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SMSF lending questions

Quick Answer

How does an SMSF borrow?

Through a limited recourse borrowing arrangement, with a bare trust holding the property and the lender's recourse limited to it

A self managed super fund can borrow to buy a single asset such as a property under a limited recourse borrowing arrangement. A separate bare trust holds the property until the loan is repaid, the fund pays the loan from rent and contributions, and if the fund defaults the lender can only take that property. The rules restrict what the fund can buy, what it can do with the property and how it can refinance, and only a limited group of lenders offer the loans.

  • Structure LRBA with a bare trust
  • Lender recourse Limited to the property
  • Typical LVR 60% to 80% depending on property
  • Lenders A small specialist group

What this section covers

These pages answer the specific SMSF lending questions the main guide does not: whether and how an SMSF loan can be refinanced, what the fund needs in place before a lender will consider it, why SMSF interest rates are higher and where they sit, what deposit and liquidity the fund needs, and whether the fund can buy the premises your business operates from.

Superannuation rules and lender policy both apply, and both change. Confirm the fund side with your adviser before committing.

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SMSF lending is a small lender market with strict rules. We connect you with a finance specialist who deals with SMSF lenders every week and knows which fund structures and properties they will accept.

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Property Finance Help is a lead generation service, not a lender, broker, or financial adviser. All information on this website is general in nature and does not take into account your personal objectives, financial situation, or needs. Consider seeking independent professional advice before making any financial decision.

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