Comparison
Bank vs Non-Bank Commercial Loans
The cheapest commercial loan in Australia is almost always at a major bank. The most reliable settlement, the highest LVR and the only credit-flexible offer of substance is almost always at a specialist non-bank. Here is how the two lanes actually compare — without the marketing.
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The 2026 commercial lending market in one paragraph
Australian banks (CBA, NAB, ANZ, Westpac plus Macquarie, BOQ, Suncorp, Bendigo, Bankwest) hold roughly 78% of commercial property loan stock. Specialist non-banks (Pepper, Liberty, Thinktank, La Trobe, RedZed, Brighten, Bizcap, Assetline, Mortgage House Commercial and 15+ others) write the marginal deal — anything banks decline on policy, anything that needs to settle in under three weeks, anything where the borrower's structure is the third trust they have used this year. Non-banks have grown commercial book at ~22% CAGR since 2022 as the majors have tightened credit on retail and tourism assets.
Why borrowers default to banks (and why that is wrong half the time)
Existing transactional banking, perceived security, and a rate sheet that visibly leads on price. None of those guarantee approval, and none survive a credit committee saying no on policy. By the time a bank declines a deal at week four, the property has gone unconditional with another buyer. A correctly run process tenders both lanes simultaneously from day one — and uses the cheaper offer if it lands, the non-bank offer as the safety net if it does not.
Bank vs Non-Bank
Side-by-side on the metrics commercial credit committees actually weigh.
| Attribute | Lowest headline rateBank | Speed + policy flexNon-Bank |
|---|---|---|
| Headline rate (full doc) | From ~6.5% p.a. | From ~7.25% p.a. |
| Max LVR (standard commercial) | 65–70% | 70–75% |
| Max LVR (specialised: pubs, childcare, service stations) | 50–60% | 65–70% |
| Settlement speed | 6–10 weeks typical | 5–15 business days |
| Low doc / alt doc | Effectively no | Yes — core product |
| Credit-impaired sponsor | Decline | Underwrite case by case |
| Loan term | 15–30 years | 3–25 years (often shorter) |
| Annual review / financials | Required annually | Often not required |
| Break costs | Can be material on fixed | Usually nil on variable |
| Best for | Strong sponsor, clean asset, time to wait | Time pressure, policy edge case, alt doc, transitional asset |
When the bank is the right answer
Strong, established trading entity with two clean tax years. Mainstream asset (CBD office, metro industrial, anchor-tenanted retail). LVR at or below 65%. Long-term hold thesis where 25–30 year amortisation matters. No deadline pressure on the contract — or a deadline four months out. In this scenario the major bank will price 75–125 bps inside the best non-bank offer, and that is genuinely the right loan.
When the non-bank is the right answer
Anything time-pressured — auction purchases, off-market deals with a 30-day settlement, refinances inside a maturing facility window. Anything with hair on the financials — low doc, lease doc, recent restructure, ATO arrears since cleared, prior credit event. Specialised assets the banks discount harshly — pubs, service stations, childcare, accommodation, large-format retail outside metros. Transitional assets that need 12–24 months to stabilise before refinancing back to a bank.
Lender appetite right now
There are 13 active commercial-grade banks in Australia and approximately 28 commercial non-bank lenders with cheque sizes above $1m. Non-bank capital is currently abundant — three new wholesale funders entered the senior commercial space in 2025 — and pricing is the tightest it has been in five years. The right strategy in 2026 is usually a bank-first tender with a parallel non-bank shadow process; we run both on every deal as standard.
Bank vs Non-Bank — FAQ
The questions sophisticated commercial borrowers ask when choosing between these two structures.