Commercial finance explained

Commercial vs residential lending: what actually changes for a broker

The relationship skills transfer completely. The assessment logic does not — and that is the whole of the learning curve for a residential broker writing their first commercial deal.

Last updated: 25 August 2026

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The short version

Residential lending is a highly standardised assessment of a household's capacity against a property that is easy to value. Commercial lending is a bespoke assessment of an income stream against an asset whose value depends on that income.

Almost everything that feels unfamiliar follows from that. The documents are heavier because the income is more complex. The terms are shorter because the security needs reassessing. The valuations are less predictable because they are derived rather than compared.

The differences that catch people out

What is assessed

Not a payslip and a household budget, but the property's net income or a trading entity's adjusted earnings, tested for coverage rather than surplus.

The loan does not run to term the same way

A facility with a review date rather than a thirty-year contract. The refinance decision arrives on the lender's schedule.

Consumer protections do not apply the same way

Most commercial and business lending sits outside the consumer credit regime, which changes the disclosure landscape and the borrower's remedies.

Valuation is a bigger variable

Derived from income and a capitalisation rate, so it moves more and can reshape a deal after approval — see commercial valuations.

Security is a stack, not a mortgage

General security agreements, guarantees, priority arrangements. Covered in security and guarantees.

Placement is a skill, not a lookup

There is no comparison table. Which lender takes which file is judgement, and it is where the value sits — see who lends to Australian businesses.

What transfers, and what has to be learned

The good news is that most of what makes a good residential broker good also works commercially.

Transfers: the client conversation. Establishing what someone actually needs rather than what they asked for is the same skill, and commercial borrowers are worse at self-diagnosing than residential ones.
Transfers: file discipline. Complete submissions get assessed; incomplete ones queue. If anything this matters more, because commercial assessors have more to read.
Transfers: managing expectations. More valuable here, because commercial timelines and valuations both move.
To learn: reading a lease. Term, options, outgoings, review mechanism, covenant — see lease covenants and WALE.
To learn: entity structures. Trusts, corporate trustees, related-party arrangements and who has to guarantee — see lending to trusts and companies.
To learn: earnings analysis. Add-backs, normalisation, reading a trading account for conduct — see how serviceability is assessed.

None of it is difficult. It is unfamiliar, and the first two or three deals take much longer than the ones after.

Where the first deals usually come from

Most brokers do not start commercial by finding a commercial client. They start when an existing residential client mentions the business — premises they rent and could buy, equipment they need, a tax position, a facility their bank has repriced. The relationship already exists and the trust is already there.

Which is why the practical first step is usually not accreditation or training but asking. A residential book contains business owners, and few of them have been asked what their business needs. The crossover angle is covered from the lead side in leads for mortgage brokers who write commercial.

It is also worth being realistic about volume. Commercial deals are fewer, longer and larger, and the pipeline behaves differently to a residential one. Judging early commercial activity on residential timelines is the most common reason brokers conclude it is not working before it has had time to.

Where La Vitesse fits

We are commercial finance lead generation specialists. Our business loan, asset finance and commercial finance enquiries suit commercial brokers and mortgage brokers who also write commercial.

We do run a small amount of mortgage work, limited to refinance and debt-consolidation enquiries — see mortgage leads. Every lead is sold once, to one broker, never resold, delivered in real time. Pay per lead, no lock-in contracts, no setup fees. The lead is an introduction, not a recommendation.

Common questions

Do I need separate accreditation to write commercial?

Lender accreditations differ from residential ones and requirements vary by lender and aggregator, so it is a question for your aggregator rather than a general rule. Many brokers start through their existing group's commercial support before adding direct accreditations.

Is commercial lending more profitable per deal?

Deals are typically larger and the work per deal is greater, so it is not automatically better on an hourly basis. What changes the economics is repeat business — a commercial client with an active business tends to need something again, which residential clients often do not for years.

What is the hardest part of the transition?

Placement. There is no rate table that tells you which lender will take a particular file, so the first deals involve more calls and more dead ends. It improves quickly once you have used a panel a few times and know how each lender reads a story.

Can I keep writing residential at the same time?

Most brokers do, and the two feed each other — the residential book supplies the commercial enquiries, and commercial clients have homes. The risk is treating commercial as something to do when residential is quiet, which is not enough attention to build competence.

Which of your lead types suits a mortgage broker starting out in commercial?

Business loan enquiries are usually the gentlest entry: smaller, faster, and closer to a conversation a broker already knows how to have. Commercial property deals are the bigger prize and the steeper learning curve.