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SMSF Loans and How They Work
A Self-Managed Super Fund loan allows your SMSF to borrow money to acquire an asset through a structure known as a Limited Recourse Borrowing Arrangement, or LRBA. Under this arrangement, the asset is held in a separate holding trust while your fund holds a beneficial interest in it. Once the loan is repaid, legal ownership transfers to the SMSF. Importantly, if the loan defaults, only the asset held in the trust is at risk. Other assets held by your fund remain protected.
At Harvest Capital Finance, we work with clients across the Northern Rivers of NSW and into the Southern Gold Coast who are looking to understand their options around commercial loans and SMSF borrowing. As an SMSF mortgage broker, our role is to help you compare SMSF lenders, understand deposit requirements, and find a loan structure that suits your fund's circumstances. We do not provide financial or legal advice, and we always recommend you work with a licensed SMSF specialist alongside us.
Changes to Residential SMSF Loans
The rules around SMSF loans changed significantly following the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 receiving Royal Assent on 26 June 2026. New LRBAs entered into to purchase real property can now only be used to acquire business real property. This means that SMSFs can no longer enter into a new LRBA to purchase residential property.
This does not mean SMSFs cannot hold residential property. Your fund may still own residential property acquired without borrowing, provided it meets the usual rules under the Superannuation Industry (Supervision) Act 1993, including that the property cannot be acquired from a related party and cannot be occupied by a fund member or a related party of a member. Existing residential LRBAs already in place are not affected, and a residential loan refinance of those arrangements is also permitted.
If you exchanged a binding contract to acquire residential property prior to the commencement of these changes, transitional provisions may apply even if settlement occurs after that date. Significant changes to the contract terms may affect whether this protection applies, so specialist advice is essential.
SMSF Commercial Loans
For many clients, the focus has now shifted firmly toward the SMSF commercial loan. Using super to buy a commercial investment property through an LRBA remains fully available, provided the property meets the definition of business real property under section 66 of the Superannuation Industry (Supervision) Act 1993. Business real property generally means land and buildings used wholly and exclusively in one or more businesses. Whether a property qualifies depends on its actual use at the time of acquisition, not simply how it is marketed or described.
A commercial SMSF property loan can be a powerful tool for business owners. For example, a business may be able to lease its premises from the SMSF at arm's length market rates, with rental income flowing back into the fund. This kind of arrangement is excluded from the in-house asset rules, provided the lease is on arm's length terms. The SMSF sole purpose test under section 62 of the Superannuation Industry (Supervision) Act 1993 must be satisfied at all times. This means all investments, including property held under an LRBA, must be maintained solely to provide retirement benefits to members.
At Harvest Capital Finance, we can help you compare SMSF lenders across a range of investment loans and commercial lending options, assess loan LVR and deposit requirements, and understand whether a variable rate or SMSF fixed rate product suits your fund's position. Borrowing capacity will depend on the fund's income, existing commitments, and the lender's assessment criteria.
Tax Considerations for SMSF Property
SMSF rental income tax is generally applied at the concessional rate of 15 percent for a complying fund in accumulation phase. When a property is sold, a capital gain may arise. Where the asset has been held for at least 12 months, a one-third CGT discount may apply, potentially reducing the effective rate to around 10 percent on the discounted gain. This is not a fixed rate and the actual outcome depends on the fund's overall tax position, adjusted cost base, and other factors.
In pension phase, where a fund's assets are fully segregated as current pension assets, a capital gain on disposal may be disregarded under the exempt current pension income rules. Where a fund has both accumulation and pension interests, the exemption will be partial. From 1 July 2026, Division 296 tax applies where a member's total superannuation balance exceeds $3 million, with an additional rate applying above $10 million. Rental income and realised capital gains may contribute to the Division 296 earnings calculation. These are complex areas and Harvest Capital Finance strongly recommends you seek advice from a licensed SMSF specialist before making any decisions.
SMSF Loan Application and Lender Requirements
The SMSF loan application process involves lender assessment of the fund's income, member contributions, the property itself, and the LRBA structure. A bare trust, sometimes called an SMSF bare trust or holding trust, must be established to hold the asset during the loan term. Lenders have varying requirements around the type of trust deed, trustee structure, and fund balance. Loan interest rate options vary between lenders, with some offering variable rate products and others offering an SMSF fixed rate for a set term.
The ATO publishes safe harbour interest rates under Practical Compliance Guideline PCG 2016/5 for related party loans. Where an LRBA does not meet arm's length terms, income from the arrangement may be assessed as non-arm's length income and taxed at the highest marginal rate of 45 percent. This makes it critical that any SMSF loan, whether from a bank, non-bank lender, or related party, is structured correctly from the outset.
Harvest Capital Finance works alongside your SMSF specialist and accountant to help you compare SMSF lenders, understand the deposit requirements and loan LVR available to your fund, and put together a loan application that reflects your fund's actual position. If you are considering buying a commercial property with super, or want to explore your options around a residential loan refinance of an existing arrangement, we are here to help you take the right steps with the right people around you.
1. Initial Conversation
We start with a no-obligation chat to get to know you and your business. Whether you call us, send an enquiry, or meet us in person, this is your chance to tell us what you are looking to achieve. There are no silly questions and no pressure.
2. Understanding Your Needs
Once we know a bit about you, we dig deeper into your goals, your current financial position, and any challenges you are facing. This helps us build a clear picture of what kind of finance solution will work best for your situation.
3. Researching Your Options
With access to a wide panel of lenders, we do the legwork for you. We compare products, rates, and terms across multiple lenders to find options that genuinely suit your business needs, not just the first deal that comes along.
4. Presenting Your Options
We present you with clear, easy-to-understand options. We walk you through the pros and cons of each so you can make an informed decision with confidence. No jargon, no confusing fine print.
5. Preparing Your Application
Once you choose the right path forward, we prepare and package your application. We know what lenders are looking for, so we present your application in the best possible light to improve your chances of approval.
6. Managing the Process
We handle the back and forth with the lender on your behalf. We keep you updated every step of the way so you always know where things stand. Our job is to make this as smooth and stress-free as possible for you.
7. Settlement and Beyond
Once your finance is approved and settled, our relationship does not end there. We check in to make sure everything is working as expected and we are always available when your needs change or grow. We are here for the long haul.
Whether you are looking to buy a commercial property with super or refinance an existing SMSF arrangement, Harvest Capital Finance is ready to help you compare lenders and understand your options. Book an appointment with our team today.
Book AppointmentThe timeframe for commercial finance can vary quite a bit depending on the type of finance you are seeking, the complexity of your situation, and the lender involved. Some applications can move through relatively quickly, while others that involve commercial property or more complex structures may take longer. At Harvest Capital Finance, we work to keep things moving as efficiently as possible by making sure your application is well-prepared and complete before it goes to a lender. Delays often happen when information is missing or unclear, so we put a lot of effort into getting things right from the start. We will always give you a realistic expectation of timeframes based on your specific circumstances.
Going directly to your bank means you are only seeing what one lender has to offer. A commercial finance broker like Harvest Capital Finance has access to a panel of lenders, which means we can look across multiple options on your behalf. This saves you time and effort, and it means your application is being presented to lenders who are more likely to suit your needs. Banks also have their own criteria and processes, and if your application does not fit their standard mould, you may be declined without much explanation. A broker understands how different lenders assess applications and can help you put your best foot forward. We are also here to explain things clearly so you always know where you stand.
A commercial finance broker acts as a go-between for businesses and lenders. Rather than you having to approach multiple banks or lenders on your own, a broker does that work for you. At Harvest Capital Finance, we talk to a wide range of lenders on your behalf to find finance options that suit your business needs and circumstances. We handle the paperwork, ask the right questions, and present your application in the strongest possible way. Whether you are looking to purchase equipment, buy a commercial property, or fund business growth, having a broker in your corner means you have someone who understands the lending process and can guide you through it from start to finish.
The information required will depend on the type of finance you are looking for, but generally speaking, lenders will want to understand your business financials, your assets and liabilities, and the purpose of the loan. This might include things like tax returns, business activity statements, bank statements, and details about any property or assets you own. For newer businesses, lenders may also want to see a business plan or cash flow projections. At Harvest Capital Finance, we will walk you through exactly what is needed for your specific situation so you are not left guessing. We will also help you understand why each piece of information is required and how it is used in the assessment process.
Harvest Capital Finance works with business owners, investors, and operators across the Northern Rivers of NSW and into the Southern Gold Coast. This includes people in industries like agriculture, construction, retail, hospitality, professional services, and many more. We understand the local area and the unique challenges that come with running a business in regional and coastal communities. Whether you are a sole trader just getting started or an established business looking to expand, we are here to have a conversation about your situation and explore what finance options might be available to you. We take the time to understand your goals before recommending any course of action.
Harvest Capital Finance can assist with a broad range of commercial finance needs. This includes business loans, commercial property finance, equipment and asset finance, trade finance, debtor finance, and construction finance, among others. Every business is different, and the type of finance that suits one business may not suit another. That is why we take the time to understand your specific situation before exploring what options might be available through our panel of lenders. We do not take a one-size-fits-all approach. Instead, we focus on understanding what you are trying to achieve and then working to find a finance solution that fits your goals and your business circumstances.
Yes, absolutely. The Northern Rivers region has a strong agricultural and rural community, and we understand the unique financial needs that come with running a farming or rural business. Whether you are looking at finance for land, machinery, livestock, or other rural assets, we have experience working with clients in this space. Agricultural finance can be quite different from standard business lending, with seasonal income patterns and land valuations that require lenders who understand the rural sector. At Harvest Capital Finance, we work with lenders who have experience in this area and who understand the realities of running a rural operation. We are proud to support the local farming and agricultural community across our region.
Not necessarily. While your credit history is one of the things lenders will look at, it is not always the only factor they consider. Different lenders have different appetites for risk and different ways of assessing applications. Some lenders may place more weight on the strength of your business, the assets you hold, or the purpose of the finance. At Harvest Capital Finance, we will have an honest conversation with you about your situation, including any credit history concerns, before we approach any lenders. We will not put your application forward if we do not think it is ready, as unnecessary applications can affect your credit file. Our goal is to give you the best possible chance of a positive outcome.
In most cases, commercial finance brokers are paid a commission by the lender when a loan is settled. This means that in many situations, there is no direct cost to you for using our services. However, depending on the complexity of your situation or the type of finance involved, a fee may apply, and we will always be upfront and transparent about this before any work begins. You will never be surprised by unexpected charges. At Harvest Capital Finance, we believe in being straightforward about how we operate and how we are remunerated. We are happy to answer any questions you have about our fees and commissions during your initial conversation with us, so you can feel confident about the process from the very beginning.
The process starts with a conversation. We want to understand your business, your goals, and what you are hoping to achieve with the finance you are seeking. From there, we will look at your financial position and identify which lenders and products might be suitable for your situation. We then prepare and submit your application, liaise with the lender on your behalf, and keep you informed throughout the process. Our role is to take as much of the administrative burden off your plate as possible, so you can focus on running your business. We will also explain any terms or conditions in plain language so you can make an informed decision before committing to anything.