What Are the Common Types of Commercial Property Loans in Logan and QLD?

Commercial property loans in areas like Logan and the Gold Coast fall into a few primary categories, catering to different financial situations and business structures. The type of loan you choose directly impacts the required deposit and the documentation needed.

1. Standard (Full Doc) Commercial Loan

Who is it for? Established businesses and investors who can provide full financial documentation, including tax returns and financial statements.

What is it? This is the most common and often most cost-effective loan type. Lenders rely on a full review of the business's or investor's financial health, cash flow, and tax history to assess the application.

Local Context: For well-established commercial properties in high-demand zones within Logan or the Gold Coast, a full documentation loan typically offers the sharpest interest rates and best terms.

2. Low Documentation (Low Doc) Commercial Loan

Who is it for? Self-employed business owners and investors who have strong cash flow but may struggle to prove their income with traditional tax returns due to 'write-offs' or recent business restructuring.

What is it? Low Doc loans require less financial paperwork. Instead of full tax returns, lenders usually accept alternative proof of income, such as:

• A borrower-completed Income Declaration Form.
• Business Activity Statements (BAS).

• Business Bank Statements (typically the last 6-12 months).
• A letter from an accountant.

Why is it important for self-employed in our region? The Logan and Gold Coast region has a high concentration of successful small business owners and self-employed people. Low Doc options are critical for those who want to invest using their business's genuine earning capacity, even if their taxable income is minimised. These loans carry a slightly higher risk for the lender, which is typically offset by a lower maximum Loan-to-Value Ratio (LVR) and a marginally higher interest rate.

3. SMSF Commercial Property Loan

Who is it for? Investors looking to purchase a commercial property within their Self-Managed Superannuation Fund (SMSF).

What is it? This is a specialised loan product known as a Limited Recourse Borrowing Arrangement (LRBA). It allows the SMSF to borrow funds to buy commercial property, which can be an excellent long-term investment or a way for a business owner to purchase their premises through their super fund. The "limited recourse" nature protects the rest of the SMSF's assets if the loan defaults.

Compliance Note: SMSF loans are subject to strict Superannuation laws and are more complex than standard lending. It's essential to get advice from a financial advisor or accountant to ensure the property meets the 'sole purpose test' for providing retirement benefits.

What Deposit is Required for a Commercial Property Loan?

The deposit required for commercial property is significantly higher than for a residential home loan. This is measured by the Loan-to-Value Ratio (LVR), which is the percentage of the property value the lender is willing to finance.

Typical Loan-to-Value Ratios (LVRs) and Deposit Ranges

Loan TypeMaximum LVR (Approx.)Minimum Deposit RequiredStandard (Full Doc)70% – 80%20% – 30%Low Doc60% – 70%30% – 40%SMSF Commercial Loan60% – 75%25% – 40%

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Note: These figures are indicative. The actual LVR depends heavily on the lender, your financial strength, and the specific location and type of commercial property (e.g., a retail shop, industrial warehouse, or specialised medical centre).

Factors Influencing Your Deposit Requirement

For Logan, Beenleigh, and Gold Coast properties, the following factors play a crucial role in determining the final deposit:

1. Property Type: A 'vanilla' commercial property like a standard office space or a basic industrial warehouse with a strong lease will generally secure a higher LVR (lower deposit) than a 'specialised' property like a motel, petrol station, or a property that relies on one specific tenant/business type.
2. Lender Appetite: Lenders have different risk profiles for commercial properties. Some may offer a higher LVR (up to 80% for full doc) on a prime commercial asset in a growing Gold Coast suburb, while others may cap it at 65% for a property in a less-established industrial zone in Logan.

1. Borrower Strength: A borrower with a strong financial history, a high net worth, and a proven track record of managing property or business debt will generally be offered better terms and a higher LVR (lower deposit) than a first-time commercial investor.

1. Additional Security: If you own a residential property (like your home in Tamborine) with significant equity, some lenders may allow you to use this as additional security to achieve a higher LVR on the commercial purchase, effectively reducing your required cash deposit.

Don't Forget the Costs!

Your deposit is just the start. When calculating the total funds required, you must factor in purchasing costs, including:

• Stamp Duty: This is a major cost and varies by the purchase price in Queensland.
• Legal/Conveyancing Fees: Essential for the commercial contract.

• Valuation Fees: Commercial valuations are typically more expensive than residential ones.
• Lender Fees: Loan establishment or application fees.

Partner with a Local Expert: Ferns Finance Brokers

Navigating the commercial lending landscape—especially with its higher deposits and complex loan types—requires a local expert. At Ferns Finance Brokers, we serve the Logan, Beenleigh, Tamborine, and Gold Coast communities, giving us a deep understanding of local property values and lender preferences for this region.

We can assess your unique situation, whether you are:

• A self-employed business owner needing a Low Doc option.

• A property investor looking to leverage an SMSF.

• A seasoned developer seeking the best Standard Commercial terms.

Our goal is to connect you with the right lender and loan structure to ensure your commercial investment is financially sound and helps you achieve your business or wealth-building goals.

Ready to discuss your commercial property finance?

Contact Ferns Finance Brokers today for a no-obligation consultation on your commercial property finance options. Let us help you find the best loan to secure your next asset in Logan and the surrounding areas.

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