Commercial property loan calculator

How much deposit do you need for commercial property?

Many commercial lenders cap borrowing at around 65% to 70% of the property's value, so a deposit of 30% or more is common, plus stamp duty and costs. Strong owner-occupiers can sometimes borrow more, while specialised, regional and vacant property usually needs a larger deposit. Equity in other property can often replace some or all of the cash deposit. The calculator flags any LVR above 70%, where your options narrow.

How are commercial loan repayments worked out?

Most commercial loans are either principal and interest, where each repayment reduces the balance, or interest-only for a set period before switching to principal and interest. Interest-only keeps early repayments lower, which can help a business settling into new premises, but the principal repayments that follow are higher because the loan is repaid over a shorter remaining term. Commercial loan terms are commonly up to 15 to 30 years, often with the facility reviewed every few years.

Owner-occupied or investment?

For owner-occupied premises, lenders assess the business's financials and its ability to pay the loan. For an investment property, they assess the lease: the rent, the tenant's strength and how long the lease has left. A long lease to a strong tenant supports a larger loan than a short lease or a vacant building. See commercial property finance for more on how lenders assess each.

What does the calculator leave out?

• Stamp duty and buying costs, which you'll usually fund yourself. Use the stamp duty calculator.
• Loan fees such as establishment, valuation, legal and annual review fees.
• Rate changes. Most commercial loans are variable or fixed for a few years, so repayments will move over a long term.
• GST. If GST applies to the purchase, you'll need funds for it until it's refunded, unless the sale is a GST-free going concern.

Bank, non-bank or private?

Banks offer the lowest rates but commonly take four to eight weeks and want full financials. Non-bank lenders offer low-doc options for self-employed buyers with a larger deposit. Private lenders can settle urgent purchases in one to three weeks at a higher cost, often as a bridge to a bank loan. A broker can tell you which is realistic before you sign a contract.