If you run a business in Singapore and you’re tired of paying rent into someone else’s pocket, buying your own commercial or industrial unit is one of the smartest long-term moves you can make. The same goes for investors who want a tangible, income-producing asset. But commercial property financing works very differently from a residential home loan — the loan-to-value is different, the way banks assess you is different, and the way you structure the purchase can be the difference between an approval and a rejection.

I’m Gary, founder of Addquity Consultancy. I spent 8 years inside the banking world specialising in commercial and industrial property mortgages before going independent. This guide is written from that side of the desk — what bankers actually look at, where deals fall apart, and how the strongest applications are put together. Consider it the conversation I’d have with you over kopi before you ever submit a single document.

How much can you borrow? Loan-to-value (LTV) explained

Loan-to-value is the percentage of the property’s price (or valuation, whichever is lower) that the bank will lend you. The rest is your cash and/or CPF down payment. For commercial and industrial property in Singapore, the LTV you qualify for depends heavily on who is buying — and this is where most first-time buyers get surprised.

That 10% gap is significant. On a $2 million unit, the difference between 90% and 80% LTV is $200,000 in additional cash you’d need upfront. So the buyer structure isn’t just paperwork — it directly affects how much cash leaves your pocket on day one.

Current commercial property loan rates in 2026

As of early 2026, indicative commercial and industrial property loan rates sit in the region of 1.5% to 1.6% fixed for the first 2 years, before reverting to a floating rate pegged to a reference benchmark. These are guideline figures — your actual rate depends on the bank, the property, your loan quantum, and your overall profile.

Loan tenure: how long can you stretch it?

A longer tenure means lower monthly instalments, which helps cashflow. For commercial and industrial property loans in Singapore, the maximum tenure is generally up to 30 years — but two caps apply, and whichever is shorter wins:

Cap 1: Age of the youngest guarantor

The loan tenure is typically capped so that it ends by the time the youngest guarantor reaches age 70. So if your youngest guarantor is 50, your maximum tenure would be around 20 years — not the full 30.

Cap 2: Remaining leasehold

For leasehold properties, tenure is generally capped at the balance lease less 5 years. A unit with 40 years of lease remaining would cap the loan at around 35 years — though the 30-year ceiling still applies on top of that.

The structuring most borrowers never hear about: DSCR vs TDSR

This is the part that separates a smooth approval from a frustrating rejection — and it’s the question I get asked about most. To understand it, you need to know the two different ways a bank can assess your loan.

DSCR — the business cashflow test

When an operating company buys a commercial unit, the bank often assesses it using DSCR (Debt Service Coverage Ratio) — essentially, does the business generate enough cashflow to comfortably cover the loan repayments? This is great when your business has strong, clean, well-documented financials. But if your DSCR falls short of the bank’s threshold — perhaps your company reinvests profits, runs lean on paper, or has lumpy revenue — the application can stall, even if you personally have plenty of resources.

TDSR — the individual income test

When an investment holding company buys, the assessment often shifts to the TDSR (Total Debt Servicing Ratio) of the individuals behind it — looking at personal income, existing debts, and assets. For a business owner whose company figures don’t quite pass DSCR but who personally has strong income and cash holdings, this route can open the door.

The trade-off? That investment holding company route typically caps you at 80% LTV instead of 90% — so you put in more cash upfront. But more cash on the table is exactly what often makes the bank comfortable, and an approval at 80% beats a rejection at 90% every time.

Operating company vs investment holding company: side by side

To pull it all together, here’s how the two structures compare on the points that matter most:

Neither is “better” in the abstract — the right structure is the one that matches your numbers and gets you approved on terms you’re happy with. That’s a 15-minute conversation, not a guessing game.

Frequently asked questions