COMMERCIAL PROPERTY · EAST MONEY GUIDE
How much deposit do you need for commercial property?
There is no single deposit percentage for every commercial property. The required contribution depends on the asset, location, lease, borrower, loan purpose, valuation and lender appetite.
East Money · General information
Property type changes the lending ratio
A standard office, warehouse or retail property may be treated differently from a specialised asset. Market depth, alternative use, condition and location influence how readily the property can be valued and sold.
Owner-occupied and investment deals differ
A business buying its own premises relies on trading cash flow, while an investment loan may rely heavily on lease quality and rent. The lender considers both the property and the borrower.
The deposit is not the whole cash contribution
Allow for duty, GST treatment, legal work, valuation, environmental or building reports and lender fees. Keep sufficient liquidity after settlement for the property and business.
- Purchase contribution
- Government charges and GST advice
- Professional reports and legal costs
- Finance fees and post-settlement buffer
Valuation can change the required cash
Commercial finance is commonly based on the lower relevant value under lender policy rather than the buyer’s expectation. A valuation below the contract price can increase the cash required.
Stronger information can widen the options
Current financials, a clear property summary, lease documents and evidence of contribution help lenders assess the transaction. Specialist assets or short finance dates require more preparation.
QUESTIONS PEOPLE OFTEN ASK
Useful points to clarify early.
Is a 20% deposit enough for commercial property?
Sometimes, but it cannot be assumed. Required equity varies with the asset, borrower and lender policy, and purchase costs are additional.
Can residential equity fund the contribution?
It may, subject to valuation, serviceability, security and the structure of the overall borrowing.
How long does approval take?
Commercial valuations, entity documents and credit assessment can take longer. Start before the contract finance deadline.
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