Quick answer: There is no single commercial-property deposit percentage. The cash or equity required depends on the lender’s accepted property value, maximum LVR for that asset and borrower, purchase costs, GST treatment, property type, lease/occupancy and any additional security.
Commercial-property borrowers often ask for the deposit percentage when the real number is total equity required at settlement. That includes the gap between price and debt plus duty, legal/valuation costs and any GST or working-capital effect.
Have a property and price? Request a commercial-property finance assessment before assuming the advertised purchase price is the lender’s value.
Worked example: valuation can change the cash requirement
Illustrative only. A 70% LVR is used only to show the calculation; it is not a universal lender limit.
| Item | Illustration |
|---|---|
| Purchase price | $1,500,000 |
| Lender valuation | $1,400,000 |
| Illustrative lending level | 70% of lender value |
| Illustrative loan | $980,000 |
| Price less loan | $520,000 |
| Plus transaction costs / GST where applicable | Additional cash requirement |
| Key point | The lower valuation increased the equity gap |
LVR is applied to the lender’s accepted value
If the valuation is below the contract price, the borrower normally has to fund the extra gap unless another acceptable security or structure is available.
Property type changes lender appetite
A standard warehouse, office or retail property can be assessed differently from specialised assets such as childcare, petrol stations, hospitality or purpose-built medical property. Vacant property can also be treated differently from a well-leased investment.
Owner-occupied and investment transactions tell different stories
For an owner-occupied property, the operating business often provides the repayment source. For an investment property, lease quality and rental income may be more central.
Do not spend the whole cash reserve on settlement
Commercial property can require fitout, GST funding, vacancy reserves or business working capital after settlement. The property deposit should be assessed alongside the operating cash requirement.
What to do next
Check the likely commercial-property funding structure with the purchase price, property type, lease/occupancy and available equity.
Frequently asked questions
Do commercial property loans always need a 30% deposit?
No. LVR and equity requirements vary materially by lender, property, borrower and transaction.
Is LVR based on the purchase price or valuation?
Lenders generally work from their accepted security value, which may differ from the contract price.
Can home equity form part of the contribution?
Potentially, subject to the broader structure and lender policy.
Do I need extra cash for costs?
Usually yes. Model duty, legal and valuation costs and any GST or other settlement requirements separately from the property price.
Sources and verification
Related GPS Finance guides
- Commercial valuation below purchase price
- Use home equity for the deposit?
- Commercial property finance
General information only. Business and commercial lending policy, pricing, security, guarantees, documentation and approval vary by lender and transaction. Examples are illustrative and are not credit, legal, tax or accounting advice.
Need help matching this to a business-finance option?
GPS Finance can review the funding purpose, conduct, documents and lender fit before you make a formal enquiry.
