Commercial property lending rewards curious brokers

As interest in commercial property grows, Bluestone’s Richard Chesworth explains why brokers who uncover the full picture are best placed to turn opportunities into successful deals for their clients

A COMMERCIAL PROPERTY deal often starts with a simple question: what’s the loan-to-value ratio? However, unlike residential lending where many of the fundamentals are relatively familiar, commercial lending rewards brokers who dig deeper. Tenant details, lease terms and a sense of whether the building sits in a thriving strip or a street where every second shopfront is empty, can all play a significant role in shaping a lender’s appetite and the strength of an application. “Brokers will come to us and say, will you lend 75% on this property? I don’t know – you’ve only shared one aspect!” says Richard Chesworth, Bluestone Home Loans’ head of specialised distribution. “[Commercial] is not like a residential property, where you already know what it’s going to look like.” The gap between what brokers assume and what lenders need to know is one logjam in how commercial lending is playing out across Australia right now as growing numbers of investors and business owners look past residential property and into a market with sharper edges and bigger rewards.

Bluestone Home Loans has been helping brokers find a way forward for over 25 years. As one of Australia’s leading non-bank lenders, we specialise in supporting self-employed clients, those with complex income, and borrowers who might not fit the traditional mould. We look beyond the obvious, working closely with brokers to uncover solutions that help more clients move forward. Our approach is simple, flexible and built on strong relationships. It’s about backing your expertise with a team that’s ready to dig deeper, move faster and help you grow. Helping you turn more scenarios into settled deals is a Bluestone thing.

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“The commercial property has a lot greater chance of washing its own face, of taking care of itself with the rental income”

Richard Chesworth, Bluestone Home Loans

The story decides the deal Ask Chesworth what separates a commercial application that clears credit quickly from one that stalls, and the answer has nothing to do with spreadsheets. “It’s the story. Brokers need to be curious, to understand the customer and just keep asking, delving and asking questions to understand their full situation,” he says. Broker notes carry more weight in commercial lending than many brokers realise, because a thin file forces the credit team to fill in the blanks themselves. “Give us the information to help, because if the broker doesn’t give us the information, we’re going to make the assumptions. And it’s not sales making those assumptions, it’s the credit people,” Chesworth says.

Interest is rising, but understanding lags behind it Following the ban on new limited recourse borrowing arrangements (LRBAs) for residential property, Bluestone has noticed a shift among its customer base as buyers who once assumed they would move into another residential purchase are instead pausing to consider commercial property. “We are already having feedback, particularly in the SMSF space, of people who were going to go down resi and are now looking at commercial,” Chesworth says. “The shift is happening, but these things take time.”

Residential vacancy rates are tight enough that filling an investment property with a tenant is rarely the hard part. Commercial works differently, and buyers moving across from residential need to reframe how they think about a purchase before they make one. “If it is investment, has it got a tenant in there already?” Chesworth asks. “Or do I need to find a tenant? What incentives do I have to put out there to engage a tenant to be in the property?” Add the cost of carrying a loan on an empty building and the GST payable on a purchase that isn’t a going concern, and a commercial deal starts to look like a different exercise altogether from buying a house. “It is a timing issue,” Chesworth explains. “The discussions [following the LRBA ban] have certainly lifted commercial or non-residential property, but I think people are still gaining an understanding because it’s not just apples for apples.” Media coverage has occasionally run ahead of the data, with reports of a rush of broker interest into commercial property following the budget changes. Chesworth is wary of reading too much into headlines built on sentiment rather than settled figures. “I would never oversensationalise a market for the sake of sensationalising it,” he says. What the shift does offer, once a buyer understands the mechanics, is a different financial position from the negatively geared residential investments many Australians are used to. Commercial assets, structured well, can behave differently on the balance sheet. “The commercial property has a lot greater chance of washing its own face, of taking care of itself with the rental income,” Chesworth says.

The opportunity brokers are leaving on the table For all the reported fresh interest, Chesworth still sees a persistent reluctance on the other side of the desk as far as non-banks are concerned. A large volume of commercial lending still goes straight to the banks, bypassing brokers altogether, and he puts that down to a skills gap rather than a lack of demand. “The brokers have got to upskill as well, because there’s still such a volume of commercial that goes to banks,” he says. Client needs do not stand still, and a broker who only ever offers residential products risks being outgrown by the very customers who built their book.

“The conversation in the commercial world isn’t about price, it’s about value. What am I achieving through this transaction?”

“The missed opportunities are with brokers who are wary of stepping into new territory,” Chesworth says. “We’ve all got customers, and our customers’ needs are growing. We’ve got to grow with those needs. If a broker doesn’t grow with their customers, they’re going to lose their customers and become irrelevant,” he says. Nowhere is that knowledge gap clearer than in SMSFs, where Chesworth draws a sharp distinction between residential and commercial property. “[For a broker and an SMSF,] residential SMSF lending is nice to have, whereas commercial SMSF lending is a must-have,” he says. The logic traces back to how compulsory super interacts with small business ownership. A business owner’s super fund can acquire the commercial premises their business operates from, provided the arrangement is properly advised and structured on commercial terms. “Mortgage brokers shouldn’t be advising people, ‘Go and buy this property or that property’,” Chesworth says. “It’s about working with the customer and their other providers, their accountant and their financial adviser, to establish whether an SMSF is suitable.” Once that advice confirms the structure works, the payoff is a business owner redirecting money that would otherwise go to a landlord into their own retirement savings. “Rather than paying rent to a landlord, the client is now paying rent on arm’s-length commercial terms to their own super fund,” Chesworth explains. “As well as the contributions, the rent is going in there and that’s helping build retirement assets.” Why non-banks are winning ground as banks pull back Banks retain a strong presence in commercial and SME lending, but Chesworth is seeing them retreat from certain segments, and non-banks like Bluestone are positioned to fill the space. The pitch is not about beating the banks on rate. “The conversation in the commercial world isn’t about price, it’s about value. What am I achieving through this transaction?” Chesworth says. Timing is often the deciding factor. A business with a live opportunity in front of it cannot always wait for a bank to work through a full financial assessment, particularly if the latest set of accounts isn’t ready yet. “Through Bluestone, we can do the alt-doc process, whether that be BAS statements or accountant’s letters, providing an approval now, so the client won’t miss that opportunity,” Chesworth says. The same flexibility extends to clients with a patchy credit history or a newly established ABN, groups that banks are typically reluctant to lend to. Chesworth also points to accreditation as another point of friction between brokers and the banks, one that non-banks are deliberately avoiding.

“If you’re accredited with Bluestone, you’re accredited to all our offers. We don’t want to use accreditation as a barrier to do business,” he says. For residential brokers trying to break into commercial lending, that open accreditation solves a problem that banks routinely create for newcomers. “A broker will go to a bank and say, ‘I want to be accredited for commercial,’ and the bank will say, ‘We’re not going to accredit you until we see what experience you have in the commercial space’,” Chesworth says.

Published 26 Oct 2026

Brokers writing commercial, business or asset finance

What could complicate the next 12 months Looking towards 2027, Chesworth’s main concern is less about appetite than affordability. Rising funding costs are putting pressure on how comfortably a commercial loan can be serviced, and that pressure plays out differently depending on the industry behind the deal. “It comes down to servicing capacity. We’re in a rising interest rate environment, so the cost of funds is going up, and it comes back to what industry the customer is in, and whether it’s an investment or for their business,” Chesworth says. For brokers moving into commercial property for the first time, that leaves a clear takeaway. The numbers on an application matter, but just as important is the story behind them. The brokers who take the time to ask the next question are the ones building a business that are more likely to be able to absorb whatever the next year brings.

Inflation remains a concern

Source: ABS Consumer Price Index, Aug 2026

Change from previous month

Annual change

He points to a regional South Australian deal as an example of what a well-built case can achieve. A business wanted to borrow against a commercial property in a non-metro area, the kind of application that might be knocked back at first glance. The broker had done the groundwork, establishing that one fund member ran the business and another was an accountant who understood the fund and the local market. “The broker asked a lot of questions and could really build a case,” Chesworth says. “That’s how you build the story and, in this case, have an understanding of the two fund members and the roles they play, which really helps build out potential contingencies that could easily be overcome. Plus, if the lease is structured the right way, the asset is going to wash its own face.” The same principle explains why location alone can’t answer a lending question. A rundown block on a struggling strip and a building on a street primed for renewal can look similar on paper but carry very different risks. “You look back at Oxford Street, Paddington, when Westfield Bondi opened and those shops really struggled. Now they’ve all come back to life. It’s understanding the dynamics there,” Chesworth says.

12,000

10,000

8,000

6,000

4,000

2,000

2024

2025

53.3%

51.9%

11,785

11,084

Richard Chesworth, Bluestone Home Loans

Feb 2026

Mar 2026

Apr 2026

May 2026

Jun 2026

Jul 2026

Aug 2026

-1

1.1

0.4

-0.7

-0.1

0.4

3.7

4.6

4.2

3.8

3.5

2024

2025

Number of brokers

Proportion of total

Source: MFAA State of Mortgage & Finance Broking Report 2026

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