SMSF Loan

If your self-managed super fund is buying a property and needs to borrow to do it, the loan is a Limited Recourse Borrowing Arrangement, or LRBA. Limited recourse means that if the loan goes bad, the lender can only claim the property held for the fund, not the fund’s other assets. Most lenders also ask the members to give personal guarantees, so talk to your adviser about what that means for you.

What we do is the lending side. We work out which lenders will lend to your fund, what they will lend, and what conditions they attach, then we put the application together and run it through to settlement.

What lenders look at:

• The deposit the fund already holds, to cover part of the purchase price plus costs.
• Contributions and rent coming into the fund, and whether they cover the repayments with a buffer.
• A liquidity buffer left in the fund after settlement.
• The trust deed, the bare trust and the corporate trustee structure.
• The property itself. It has to be a single acquirable asset, and every lender has its own rules on location, size and type.

Each lender sets its own minimums for the deposit and the buffer, and we will tell you what they are for your fund.

What we do not do: we do not advise on whether an SMSF suits you, whether to roll your super over, or whether property belongs in your fund. Those are financial product advice and they sit with your accountant or your licensed financial adviser. We arrange credit. We are not financial advisers. Come to us once the fund exists and the strategy has been signed off, and we will handle the loan.