, how long the lease has left to run, how rent reviews are set and whether the net rent covers the repayments by a comfortable margin, which is the debt service coverage ratio. Our insight on DSCR loans walks through that test.
Where the lease is long and the tenant is established, a lease doc commercial property loan can reduce or replace the borrower financials a lender asks for. Where the lease is fine but your returns are a year or more behind, a low doc commercial property loan uses BAS, bank statements or an accountant's declaration instead, typically at a lower LVR. An empty building is a different conversation, covered in our vacant commercial property finance guide.
Which loans fund building or developing commercial property?
Construction loans fund building premises or an investment you plan to keep, development finance funds building to sell, and land loans fund buying the site before either starts. They look similar on the surface, but each is repaid a different way, and lenders assess them on that exit.
What does a construction loan fund?
A construction loan funds the build itself, released in progress payments as each stage is completed and checked. The lender assesses the building contract, the builder, the costings and the value of the finished property, then expects the loan to convert to a standard commercial loan or be refinanced at completion. Our construction finance guide covers the drawdown process.
How is development finance different?
Development finance is different because the project is built to be sold, so the loan is repaid from sales rather than refinanced. Lenders read the feasibility, the developer's experience and the level of presales, and larger projects can stack a senior loan on a first mortgage with mezzanine finance behind it. See our development finance page and the property development finance guide for the detail.
When is a land loan used?
A land loan is used when you buy a site before you are ready to build, often while approvals are still running. With no income from the land, lenders typically lend a lower share of its value and want a clear holding plan and a clear path to a construction or development loan.
When do you need a bridging or short-term commercial loan?
You need a bridging or short-term commercial loan when you must settle a purchase before the money from a sale, a refinance or a long-term loan arrives. Common cases are buying new premises before the old ones sell, securing a property at auction before the long-term loan is approved, or covering a settlement date that the main lender cannot meet.
The lender's first question is the exit. A bridging loan is short by design, so the lender needs a clear and realistic way to be repaid, usually a contracted sale or a long-term loan that is already in progress. Our glossary entry on commercial bridging finance explains how these loans are structured, the private bridging loans guide covers business borrowers, and our private lending page shows where short-term funding sits.
Can your SMSF borrow to buy commercial property?
Your SMSF can borrow to buy commercial property through a limited recourse borrowing arrangement, and since 10 August 2026 business real property is the only real property a new arrangement can fund. The ATO's page on changes to limited recourse borrowing arrangements (published 28 July 2026, read 21 October 2026) states that arrangements entered into on or after that date can only acquire business real property, while existing arrangements, their refinance and contracts exchanged before that date are unaffected. Each arrangement still covers a single asset, with the lender's recourse limited to that asset, and Moneysmart's SMSFs and property guidance (read 21 October 2026) flags the higher costs, cash flow risk and difficulty of unwinding the structure. Our SMSF property loans guide covers what counts as business real property; take structure advice from your accountant and a licensed financial adviser.
How does the property type change the loan?
The property type changes how much a lender will lend, how the security is valued and which lenders will look at the deal at all. Lenders price the risk of having to sell the property if the loan goes wrong, so the easier a property is to resell, the better the terms usually are.
- Office and retail. Standard security for most commercial lenders, with terms driven by location, lease and vacancy.
- Industrial. Warehouses and factory units are commonly treated much like office and retail, with older or highly customised sites treated more cautiously.
- Specialised. Childcare centres, service stations, hotels, medical and similar purpose-built sites usually carry lower LVR caps, which vary by lender, because they are valued partly on the business that trades from them.
- Rural and mixed use. Fewer lenders, more conservative valuations and closer attention to the property's income.
Where this commonly lands is a buyer who expected the same terms on a specialised building as on a strata office and finds the loan cut back at valuation. Our insight on specialised commercial security and valuation explains how valuers and lenders approach those assets, and the commercial property valuation guide covers what they test.
What should you compare before choosing a commercial loan type?
Before choosing a commercial loan type, compare the LVR, the term and repayment shape, the documents it needs, how the valuation will be done and how you exit, before you compare rates. A lender's first test is whether the loan type matches the purchase, so getting that right saves an application that was never going to fit.
- LVR. The loan to value ratio sets your deposit; our insight on the commercial property loan deposit shows how it is worked out.
- Term and reviews. Commercial loans commonly carry shorter terms and periodic reviews, which matter more than the headline term.
- Repayment shape. Principal and interest or a period of interest only, which changes cash flow and the balance owed later.
- Documents. Full doc, lease doc or low doc, matched to what you can actually supply.
- Valuation. Who orders it, which method is used and how the property type will be treated.
- Exit. How the loan ends, whether by refinance, sale or repayment, especially for construction, development and bridging loans.
- Price. Only once the type fits; our insight on commercial property loan rates explains what moves pricing.
For the full process from enquiry to settlement, read our commercial property loan guide. If you want to know which loan type your purchase points to, you can check eligibility in a few minutes.
Commercial property loans are not one product. Owner occupier, investment, lease doc and low doc loans buy property, construction, development and land loans build on it, bridging loans cover timing gaps and SMSF loans run under limited recourse rules, now for business real property only. The purchase decides the type, the property type shifts the terms, and the rate only matters once both fit.
Key takeaway: decide what you are buying and why before you compare lenders, because the purchase picks the loan.Frequently Asked Questions
The different types of commercial loans for property are owner occupier, investment, lease doc, low doc, construction, development, land, bridging and SMSF loans. Each is matched to a purchase rather than to a type of borrower, so a business buying its own premises and an investor buying a tenanted shop are assessed differently. If you meant business loans more broadly, our business loan definition covers term loans, lines of credit and invoice finance.
The best loan for commercial property is the one that matches what you are buying and why, not the one with the lowest headline rate. An owner occupier loan usually suits premises your business will trade from, while a tenanted investment may suit a standard investment loan or a lease doc loan if the lease is strong. Compare the LVR, term, documents and exit before you compare price.
The types of commercial loans for real estate fall into four groups: loans to buy, loans to build or develop, loans to bridge a timing gap and loans for self managed super funds. Buying uses owner occupier, investment, lease doc or low doc loans, while building uses construction, development or land loans. Development finance is the one most often confused with construction, because it is repaid from sales rather than refinanced, as our property development finance guide explains.
The LVR you can get on an industrial or specialised property depends on how easily the lender could resell it. Standard industrial units are typically treated much like office and retail, while specialised property usually carries lower LVR caps, which vary by lender. Our insight on specialised commercial security explains how childcare centres, service stations and hotels are valued.
A bridging loan can be used to buy commercial property when you need to settle before a sale, a refinance or a long-term loan is ready. The lender assesses the exit first, so you need a clear and realistic way to repay it within a short term. Our glossary entry on commercial bridging finance explains how these loans are structured.
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