Comparison
Lease Doc vs Full Doc Commercial Loans
For investment commercial property with a credible tenant, the lease itself can carry the loan — no borrower tax returns required. Here is how lease doc and full doc compare on the metrics that actually drive an investment commercial decision.
200+ lenders
On panel
25+ years
In commercial finance
ACL 502091
Australian Credit Licence
ABN 91 135 045 340
Registered broker
Two different underwriting questions
Full doc asks: can the borrower service this debt from declared income? Lease doc asks: does the in-place lease — net of outgoings, vacancy and capex reserve — cover principal and interest by a defined coverage ratio (typically 1.20x to 1.50x ICR)? They are different products solving for different deals. A retired professional buying a leased childcare centre in a passive investment trust has no income to declare; the deal lives or dies on lease doc. A trading entity buying its own warehouse from cashflow does the opposite.
Who actually uses lease doc
Self-managed super funds, family investment trusts, holding companies with no trading income, foreign-resident investors, retired sponsors, and any structure where presenting borrower income is either impossible or commercially undesirable. The product is also widely used by sophisticated investors who simply prefer not to commingle personal tax data with each new SPV.
Lease Doc vs Full Doc
Side-by-side on the metrics commercial credit committees actually weigh.
| Attribute | Lease pays the loanLease Doc | Borrower pays the loanFull Doc |
|---|---|---|
| Primary serviceability test | Lease income vs P&I (ICR 1.20–1.50x) | Borrower NPBT vs P&I |
| Borrower income evidence | Not required | 2 years tax returns + ATO + BAS |
| Headline rate | From ~7.25% p.a. | From ~6.5% p.a. |
| Max LVR | 65–70% | 65–75% |
| Min remaining lease term (WALE) | 2–3 years typical, 5+ preferred | Not applicable in same way |
| Tenant covenant requirement | Must be acceptable — ASX listed, government, national franchise, established SME | Less critical (borrower carries) |
| Approval timeline | 7–15 business days | 3–6 weeks |
| Loan term | 15–25 years | Up to 25–30 years |
| Best for | Passive investors, SMSFs, trusts holding leased commercial | Trading entities with strong financials |
When lease doc is the right structure
Passive investment commercial held in an entity with no independent income. Tenant is national, government, ASX-listed, established franchise, or a multi-year SME with on-time payment history. WALE is at least two years (five preferred). ICR comes out at 1.30x or better after outgoings and vacancy allowance. SMSF acquisitions under LRBA almost always run on lease doc — the fund's contributions and rent are the only serviceability the lender will consider.
When full doc beats lease doc
Owner-occupied commercial — the borrower is the tenant, so lease doc is incoherent. Short WALE (under 18 months) with renewal uncertainty. Weak or unrated tenant. Higher LVR ambitions (above 70%). Or simply a trading entity with clean financials and a desire to access the lowest priced full doc market — the ~75 bps lease doc premium is meaningful at scale.
Lender appetite right now
Lease doc commercial is now offered by roughly 18 lenders in Australia — three second-tier banks, the rest non-bank. The market deepened materially in 2024–2025 as institutional warehouse capital chased credit-tenant paper. Pricing on a 1.40x ICR deal with an ASX-listed tenant and 7-year WALE can come within 25 bps of the equivalent full doc rate; on a 1.20x ICR deal with an SME tenant and 3-year WALE the spread can be 150 bps. Tenant covenant and WALE drive the pricing, not the borrower.
Lease Doc vs Full Doc — FAQ
The questions sophisticated commercial borrowers ask when choosing between these two structures.