SMSF lending
Working with an SMSF and commercial loan broker
What an SMSF and commercial loan broker does, how borrowing inside a self-managed super fund works, plus the rules, costs and risks to weigh up first.
If you are looking to buy property inside your super, an SMSF and commercial loan broker can help you understand the rules, weigh up the costs, and find a lender whose criteria fit your fund. A self-managed super fund (SMSF) is a super fund privately run by its members, who are also the trustees, so the responsibility for every decision sits with you. Borrowing to buy property inside an SMSF is allowed under strict conditions, and the right broker helps you see whether it suits your circumstances before you commit. Whether it is the right move depends on your circumstances and lender criteria.
This guide explains what an SMSF loan broker actually does, how borrowing inside an SMSF works, the rules and risks you need to know, and how a commercial mortgage broker fits in when the property is commercial. It is general information, not personal advice.
What an SMSF and commercial loan broker does
An SMSF and commercial loan broker sits between your fund and the lenders who offer this kind of finance. Not every lender writes SMSF loans, and the ones that do set their own criteria, so a broker who works in this space knows where to look and what each lender wants to see.
A good SMSF loan broker will help you:
- Understand whether borrowing inside your SMSF is even possible for your fund and your goals
- Compare lenders who offer limited recourse borrowing arrangements, rather than guessing
- Prepare the paperwork your fund needs, working alongside your accountant and adviser
- See the full cost picture before you decide, not just the headline rate
When the property is a shop, office, warehouse or other business premises, the same broker often acts as a commercial mortgage broker, because commercial lending follows different rules to a standard home loan. The broker does not give you tax or financial advice on whether an SMSF is right for you. That is the job of your accountant or licensed adviser. The broker’s role is the lending.
How borrowing inside an SMSF works
You cannot simply take out a normal loan inside a super fund. Borrowing to purchase property through an SMSF is done through a limited recourse borrowing arrangement (LRBA). The word “limited recourse” means that if the loan defaults, the lender’s claim is limited to the single asset bought with the loan, not the rest of the fund’s assets.
Under LRBA rules, an SMSF can only purchase a single asset, such as one residential or commercial property, through each arrangement. The property is held in a separate holding trust until the loan is repaid. This structure is more involved than a standard mortgage, which is one reason an experienced broker is worth having.
To picture the scale, there were over 653,000 SMSFs in Australia at 31 December 2025, holding more than 1 trillion dollars in assets, and around 17.5 per cent of those assets are held in residential and commercial property. So property inside super is common, but it is far from automatic, and it is not right for every fund.
The rules you have to meet
SMSF property borrowing comes with conditions that do not apply to a normal home loan. These are set by law, and your fund has to meet them.
The property must meet the sole purpose test, which means it has to be held solely to provide retirement benefits to fund members. On top of that, the property must not be acquired from a related party of a member, and it must not be lived in or rented by a fund member or a related party of a member.
Commercial property is treated a little differently. Business premises owned by an SMSF can be leased to a fund member, but only if you follow specific rules and lease the property at market rates. This is a key reason many small business owners look at buying their own premises through their SMSF, and it is where a commercial mortgage broker earns their place.
| Rule | Residential property in an SMSF | Commercial property in an SMSF |
|---|---|---|
| Sole purpose test | Must be held solely to provide retirement benefits. | Must be held solely to provide retirement benefits. |
| Acquiring from a related party | Must not be acquired from a related party of a member. | Business real property can be acquired from a member, under specific rules. |
| Lived in or used by members | Must not be lived in or rented by a fund member or a related party. | Can be leased to a fund member, but only at market rates under specific rules. |
Remember that as trustees you are always legally responsible for the fund’s decisions, even if you use an adviser, accountant or lawyer. A broker can guide the lending, but the duty stays with you.
What it can cost
The costs of an SMSF property purchase add up, and they are easy to underestimate. Moneysmart lists costs that can include advice fees, initial setup costs, ongoing SMSF costs, ongoing property costs, loan costs and additional life insurance costs.
More broadly, SMSFs can be expensive to set up and run, and in some cases can cost more than retail and industry funds. A broker cannot remove these costs, but a good one will lay them out clearly so you can compare the full picture against the headline interest rate. The right loan for your fund depends on your circumstances and lender criteria, not on the lowest advertised rate.
The risks worth understanding
Borrowing inside super magnifies both the gains and the losses, so the risks deserve real attention. The risks of SMSF property can include higher costs, cash flow pressure, loan repayment risk, difficulty unwinding the arrangement, and tax losses that cannot be offset against income outside the SMSF.
Be cautious of commissions or referral fees paid to people involved in an SMSF property transaction, because these can create conflicts of interest. A broker who is upfront about how they are paid, and who points you back to your accountant for the suitability question, is the kind of broker you want.
How a commercial mortgage broker fits in
When the property is commercial, the lending is commercial, and that changes the picture. A commercial mortgage broker understands how lenders assess business premises, how lease income is treated, and how loan terms and deposits differ from residential lending. Inside an SMSF, this matters because the same fund might hold a commercial property leased back to the members’ own business at market rates.
This is where the two roles overlap. The same broker can act as your SMSF loan broker for the super-fund structure and as your commercial mortgage broker for the commercial lending itself. Bringing both together in one conversation means fewer gaps and fewer surprises.
Working out the numbers
Before you talk to anyone, it helps to get a rough sense of what your fund could borrow and repay. A borrowing power calculator lets you enter income, expenses and the loan you are considering, and see an indicative figure. It is not a loan approval and it does not account for every SMSF rule, but it is a useful first step to frame the conversation.
Run a borrowing power calculator so you arrive with a number in mind, then a broker can pressure-test it against real lender criteria.
Try the borrowing power calculator
Open the calculator to run your own numbers.
How a broker takes you through it
Most SMSF property purchases follow a similar path, and a broker helps you move through it in order.
1 Talk to your accountant or adviser first
2 Establish or review the fund structure
3 Speak to an SMSF loan broker
4 Compare the lending options
5 Prepare and lodge the application
6 Settle the purchase
This is general guidance only. Your own steps depend on your fund, your professionals and your chosen lender.
Where this connects to your wider plans
SMSF lending does not sit in isolation. If you are also buying a home, or helping family into one, it can help to understand how lenders read income and security in the wider market. Our guide on Borrowing power first home buyer explains how lenders assess what you can borrow, our Self employed first home buyer guide covers how lenders treat business income, and our guide on First home buyer investment property looks at how investment lending differs from owner-occupier lending. The same lender logic that shapes those decisions also shapes SMSF lending.
You can explore the full picture, and how SMSF lending might fit your goals, on our Smsf hub.
Talk it through
Borrowing inside an SMSF can open doors, but only when the structure, the rules and the costs all stack up for your fund. If you would like a clear read on whether an SMSF and commercial loan is realistic for you, and what a lender would actually require, the team at Finance Lab can walk you through it alongside your accountant.
Talk it through with the team at Finance Lab
A Finance Lab broker can look at your fund, your goals and the lending options, and explain what a lender would require, working alongside your accountant. No cost to chat, no obligation to proceed.