Every rent cheque a Melbourne small business writes builds someone else's equity, not yours. A commercial property loan lets you buy the factory, warehouse, shop or office your business already trades from — but commercial lending works very differently to a home loan, with smaller borrowing limits, larger deposits, and lender rules most business owners have never had explained to them properly. This guide breaks down exactly how much deposit you need, what it will actually cost you in Victoria in 2026, and how to structure the purchase so it works for your business rather than against it.
At Integrated Finance Group's commercial finance team, we help Melbourne SME owners buy their own premises every month — from a panel-beater in Campbellfield to a medical practice in Essendon. We work across more than 20 lenders, from the major banks to specialist commercial lenders, and we know exactly which ones are genuinely competitive for owner-occupier small business purchases right now.
Quick answer: Most commercial property loans require a 20–35% deposit, well above the 5–10% possible on a home loan, because Lenders Mortgage Insurance isn't available on commercial lending. Strong owner-occupiers buying well-located industrial premises can sometimes reach 80% LVR (a 20% deposit); retail, office and specialised properties usually need 25–35% down. A broker who knows which lenders currently favour your property type and industry can make a genuine difference to both your deposit and your rate.
What Is a Commercial Property Loan and How Is It Different From a Business Loan?
A commercial property loan is finance secured against commercially zoned real estate — a warehouse, office, shop, factory or industrial unit — used to purchase, refinance or develop the asset. Unlike a general business loan, which might be unsecured or secured against varied business assets and used for working capital or equipment, a commercial property loan is specifically secured against real property, which typically means a lower interest rate and a longer term than an unsecured facility.
The most important distinction lenders make is who will occupy the building. If your own business will run from the premises — generally at least 51% of the floor space — you're assessed as an owner-occupier, which is the strongest position to borrow from. If you're buying to lease the building to someone else, you're assessed as a commercial investor, and the deposit and rate requirements are tighter. A smaller number of purchases fall under working capital or SMSF purposes, each assessed differently again.
It's also worth knowing that most commercial property loans used wholly for business purposes fall outside the National Consumer Credit Protection Act 2009 (NCCP) — the legislation that governs home loans and gives borrowers standard consumer protections. This doesn't mean commercial lending is unregulated or unsafe, but it does mean fewer default protections apply, which is exactly why getting the structure right from day one — with the right lender and the right loan purpose classification — matters more than it does for a home loan. Our business finance and commercial finance teams handle this distinction for every application we submit.
How Much Deposit Do You Need to Buy Commercial Property in Melbourne?
Most Melbourne commercial property purchases require a 20% to 35% deposit, reflecting maximum lender LVRs of roughly 65% to 80%. Where you land in that range depends heavily on the property type, your industry, and whether you're an owner-occupier, investor, or buying through your SMSF. Industrial assets currently attract the sharpest terms; specialised properties need the most cash upfront.
| Property Type | Typical Owner-Occupier LVR | Indicative Deposit | Notes for Melbourne Buyers |
|---|---|---|---|
| Industrial (factory, warehouse) | Up to 80% | From 20% | Lender favourite nationally; Melbourne's northern industrial corridor (Campbellfield, Coburg North, Broadmeadows) has run at elevated vacancy through 2026 on the back of speculative supply — meaning more room to negotiate on price than in recent years |
| Office (metro/suburban) | 65–75% | 25–35% | Location, building quality and lease profile scrutinised closely |
| Retail / shopfront | 65–75% | 25–35% | Strip shopping precincts (e.g. Sydney Road, Puckle Street) generally fund more easily than isolated retail |
| Specialised (medical, childcare, hospitality) | 50–70% | 30–50% | Smaller pool of lenders; fit-out and licensing considered |
| Via SMSF (any type) | Up to ~70% | From 30% | Uses a Limited Recourse Borrowing Arrangement (LRBA); see below |
One detail that catches out first-time commercial buyers: your LVR is calculated on the lender's valuation, not your contract price. If the valuation comes in under what you've agreed to pay, the shortfall falls straight onto your deposit. Because there's no LMI safety net in commercial lending the way there is with home loans, this gap has to be covered in cash or equity — which is exactly the kind of detail a broker checks for before you're locked into a contract.
Should You Buy as an Owner-Occupier, Through a Company, or Via Your SMSF?
Most Melbourne small business owners buy commercial premises one of three ways: personally or through a company as an owner-occupier, through a family trust, or inside their self-managed super fund (SMSF) using an LRBA. Each has different tax, asset-protection and lending implications, and the right structure depends on your broader financial position — this is where advice from your accountant should sit alongside your broker's lending advice.
Buying as an owner-occupier (personally, via a company, or via a trust that operates the business) generally gets you the best LVR and rate, because the lender sees direct alignment between your business's success and the loan being repaid. This is the most common structure for a first commercial purchase.
Buying through your SMSF and leasing the property back to your own business at market rent is a well-established strategy — your rent then builds your own retirement savings instead of a landlord's. A recent update makes this more relevant than ever: the government's ban on new SMSF residential property borrowing takes effect from 1 July 2027, but it applies only to residential property. Commercial and industrial real property used for business purposes is entirely unaffected, meaning SMSF ownership of your business premises remains one of the few property-borrowing strategies still fully available inside super after that date. We cover the residential side of this change in detail in our SMSF LRBA ban guide, and our SMSF lending team can model whether a commercial purchase suits your fund. SMSF commercial LVRs are typically capped lower, around 65–70%, and licensed financial advice is required before you proceed — we arrange the lending, but the strategy decision sits with your adviser and accountant.
What Do Lenders Look For When Assessing a Small Business's Commercial Loan Application?
Commercial lenders assess your business almost as closely as the property itself. They look at four things: your business's serviceability (cash flow, tax returns and financials), the asset (type, location, condition and how easily it could be re-let or re-sold), your trading history and credit file, and the loan structure you're applying under.
- Serviceability and the Debt Service Coverage Ratio (DSCR): most lenders want your business income to cover loan repayments by at least 1.25 to 1.5 times. A business with $150,000 in serviceable income against $100,000 in annual repayments sits comfortably inside most lenders' policy.
- Trading history: two years of consistent or growing revenue is the standard benchmark, though some second-tier and specialist lenders will consider strong applicants with 12 months of trading, similar to the ABN-age tiers we cover in our ABN home loans guide.
- Add-backs: as with home loan applications, legitimate non-cash and one-off expenses — depreciation in particular — can often be added back to your net profit to lift your assessable income, sometimes significantly.
- Documentation: full-doc applications need two years of business and personal tax returns, financial statements and BAS; low-doc pathways accept an accountant's declaration and 6–12 months of bank statements, usually at a lower LVR.
- The property itself: zoning, building condition, environmental risk (older industrial sites are checked for asbestos and contamination history) and location all affect which lenders will consider the deal at all.
If your business also runs vehicles or equipment, it's worth knowing that commercial property finance and asset finance are usually structured as entirely separate facilities — our guide to chattel mortgage vs finance lease vs hire purchase covers how to finance the equipment side without tying it to your property loan, and our car and asset finance team can run both applications alongside each other.
What Will Buying Commercial Property in Melbourne Actually Cost You in 2026?
Beyond your deposit, budget for stamp duty (or the newer Commercial and Industrial Property Tax in some cases), legal and conveyancing fees, a commercial valuation, lender establishment fees, and potentially GST on the purchase price. On a $1,000,000 Melbourne commercial property at 70% LVR, total cash required at settlement — deposit plus costs — commonly lands somewhere between $330,000 and $380,000, depending on the property type and whether GST applies.
Little-known 2026 update: Victoria has been transitioning commercial and industrial property out of stamp duty entirely. Under the Commercial and Industrial Property Tax (CIPT) reform, eligible commercial and industrial properties pay stamp duty one final time at their next sale from 1 July 2024, then move into an annual property tax instead — with no further stamp duty payable on future sales of that property. Most competitor guides on this topic are still quoting stamp duty as an ongoing, unavoidable cost for every commercial purchase. Whether your purchase falls under the old or new system depends on the property's sale history, so this is a detail worth checking with your broker and conveyancer before you sign. Our Victorian stamp duty guide covers the residential rules in full.
GST is the other cost people forget. Commercial property sales often attract GST, though depending on how the sale is structured — for example under the going concern exemption or the margin scheme — it may be reduced or claimable back through your BAS. This has genuine cash-flow implications at settlement, since you may need to fund the GST component upfront even if you recover it later, so involve your accountant before you sign a contract, not after.
If your business is eligible, it's also worth asking your broker whether a government-backed lending program could apply to part of your finance structure — our SME Loan Guarantee Scheme guide explains how these programs can reduce the security a lender requires for eligible business purposes, which occasionally extends to premises-related borrowing depending on the scheme's current settings.
Is It Cheaper to Buy Your Business Premises Than Keep Renting in 2026?
For many established Melbourne SMEs, loan repayments on a purchased property can land close to what you're already paying in rent — with the difference being that you build equity in an asset you own rather than your landlord's. Whether buying wins out depends on your deposit, the interest rate you secure, how long you plan to stay in the premises, and what else that deposit capital could otherwise do for your business.
A simple way to frame it: if your annual rent is materially close to what interest-only repayments on a purchase would cost, and you intend to occupy the property for 7+ years, buying is usually worth modelling properly. If your industry needs flexibility to relocate or scale quickly, renting may still be the smarter short-term call. This is a numbers exercise specific to your business, your industry and your growth plans — not a rule of thumb — and it's exactly the kind of side-by-side modelling our brokers run for clients before they commit to either path. Book a free consultation and we'll run the numbers on your actual premises and rent.
Frequently Asked Questions About Commercial Property Loans
What is the minimum deposit for a commercial property loan in Melbourne?
Most lenders require a 20–35% deposit for commercial property, compared with as little as 5–10% for a home loan. Strong owner-occupiers buying well-located industrial premises can sometimes reach 80% LVR (a 20% deposit), while retail, office and specialised properties typically need 25–35% down. There is no Lenders Mortgage Insurance available on commercial loans, so the deposit shortfall cannot be insured away — it must be genuine equity or savings.
Can I buy commercial property through my SMSF if I'm a Melbourne business owner?
Yes. Buying business real property through a Limited Recourse Borrowing Arrangement (LRBA) inside your SMSF and leasing it back to your own business at market rent remains fully available in 2026. The government's ban on new SMSF borrowing applies only to residential property from 1 July 2027 — commercial and industrial premises used for business purposes are unaffected, and for many Melbourne business owners this is now a more attractive structure than before. Lenders typically cap SMSF commercial LVRs lower, often around 65–70%, and licensed financial advice is required before proceeding.
Is a commercial property loan regulated the same way as a home loan?
No. Commercial property loans used wholly for business purposes generally fall outside the National Consumer Credit Protection Act 2009 (NCCP), which means fewer standard consumer protections apply compared with a residential mortgage. This makes lender selection and application preparation more important, not less — a broker who understands commercial lending policy helps ensure the loan is structured appropriately from the outset.
How long are commercial property loan terms compared to home loans?
Commercial property loan terms are usually shorter than home loans — commonly 5 to 15 years, occasionally extending to 20 or 25 years for strong owner-occupier assets, compared with the standard 30-year home loan term. Many lenders also review the facility every one to three years, reassessing your financials and the property's valuation, which is different to how residential lending works.
Should I use a broker or go directly to my bank for a commercial property loan?
A broker compares your deal across a panel of major banks, second-tier lenders and commercial specialists, rather than only the one product your existing bank can offer. Because commercial lending is priced deal-by-deal and policies vary widely between lenders, the difference between two offers on the same property can run into tens of thousands of dollars over the loan term. Most brokers are paid by the lender at settlement at no direct cost to you, though this should always be disclosed upfront in writing.
Ready to Stop Renting and Start Owning Your Premises?
Every commercial purchase is different. Book a free, no-obligation 15-minute strategy call with Frank Marin — we'll look at your deposit, business structure, and the property you have in mind, and tell you exactly which lenders are realistic options right now.
Book a free consultation or call 0413 032 898
General information only. This article does not constitute financial advice. Please speak with a qualified finance broker or accountant before making any financial decisions. Integrated Finance Group — BLSSA Pty Ltd ACL 391237.