Lease doc or full doc — the right question depends on your tax return.

A lease doc loan is a commercial property loan assessed primarily on the income generated by the lease attached to the security property. The lender looks at the lease — tenant covenant, rental amount, term remaining — and forms a view on whether the property can service the loan from its own rental income. The borrower's personal financial position is examined in less depth than a full doc loan. The headline benefits are speed and simplicity. A lease doc application is typically settled in three to five weeks where a full doc application might run six to ten. The documentation burden is lighter — typically the lease itself, the property valuation, evidence of the borrower's identity and entity structure, and a basic financial position statement. Two years of tax returns and current BAS data are not usually required. The trade-off is in pricing. Lease doc rates sit 50 to 150 basis points above equivalent full doc rates on the same security. Indicative — varies by lender, property type and tenant covenant. The premium is the lender's compensation for assessing the loan with less information about the borrower's personal position.

Three borrower profiles where lease doc consistently makes sense. First — a property investor with multiple commercial holdings whose group financials are complex. The full doc process for an investor with three trading entities, four trusts and a holding company is an exercise in documentation gymnastics. Lease doc, assessed primarily on the income of the specific property being acquired, is faster and cleaner — and the rate premium is worth the avoided complexity. Second — a self-employed borrower with two recent strong years that haven't yet been finalised through tax returns. The borrower has the income capacity. They just don't have the paperwork the full doc process demands. Lease doc lets them transact now and refinance to full doc in 12 to 24 months once the returns catch up. The interim cost is real but the alternative is missing the property. Third — an investor buying a stable, fully-leased property with a strong tenant covenant. The income on the property is the primary asset; the lender's risk is genuinely tied to that lease performing. Lease doc is structurally the right assessment frame for that loan. The premium is appropriate because the lender is taking the lease at face value and is exposed to vacancy or tenant default. The borrower's personal position is, in fairness, secondary to the property's income.

Commercial property loans are routinely written to companies, trusts, or combinations of the two — but not by every lender. A meaningful slice of the panel won't lend to company or trust borrowers at all, so the shortlist narrows before pricing even starts, and knowing which lenders take which structures is part of the job. Getting the entity structure right at the start matters because changes after settlement are expensive and disruptive. Changing the borrowing entity means changing the owner on title, so every lender requires a full refinance to do it — and because it is a change of ownership it can trigger stamp duty, capital gains tax and other tax consequences. The right structure depends on the tax position of the borrower group, the intended use of the property, and the asset protection objectives. For an investment commercial property held by a small family group, a discretionary trust with a corporate trustee is the most common structure. The trust holds the property, the corporate trustee is the legal owner on the title, and rental income is distributed to beneficiaries each year at the trust's discretion. Personal guarantees from the directors are standard. The trust structure provides flexibility on income distribution and reasonable asset protection. For a small business buying its own premises, a related entity arrangement is common — a separate entity (often a unit trust or another company) owns the premises and leases it to the operating business. This is the textbook structure for the small-business-owner-buys-own-premises case. It works for the same reasons the SMSF version works: the property is in a separate vehicle from the operating business, rental income flows to the property-owning entity, and the operating business pays deductible rent. We work with the borrower's accountant on every commercial file to ensure the structure aligns with their tax position before lodgement.

Documentation requirements for commercial differ materially from residential. For a full doc commercial application, expect to provide two years of tax returns and financials for each borrowing entity (and any related operating entity), current management accounts where the financial year is more than three months stale, current BAS lodgements, ASIC company extracts for any corporate borrower, trust deed and any amending deeds for any trust borrower, and the lease (if income-producing) including any deeds of variation. The lender's solicitor will review the lease in detail; we usually engage with their query list within seven days of lodgement. For a lease doc application, the financial documentation is lighter but the lease scrutiny is heavier. The lender will want to see the lease, any deed of variation, the tenant's identity (and sometimes parent company guarantees), and evidence of recent rent payment. The valuation will be looked at carefully because the property's market value, combined with the lease income, is doing most of the credit assessment work. Commercial loans are not subject to the National Consumer Credit Protection Act in the same way residential loans are — the responsible lending obligations apply differently. That's why a commercial loan can be assessed on lease income alone. It doesn't mean the lender lends recklessly; it means the assessment frame is different and the borrower carries more of the responsibility for understanding the loan they're entering. ASIC's MoneySmart and APRA's prudential publications both have material on commercial lending if you want background.