Usual source
Equity in home or investment property
Big purchases
Funding the deposit on your own commercial premises
How Australian business owners fund a commercial property deposit: using home equity, what lenders assess and costs like stamp duty to budget for upfront.
Big purchases
The short answer
Buying your own premises is a milestone. No more rent reviews, no landlord deciding your future, and the rent you used to pay starts building equity instead. The hurdle is usually the deposit: commercial lenders typically want more upfront than home lenders, and stamp duty sits on top. Many owners bridge that gap with equity in property they already own.
Most commercial property lenders need a larger deposit than for a home, and many business owners fund it by borrowing against equity in their home or another property. A property-backed business loan from $20,000 to $5,000,000 can cover the deposit and upfront costs like stamp duty, while a separate commercial loan funds the rest of the price. The key questions are whether the business can carry rent-equivalent repayments, and what happens to both properties if things go wrong.
At a glance
The essentials
The points that decide whether this suits your business.
Secured range
$20,000 to $5,000,000
Budget for
Stamp duty, legal, building and pest, valuation
Key points
- Commercial lenders usually expect a bigger deposit than home lenders.
- Equity in your home or another property is the most common source.
- Stamp duty and other upfront costs can add a large sum to the deposit.
- Both properties are on the line, so the numbers need real headroom.
How do business owners usually fund the deposit?
Equity in your home: How it works Top up the home loan or add a second mortgage; Watch out for Your home is now backing the business premises
Equity in an investment property: How it works Same idea, using a property you don't live in; Watch out for Rental income still needs to cover its own loan
Business savings: How it works Retained profits held for the purchase; Watch out for Don't leave the business without a buffer
A partner or investor: How it works Shared ownership of the property; Watch out for Clear agreements from day one
Vendor terms: How it works Seller accepts part of the price later; Watch out for Less common in commercial property
A property-backed business loan from $20,000 to $5,000,000 can cover the deposit and upfront costs. The commercial property loan itself, for the rest of the price, is usually a separate facility with a commercial lender.
What does the full upfront cost look like?
The deposit is only one part. Budget for:
- The deposit your commercial lender requires.
- Stamp duty, set by your state or territory revenue office.
- Legal and conveyancing fees.
- Building, pest and any environmental inspections.
- Valuation and loan establishment costs.
- GST treatment. Some commercial purchases involve GST; your accountant should check.
- Any fit-out or repairs before you can move in; see fit-out finance.
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Can the business afford to own?
Owning swaps rent for loan repayments, rates, insurance, maintenance and the cost of the money tied up in the deposit. A simple test:
If ownership costs a lot more than rent each month, the long-term equity gain needs to be worth the short-term squeeze.
Illustrative example. A Mackay engineering workshop pays about $6,500 a month rent on a shed it has occupied for nine years. The owner offers to sell for $1.15 million. The commercial lender requires a substantial deposit, and stamp duty and costs add a significant sum on top. The workshop's owners use a second mortgage over their home to fund the deposit and costs, and the commercial loan covers the rest. Their accountant models the combined repayments at a little above current rent, which they're comfortable with given the security of owning the site their heavy equipment is bolted into.
- Add the commercial loan repayment, the repayment on the equity loan used for the deposit, rates, insurance and a maintenance allowance.
- Compare that total with the rent you pay now.
- Check the business can carry it in a slow year, not just a good one.
Who should own the premises?
Many business owners hold premises in a separate entity, often a family trust or a self-managed super fund, which then leases the property to the operating business. This can separate the property from business risk and has tax implications either way. Get advice from your accountant and lawyer before you sign, because changing the owner later can trigger stamp duty again.
What are the risks?
None of these are reasons not to buy. They're reasons to buy with headroom.
- Two properties exposed. If the business struggles, both the premises and the property backing the deposit are at risk.
- Concentration. Your business, your premises and possibly your home all depend on one income.
- Less flexibility. Moving or downsizing is harder when you own.
Should you buy the premises or invest in the business instead?
It's worth pausing on the opportunity cost. The deposit and costs for premises can be a very large sum. Ask what that money, or that borrowing capacity, would do if it went into the business instead:
For some businesses, owning the premises is the best investment available, particularly when the site is specialised, hard to replace or under threat from a landlord who wants to redevelop. For others, the business itself earns a higher return than property ever would, and renting keeps that capital working where it earns most.
Your accountant can help you compare the two paths over five or ten years. A good comparison includes the equity you'd build, the return the business earns on new investment, tax effects and how each option affects your ability to borrow later.
- New equipment that lifts output.
- A second location or a new product line.
- Stock to support faster growth.
- A buffer that lets you ride out a slow year without stress.
Ready to stop paying rent?
If owning your premises makes sense for your business, let's work out how to fund the deposit. Asking us doesn't involve a credit check; that only happens once you choose to go ahead. We don't fire your enquiry off to a list of lenders. A real person looks at your equity, the property and the business, and calls you with options.
Please be accurate about the purchase price, the property you'd borrow against and what's owing on it. That way the first structure we suggest can actually work. Start your premises deposit enquiry.
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Common questions
Funding the deposit on your own commercial premises FAQs
How much deposit do I need for a commercial property?
Commercial lenders generally expect a larger share of the price as deposit than residential lenders, and the exact amount depends on the property type, location, lease position and lender. Ask your commercial lender early so you know the target before you start looking.
Can I use equity in my home for the deposit?
Yes, it's the most common approach. A loan secured against your home, either by increasing the home loan or with a second mortgage, provides the deposit, and a separate commercial loan funds the balance.
Should my business buy its premises or keep renting?
Owning gives security of tenure and builds equity, but ties up capital and concentrates risk. Renting keeps cash free for the business. It often comes down to how long you'll stay, how specialised the premises are and what else the money could do.
Who should own the property?
Many owners hold the property in a separate entity, such as a trust or self-managed super fund, which leases it to the business. Structure affects tax, asset protection and borrowing, so get accounting and legal advice first.
What upfront costs should I budget for?
Stamp duty set by your state revenue office, legal fees, building and pest inspections, valuation, loan establishment costs and any GST treatment on the purchase. They can add a significant amount on top of the deposit.
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Last reviewed: 28 October 2026
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