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Self Managed Super Funds (SMSF)

Loans for SMSF


There are significant advantages to having a property in a Self Managed Super Fund (SMSF) as well as the choice to control your investments and your future investment strategy.

SMSF’s are able to borrow funds via what  has been defined by Superannuation legislation as a “Limited Recourse Borrowing Arrangement “(LRBA) which describes a loan/arrangement which has a limited recourse for the lender against the borrower in the event of default, to the single asset purchased using the specific LRBA  – thus protecting the other assets that sit inside the SMSF.

Each asset purchased using an LRBA must be housed inside what is known as a “Bare Trust”

Key Issues to Consider

Investing in property within your SMSF isn’t for everyone (it may limit for instance the asset class weights inside the fund and thus create unnecessary risk – in other words, illiquid assets such as property may not be appropriate for your risk profile but, if you want to review the opportunity then the following key issues need to be considered:

  1. Does borrowing fit with your investment strategy?
  2. Does your trust deed even permit borrowing?
  3. Is the asset class (eg property) allowed in your SMSF via the trust deed?
  4. What expenditure is allowed?
  5. Bare trust deed requirements
  6. Borrowing to buy a commercial property
  7. Borrowing to buy residential property
  8. Limitations
  9. Costs of establishing an SMSF
  10. Seek financial advice.
Loan Type Options

Limited recourse borrowing arrangements that could include loans such as:

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What’s involved in obtaining a loan through Intuitive Finance?

Process begins

Step 1

Initial consultation (via the phone, skype or face to face) where we establish your motivations and requirements

Step 2

Information gathering to confirm your financial status

Step 3 Review & Strategise

Clear and detailed review of your financial position with a suggested proposal for you to consider including an assessment of the best and most appropriate deals available

Step 4
Agree & Implement

Complete the necessary application paperwork including follow-up negotiations with lenders and adjustments if necessary

Step 5

Finalise approval (s), arrange formal paperwork to be signed

Step 6

Coordination of the settlement process
Process ends

An Introduction to some of the Key Finance Issues all Self Managed Super Funds need to consider

Download this handy guide that the team at Intuitive Finance has put together for you.

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