Lease Doc Loans Explained: Finance Your Commercial Property with Minimal Paperwork

What Is a Lease Doc Loan in Australia?

A Lease Documentation Loan (Lease Doc Loan) is a smart financing solution for investors who want to buy or refinance commercial property — without the hassle of submitting personal tax returns or business financials.

Instead of judging your income, lenders focus on the income generated by your tenant. If you’ve got a solid lease with a reliable tenant, you could qualify — even if you’re self-employed, in a trust, or buying your own business premises.

This makes Lease Doc Loans ideal for:

1. ✅ Self-employed individuals with complex business structures
2. ✅ Trusts and passive commercial investors
3. ✅ Commercial tenants looking to purchase their leased space
4. ✅ Investors seeking fast, low-documentation approvals

How Lease Documentation Loans Work for Commercial Investors

Lease Doc Loans shift the focus from borrower income to property income. Lenders assess:

1. The remaining term of your lease (minimum 12 months)
2. The strength of your tenant (e.g., Coles, Bunnings, government)
3. The stability of rental income
4. The type of lease (gross, net, or triple net)

No BAS statements. No tax returns. No profit & loss reports.

Just a clean lease agreement and predictable rent.

Who Qualifies for a Lease Doc Loan?

You could qualify if:

1. You own or are buying a commercial property (office, retail, industrial)
2. Your tenant has at least 12 months remaining on their lease
3. Your rental income comfortably covers the loan interest (ICR ≥ 1.2x)
4. You can provide a copy of the lease agreement and tenant details

Key Features of Lease Doc Finance in 2025

Lease-Based Assessment: Why Tenant Income Matters More Than Yours

Unlike residential loans, Lease Doc Loans don’t care how much you earn — they care how much your tenant pays.

Lenders look for:

1. Long-term leases (3+ years preferred)
2. Creditworthy tenants (national brands, essential services)
3. Fixed or CPI-linked rent reviews (predictable income)

The stronger your lease, the better your loan terms.

Minimal Documentation Advantage

Forget stacks of paperwork. With a Lease Doc Loan, you typically only need:

1. Copy of the lease agreement
2. Tenant name and contact
3. Property details
4. Your ID and entity documents (if applicable)

No 2 years of tax returns. No BAS. No financial statements.

Interest Cover Ratio (ICR): The 1.2x Rule Explained

This is the golden rule:

Your annual rent must be at least 1.2 times the annual interest on the loan.

Example:

1. Loan: $500,000 at 5.39% p.a.
2. Annual interest: $500,000 × 5.39% = $26,950
3. Required rent: $26,950 × 1.2 = $32,340
4. Your actual rent: $35,000

✅ ICR = 1.3x → You qualify!

👉 Use our Lease Doc Loan Calculator to test your numbers in seconds.

Maximum LVR: How Much Can You Borrow?

Lenders use Loan-to-Value Ratio (LVR) to determine your borrowing power.

Major Banks

Up to 65%

Non-Bank & Specialist Lenders

Up to 75% (under $3M), 70% above

💡 Higher LVRs possible with:

1. AAA tenants
2. Long leases
3. Triple net leases (tenant pays all outgoings)

Loan Terms & Interest-Only Options That Match Your Lease

1. Loan term: Typically matches the remaining lease term
2. Interest-only periods: Commonly 1–5 years
3. Renewal rollover: If tenant renews, many lenders will extend your loan
4. Fixed or variable rates: Both options available

This flexibility helps you align repayments with your income cycle.

Real Example: How a $500k Lease Doc Loan Works

Let’s say you’re buying a retail shop for $750,000 with:

1. Deposit: $250,000 (25%)
2. Loan: $500,000
3. Tenant: National pharmacy chain
4. Lease: 7 years remaining
5. Rent: $35,000/year

Lender checks:

1. ICR: $35,000 ÷ $26,950 = 1.3x → ✅ Pass
2. LVR: $500,000 ÷ $750,000 = 66.7% → ✅ Within limit
3. Lease term: 7 years → ✅ Eligible

✅ Approval in 7–10 days — no financials required.

Eligible Properties for Lease Doc Loans

Offices, Retail, Industrial – What’s Covered?

Lease Doc Loans work for:

1. 🏢 Office buildings (single or multi-tenant)
2. 🛍 Retail spaces (shops, shopping centers)
3. 🏭 Light industrial (warehouses, workshops)
4. 🏘 Mixed-use (if commercial portion dominates)

🚫 Not eligible: Residential-only, vacant land, development sites.

Lease Terms & Loan Structuring: How Long Can You Borrow For?

Can You Extend the Loan When the Lease Renews?

Yes! Many lenders allow:

1. Loan term extension when the tenant exercises a renewal option
2. Rollover financing to match the new lease term
3. No full re-application — just updated lease docs

This gives long-term investors serious flexibility.

Who Benefits Most from Lease Doc Loans?

Self-Employed? In a Trust? This Loan Is for You

Perfect for:

1. 🚀 Self-employed professionals (doctors, tradies, consultants)
2. 🏦 Trusts investing in commercial property
3. 🏢 Owner-occupiers buying their business premises
4. 💼 Passive investors seeking low-hassle, income-producing assets

If your income is hard to prove but your tenant pays on time — this loan is built for you.

Are Lease Doc Loans More Expensive?

Interest Rates, Lender Fees, and Trade-Offs

✅ Pros:

1. Faster approval
2. Less paperwork
3. Higher LVR options (with right tenant)
4. Flexible terms

⚠️ Cons:

1. Slightly higher interest rates (0.2–0.5% above full-doc)
2. Stricter lease quality requirements
3. Lender-specific rules (comparison is key)

💡 Tip: The time and stress saved often outweigh the small rate difference.

Common Mistakes to Avoid with Lease Doc Applications

Why Lease Quality Matters More Than You Think

❌ Assuming any lease qualifies

→ A 12-month lease with a startup ≠ a 10-year lease with Coles

❌ Ignoring rent review clauses

→ Market reviews could reduce income — lenders factor this in

❌ Not checking make-good obligations

→ You may owe thousands at lease end

❌ Focusing only on LVR

→ A 75% LVR with a 3-year term may not be better than 65% at 10 years

✅ Always compare lenders — criteria vary widely.

Ready to Get Started with Your Lease Doc Loan?

Use Our Free Calculator to Check Eligibility

👉 Calculate Your Eligibility Now

Enter your loan amount, interest rate, and rent — see your ICR and LVR in seconds.

Got Questions? Visit Our FAQ Section

📘 Explore the FAQ

Find answers on:

1. Lease requirements
2. LVR rules
3. ICR calculations
4. Lender comparisons