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Cafe & restaurant owner · Western Sydney

Cafe & Restaurant Commercial Loan Sydney

By the Mortgagefy Team · Published 19 Oct 2026 · Last reviewed 19 Oct 2026

Hospitality operators carry fit-out costs most other businesses can't imagine — grease traps, exhaust canopies, cool rooms, alfresco approvals. Owning the premises you've fitted out stops you writing off that capital spend to a landlord every five years.

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General information only, not financial advice. Conditions apply.

How it works

Hospitality is specialised commercial. Most lenders accept it, but at lower LVR (60-70%) and tighter servicing requirements than vanilla retail. The specialisation reflects the volatility of hospitality margins and the high fit-out cost that doesn't walk with you.

The property attributes that matter: grease trap capacity and compliance, exhaust-canopy ducting to roof, cool-room floor fall and drainage, alfresco approvals from council (an unapproved alfresco area is worthless at settlement), liquor-licence status and transferability.

If the premises is already licensed and trading, the sale often structures as a 'going concern' transfer — covering goodwill, fit-out and property in one transaction. The property loan still only secures bricks and mortar; goodwill and fit-out are financed separately or paid as cash.

What commercial lenders actually look at

Specialised classification

Hospitality is specialised commercial. 60-70% LVR is the usual band for owner-occupiers.

Fit-out condition

Grease trap sized correctly, exhaust canopy certified, cool room working and compliant. Deferred maintenance can trigger a lower valuation.

Trading financials

Hospitality lenders want three years where possible, plus seasonality narrative. POS data, average spend and covers per day all strengthen a soft bottom line.

Alfresco & licensing

Council alfresco permit and liquor licence must be current and transferable. Unpermitted outdoor seating is not security.

Ways to hold the property

Structure sits between you, your accountant and your lender — tax, asset protection and succession all matter. Four common patterns we see with Western Sydney owner-occupiers:

Personal name

Simplest to arrange. Interest can be deductible against rental income. Little asset protection from a trading-business perspective.

Company

Common for long-term holdings inside a corporate group. Flat company tax rate on rent; no CGT discount at the company level.

Trust (discretionary or unit)

Flexible for distributing rental income and separating property from trading-business risk. Lenders are comfortable with clean trust documentation.

SMSF — leased back at market rent

An SMSF can borrow (via a Limited Recourse Borrowing Arrangement) to buy premises that meet the ATO's "business real property" test and lease them to your business at arm's-length market rent. High-level only — a licensed SMSF specialist and your accountant must confirm your situation.

This is general information only, not financial, tax or legal advice. Confirm your situation with a licensed credit adviser and accountant.

Who this suits

Established cafes and restaurants with 3+ years of trading history
Multi-site operators consolidating into owned flagship premises
Family businesses succession-planning for the next generation
Operators tired of landlord-controlled fit-out rules and refurb clauses
Hospitality owners with strong local brand and loyal catchment

Run your commercial numbers

Estimate repayments, LVR and deposit on a commercial purchase — owner-occupier or investment, full-doc or lease-doc — with our commercial property loan calculator. Paying rent now? Compare it against buying with the rent-vs-buy calculator.

Indicative only. Not a loan approval or borrowing-capacity assessment.

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Areas we cover across Western Sydney

Parramatta — Commercial strata offices and ground-floor retail around the CBD.

Lakemba — Strata retail and food-service tenancies along Haldon Street and Railway Parade.

Bankstown — High-street retail, mixed-use shopfronts and professional suites.

Cabramatta — Food precinct retail and small shopfronts along John Street.

Auburn — Mixed-use retail with strong food-service and specialty footprints.

Hurstville — Forest Road retail and strata shopfronts near the station.

Rockdale — Princes Highway shopfronts and small professional suites.

Fairfield — Suburban high-street retail with on-street parking and bus-route traffic.

Check your commercial loan options

Answer a few quick questions about the property and your business. Free, no obligation, takes under 3 minutes.

Frequently asked questions

Hospitality carries high fit-out cost that doesn't transfer with the lease, higher business failure rates in the industry, and specialised asset classification. Lenders discount for these factors with lower LVR and tighter servicing.

25-40% is typical for owner-occupier hospitality. Strong three-year trading figures and a well-established site push to the better end of the range.

Not through the property loan directly. Fit-out finance is a separate facility — equipment finance, chattel mortgage or a working capital line. Coordinated by your broker as one package.

A licensed premises with a transferable licence attracts a higher valuation than an unlicensed one. Confirm licence status, transferability conditions and any outstanding notices at due diligence.

Yes — the business, fit-out and property can transfer together. The property loan still only secures the land and building; goodwill and fit-out are paid in cash or financed separately. Your accountant will coordinate GST on the going-concern exemption.

Fit-out defects reduce valuation. Negotiate a price adjustment, require vendor rectification, or budget the capex into your cash flow modelling. Lenders won't fund rectification through the property loan.

Possible via LRBA if the property qualifies as business real property leased to your operating entity. Hospitality in SMSF carries extra scrutiny on structure and rent levels. Licensed SMSF specialist must confirm.

Also see: Gym & fitness · Hair & beauty salon · Retail shopfront · Lease-doc loans

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General information only. Conditions apply. Mortgagefy is Credit Rep 532656 under ACL 348324.