Commercial property loan deposits are typically 20 to 40 per cent of the purchase price in Australia. The exact figure depends on the property type, the strength of any lease in place, the loan-to-value ratio (LVR) the lender will go to, and your business position. This article walks through what shifts the deposit number up or down, and the practical levers for funding it. For broader context on the category, see commercial property finance.
The headline ranges
For most commercial property purchases, expect the following deposit bands as a starting point.
Owner-occupier (you operate from the property): 20 to 30 per cent deposit. Lenders see owner-occupier deals as lower risk because your business depends on the property, so the relationship is structurally aligned. Some specialist lenders go to 80 per cent LVR (20 per cent deposit) for well-presented deals.
Investment property (held for rental income): 30 to 35 per cent deposit. Higher than owner-occupier because the lender takes both property risk and tenant risk.
Specialised property (medical, hospitality, childcare, service stations): 35 to 50 per cent deposit. Specialised use limits resale market, so lenders price for that.
Land or development site: 35 to 50 per cent or more. Land is harder to value precisely and harder to sell quickly if a development stalls.
What pushes the deposit number up or down
Property type matters most. A standard industrial unit in a metro area with a national tenant on a 7-year lease is the easiest commercial deal a lender will see, and the deposit can sit at the low end of the range. A purpose-built childcare centre on a long-term lease is harder, even with strong tenant covenant.
Lease in place. A property with an existing tenant on a long lease to a strong covenant is easier to finance than a vacant property. The lender effectively underwrites the tenant as well as the property.
Location. Capital city CBD-adjacent, established industrial precincts, and well-leased retail strips attract competitive lender appetite. Regional, secondary locations or speculative zones narrow the lender pool and shift the deposit higher.
Business strength. Your trading history, profitability, and existing borrowings all factor in. A well-established business with healthy serviceability often gets the better end of the deposit band.
Self-managed super fund (SMSF) deposits
Buying commercial property through an SMSF is a recognised strategy, particularly for business owners who want to hold the premises their business operates from. SMSF lending typically requires a larger deposit (30 to 40 per cent) because the lending is non-recourse (the lender cannot pursue the rest of your super assets if the loan defaults).
The structure is specific, the lenders that do SMSF lending are specialised, and you need an accountant and SMSF auditor involved from the start. The deposit number is only one piece of the equation.
Funding the deposit
For owner-occupiers, common deposit sources include:
Business cash reserves. The simplest source but obviously reduces working capital available for trading.
Equity in your home (where you are willing to use it). Some lenders accept a second mortgage on your residential property as additional security, which can effectively reduce the cash deposit required.
Sale of an existing commercial property. Common in growth scenarios where the business is moving to larger premises.
Vendor terms. Some sellers will accept a deposit plus seller finance for the balance. Less common but worth asking on smaller deals.
Partner contribution. Bringing in a partner or investor on the property purchase can spread the deposit across more parties.
Reducing the deposit through better packaging
For a given property, the deposit can sometimes be reduced (and certainly the rate sharpened) through better deal packaging:
Two years of clean financials presented properly, with a clear narrative on revenue growth.
Strong demonstration of serviceability across reasonable interest-rate stress scenarios.
Properly prepared valuations that reflect market reality and any value-add the purchase brings.
Lender shortlist that actually fits the property type — going to a generalist bank when a specialist non-bank would price the deal tighter is the most common mistake we see.
A note on stamp duty and other costs
The deposit number is not the only cash required at settlement. Plan for stamp duty (varies by state, typically 4 to 6 per cent of purchase price for commercial), legal fees (1 to 2 per cent), lender establishment fees (0.25 to 1 per cent), valuation fees, and any building inspection or environmental assessment costs.
A $1.5M commercial purchase with a 25 per cent deposit needs roughly $375,000 deposit plus around $100,000 to $150,000 in settlement costs. Always plan for the total cash position, not just the deposit headline.
Where to from here
We compare commercial property finance across our whole lender panel and structure deals so the deposit + rate package suits the property type. No fees to clients; the lender pays us when finance settles. Book a 20-minute brief to map out the deposit number realistic for your specific deal.
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