Buying Commercial Property for Your Business: What You Need to Know
For many business owners, rent is just part of the monthly overhead. But what if that rent could start contributing to your long-term wealth?
Purchasing commercial property for your own business use is a strategy more and more Kiwi business owners are exploring and for good reason. Not only can it reduce your exposure to rising lease costs, but it also gives you control, stability, and the chance to build an asset that supports your future.
At Vesta Finance & Advisory, we often help business owners navigate this process, and one of the most common questions we’re asked is: how do you fund a commercial property purchase?
Let’s break it down.
Why Consider Buying Commercial Property?
Buying your own commercial premises can be a smart long-term move, especially if:
· Your business has stable, reliable cashflow
· You’re planning to stay in the space for the medium to long term
· You want to build equity in an asset that you control
Instead of paying rent to a landlord, your business pays rent to a property you own (often through a separate entity, like a trust or company). That rent can help service the debt on the property, while building wealth in an asset that you keep, even after you sell the business.
How Does the Funding Work?
One of the most interesting parts of commercial property finance is how it can be structured, especially for established businesses with strong financials. In some cases, it’s possible to fund up to 100% of the purchase price by using both the commercial property and your business as security and keeping out your family home.
Here’s a typical structure:
65% secured against the commercial property – This is the standard lending ratio most banks will offer for a standalone commercial asset.
Up to 35% secured against the business – This portion may be unsecured or supported by existing business assets, such as equipment or strong retained earnings. This is often referred to as a cashflow lend.
This structure allows you to fund the purchase without needing to contribute a large cash deposit or personal home, provided your business can support the repayments and the overall borrowing stack fits the bank’s criteria.
Is This Strategy Right for You?
While the idea of owning your own premises is appealing, it won’t suit every business. Here are some things to consider:
It might be a good fit if:
Your business is well-established and profitable
You want to stay in your current location long-term
You’re looking for a wealth-building strategy outside your core business
It might not be the right time if:
You’re in high-growth mode and need to preserve borrowing capacity
Your business doesn’t have consistent profitability yet
You might need flexibility to relocate in the near future
What Happens When You Sell the Business?
One of the long-term advantages of this approach is flexibility. When it’s time to exit or sell your business, you don’t have to sell the building. You can keep the property and lease it to the new owner, or another tenant, creating an ongoing income stream for your future.
Want to Explore the Numbers?
At Vesta Finance & Advisory, we love helping business owners understand their options and make informed, strategic decisions.
We can:
Assess whether commercial ownership is right for your business
Help you structure the funding in a smart, sustainable way
Create a plan to get you “purchase ready,” even if you’re not there yet
Buying commercial property is a big step, but with the right advice, it could be one of the best financial moves your business makes.
Curious about whether it’s possible for you? Let’s chat.
Vesta Finance & Advisory works with ambitious professionals and business owners across New Zealand. We specialise in business lending, commercial finance, and long-term wealth strategies, always tailored to your goals.
A reminder, the above information is generic in nature and not personalised financial advice. If you would like to discuss the details of your own situation, please contact our team directly.