Commercial Property Loans: Funding Your Office or Warehouse

Purchasing a commercial property, such as an office, warehouse, or retail store, is a big milestone in the life of any business firm. The suitable property can help grow your business, generate steady returns, and create long-term wealth. Commercial property loans are utilised by most businesses to finance these purchases.

This guide will explain how commercial property loans are made, how repayments are calculated, what interest rates to expect, and simple tips on obtaining the best loan for your business.

What Are Commercial Property Loans?

A commercial property loan is a type of financing that allows borrowers to purchase, refinance, or develop property for business or investment purposes. Common examples include:

• • Office buildings
  • Warehouses
  • Retail shops
  • Industrial facilities

These loans are different from home loans. Lenders look at:

• The income the property can generate
• The financial health of your business

Most commercial loans charge higher interest rates and shorter repayment periods than home loans. Sometimes, business owners may need to personally guarantee the loan. A commercial property loan calculator can help you to see an estimate of your monthly repayments before taking the loan.

How Commercial Property Loans Work

Lenders review your business finances and the property itself. They check:

• Cash flow
• Current debts
• Assets
• Profit and loss statements

The property usually acts as security for the loan. This means if repayments are missed, the lender could take ownership.

Loans are often structured as:

• Principal and interest – You pay both the loan and interest each month.
• Interest-only – You pay only interest for a set period, which helps with short-term cash flow.

Repayments can be weekly, every two weeks, or monthly. A loan calculator helps plan your payments.

Current Commercial Property Loan Interest Rates

Loan-to-value ratio (LVR): The higher the LVR, to higher the rates

Property type: Specialty properties (hotels, hospitals, gas stations, etc.) are higher than offices and warehouses.

Loan term: Shorter loan terms may be more expensive, but the total interest paid is lower.

Business finances: Having good cash flow facilitates a lower rate.

As of up to 2025, generally, rates usually vary from around 5.85% to 9.5%. It is best to keep an eye on commercial property loan rates in Australia to get the best deal. For official interest rate updates and economic data, you can check the Reserve Bank of Australia (RBA)

Steps to Get a Commercial Property Loan

Check Your Finances

Look at your money, savings, and debts. Make sure you can comfortably make repayments.

Decide How Much You Need

Think about how much to borrow, the length of the loan, and whether to choose a fixed or variable rate.

Use a Loan Calculator

A commercial property loan calculator helps you see monthly repayments and total interest before you borrow.

Compare Lenders

Check different banks or lenders. Look at their interest rates, fees, and loan rules to pick the best one.

Prepare Your Documents

Gather your business accounts, tax returns, and information about the property you want to buy.

Apply for the Loan

Send your application to the lender. Approval usually takes a few weeks.

Settlement

Once the loan is approved, the lender releases the money. You start making repayments.

How Much Can You Borrow?

The loan amount depends on:

• Property value – Usually 60–80% of the property’s market value
• Business cash flow – Strong, steady income helps
• Deposit size – A larger deposit can increase eligibility
• Loan purpose – Buying, refinancing, or developing may affect limits

For example, a $1 million warehouse with a 70% LVR could allow you to borrow $700,000. Use a commercial property loan calculator for accurate repayment estimates.

Using the Loan for Renovations

Many lenders allow some funds for renovations:

• Office upgrades – Add workspaces or modern facilities
• Warehouse improvements – Racking systems, lighting, or security
• Retail renovations – Interior or storefront upgrades

This can boost property value and rental income. Always tell your lender about renovations, as it may affect the loan terms.

Fixed vs Variable Interest Rates

Loans can have:

• Fixed rates – Repayments stay the same for a set period.
• Variable rates – Rates change with market conditions.

Some borrowers use a mix for stability and flexibility.

Documents You Need

Lenders often ask for:

• Business financial statements
• Tax returns (personal and business)
• Property details (valuation, lease, or plans)
• ID and credit history
• Business plan for investment or development

Being prepared speeds up the process.

Benefits for Businesses and Investors

• Steady Rental Income – Leasing provides regular cash flow
• Property Appreciation – Assets generally grow over time
• Tax Advantages – Interest and depreciation may be tax-deductible
• Business Expansion – Owning property allows scaling without renting

Common Mistakes to Avoid

• Borrowing too much – Only borrow what you can afford to pay back.
• Ignoring hidden costs – Remember extra expenses like taxes, insurance, and repairs. They add up. For tax-related guidance for commercial property and business investments, you can refer to the Australian Taxation Office
• Not comparing lenders – Interest rates vary between lenders, so always compare to save money.
• Overlooking loan terms – Check early repayment fees and interest calculation
• Overreliance on estimates – Commercial property loan calculator results are guides

FAQs

Q1: What is the best commercial property loan for small businesses?

Compare interest rates, fees, and loan flexibility before choosing.

Q2: How do I calculate commercial property loan repayments?

Use a commercial property loan calculator. Enter loan amount, term, and interest.

Q3: Can SMSFs get commercial property loans?

Yes, SMSF commercial property loans let self-managed super funds invest in property.

Q4: Are there loans for healthcare properties?

Yes, some lenders offer loans for medical and healthcare properties with competitive rates.

Q5: How do rates compare across lenders?

Rates vary by lender, property type, and LVR. Compare commercial property loan rates in Australia.

Why Choose Probiz Finance

At Probiz Finance, we help businesses secure the right commercial property loans:

• Advice on commercial property loan interest rates
• Guidance with business property financing calculator tools
• Compare lenders for the best rates
• Step-by-step support from application to settlement

We make the loan process simple, clear, and personalised to your business.

Conclusion

Taking a commercial property loan is a major move for any business. Before applying, check the latest interest rates, try a loan calculator to estimate monthly payments, and organise all your paperwork. Compare different lenders carefully, watch out for usual mistakes, and seek guidance from a professional if needed. Owning a commercial property can provide your business with reliable income, stability, tax advantages, and long-term growth.

Thinking about taking your business forward?  Contact us now.

Disclaimer: Probiz Finance ABN 52 661 057 647 | Credit Representative Number 542838 is authorised under Australian Credit Licence No..- 384704. Your full financial situation and requirements need to be considered before any offer and acceptance of a loan product