How commercial property deposits work

Commercial property deposits are typically higher than residential.

In most cases, lenders require:

  • a cash deposit
  • equity in other property
  • or a combination of both

The contribution is based on the loan-to-value ratio (LVR), which reflects how much risk the lender is willing to take.

Unlike residential lending, commercial LVRs are more sensitive to the asset, lease and borrower profile.

How lenders assess deposit requirements

Deposit requirements vary significantly between lenders and scenarios.

Typically, lenders will consider:

  • property type (office, warehouse, retail, specialised)
  • whether the property is owner-occupied or investment
  • lease strength and tenant quality
  • location and marketability of the asset
  • borrower financial position and experience
  • overall deal risk and structure

As a general guide:

  • stronger assets with solid leases may achieve higher LVRs
  • specialised or higher-risk properties often require larger deposits
  • vacant properties typically require lower LVRs
  • new or complex scenarios may reduce lender appetite

Two lenders can assess the same deal and require very different deposits.

Common challenges with commercial property deposits

Deposit requirements often create friction when not understood upfront.

Common issues include:

  • underestimating how much deposit is required
  • assuming residential-style lending terms apply
  • valuation coming in below purchase price
  • lender reducing LVR due to property or lease risk
  • limited usable equity across existing assets
  • applying with lenders that do not suit the deal profile

In many cases, deals fall over not because they are unworkable – but because expectations were set incorrectly.

How we structure deposit requirements at Evolve

We assess deposit strategy before any application is submitted.

This typically involves:

  • reviewing your available cash and equity position
  • assessing the target property and its risk profile
  • identifying lenders aligned with the deal
  • structuring the loan to optimise LVR where appropriate
  • exploring ways to strengthen the application (lease, structure, positioning)
  • aligning expectations around realistic deposit requirements
  • avoiding last-minute shortfalls or declined applications

The goal is to structure the deal so the deposit requirement is clear, achievable and aligned with the right lender.

Speak with a broker before committing to a purchase

Deposit requirements can shift depending on how the deal is structured and which lender is used.

Before committing, it’s worth understanding:

  • how much deposit you are likely to need
  • whether equity can be used instead of cash
  • which lenders are best suited to the property
  • how to position the deal for the strongest outcome

A clear strategy upfront can prevent delays, funding gaps or missed opportunities.

Speak with Evolve Lending & Finance to review your structure and next steps.