LRBA requirements checklist: what the fund needs before it can borrow

First check the property. Since 10 August 2026 a new LRBA is only available where the property is business real property: land and buildings used wholly and exclusively in one or more businesses, such as an office, warehouse, shop, factory, medical rooms or farm land. If the property is residential, the fund cannot borrow to buy it and the rest of this list does not apply. If it is business real property, the fund needs these documents.

• SMSF trust deed, current version, permitting borrowing, granting of security and the holding of assets through a bare trust; older deeds often need an update
• Corporate trustee for the fund, with the members as directors; individual trustees are declined by most lenders
• Bare trust deed establishing the holding trust, with a separate corporate trustee, drafted for the specific property and lender
• Investment strategy that addresses property, gearing, liquidity and insurance for the members
• Fund financial statements and audit for the last two years, or establishment documents for a new fund
• Member statements showing balances, contributions and any pensions

The property must be business real property. Since 10 August 2026 a fund cannot take out a new LRBA to buy residential property. The old rules still apply to loans entered into before that date, refinancing of those loans, and contracts exchanged before that date. Within that limit, the fund can borrow to buy a single acquirable asset: one property on one title, or multiple titles only where they cannot be dealt with separately. Business real property can be bought from and leased to related parties at market rent. Mixed use property, such as a shop with a dwelling or a farm with a house, needs licensed SMSF advice before a contract is signed. Borrowed funds can maintain and repair the property but cannot improve it or change its character, and the fund cannot borrow to build.

Lenders want the fund to service the loan from rent plus contributions, with a buffer. Most require the fund to hold liquid assets after settlement, commonly 10 per cent of the property value or a set dollar amount, so that vacancy or a contribution gap does not cause default. Member contributions are counted only where they are consistent and within the caps, and the lender will look at the members' ages and employment.

Confirm the property is business real property, because a new loan is not available for anything else. Establish or update the fund and deed. Set up the corporate trustees. Get the investment strategy in order. Obtain pre-approval from an SMSF lender so the fund knows its budget. Set up the bare trust for the specific property after the contract is signed in the correct name, because getting the contracting entity wrong is a costly and common mistake. Then valuation, approval and settlement, typically six to eight weeks.