Book a call
Book a call

SMSF Commercial

Competitive, compliant solutions to buy commercial property via your SMSF

Make an Appointment
Commercial loans can be great for Self Managed Super Funds (SMSF) that want to start up a business.
The difficulty is that some banks have strict lending policy and may not approve your application for a commercial loan.

How much can you borrow?

You can borrow up to 70% -80% of the property value although in many cases this may be restricted to 60%.
The interest rate will be higher than it is for residential properties purchased through a SMSF.
Most major banks will look to see if your asset position is strong. They will generally be more willing to lend to you where you have a wide and varied existing investment portfolio that will provide good security to the bank and minimise the risk of lending. Each lender varies significantly with both their LVR’s and interest rates.
Thinking of doing business? Commercial loans are popular with investors that are using their SMSF to secure finance so that they can carry out a commercial project.
Most banks will generally allow you to borrow money in your trust, as you would for commercial properties in your personal name. However, lenders will often reduce the amount that you are eligible to borrow.
This is because the risk is higher for these loan types and the bank tries to minimise this risk by restricting the LVR (Loan to Value Ration) of your loan.

Why are banks so conservative?

Unlike most conventional home loans for residential properties, commercial loans carry a higher degree of risk.
If the property that is being purchased is a shop or another type of income producing business, it will be subject to various economic conditions.
This will make it harder to assess the borrowers ability to service the loan and will increase the need for suitable security to ensure that the bank does not incur loss as a result of lending to you.
However, there is a chance that the security you offer could also devalue, which makes it even more difficult for the banks to appraise.

Repaying the SMSF commercial loan

Often the repayment of the commercial loan is dependent on the financial success and viability of your business.
It follows that if the business is experiencing cash-flow issues, your ability to repay the loan may be reduced. The banks take all of this into account when assessing how much you can borrow. Generally, most lenders will restrict the LVR of your commercial investment loan.

How does this differ from residential loans?

It may be significantly easier to obtain a residential loan for your SMSF.
This is because the bank will look at your income, as well as the value of the property you are buying.
It will be much easier for the lender to assess the value of your security type and it will generally be subject to less market volatility.

What is a commercial loan?

Commercial loans are generally taken out by businesses that need finance to fund their business activities.
For many businesses, this means purchasing property that will become the business premises. The site is then used to conduct and operate activities to generate an income.
The loan may cover expenses such as fit out and the purchase of supplies to assist in setting up and establishing the business.
Self Managed Super Funds (SMSF) can obtain commercial loans to fund their business activities, much like a company.
However, as with all other loan types, the SMSF will need to prove that they are able to repay the loan according to the loan agreement.
Speak our experts!!
If you are thinking of applying for a SMSF commercial loan.
We can help you get the best deal around. Enquire online today!
Note: This website is for informational purposes only and should not be substituted for professional financial or taxation advice.

We are here to help,
every day

We understand you to help navigate through changes in your circumstances. Our services are designed to offer a holistic and objective solution, with a complete focus on your needs.

Client's Reviews

sagar ranganath
sagar ranganath
2022-03-24
I have worked with the team for a few months now.Absolutely great team to work with! Guided me with the best available options in the market.
Harry Verma
Harry Verma
2022-02-17
Many thanks to the Team at Finance and Mortgage Solutions which helped me to secure my bank loan without any fuss. Their fully secured digital technology made every part of the loan process very easy and hassle free.
Manasi Thompson-Milne
Manasi Thompson-Milne
2022-02-14
Madhu, Arnab and team have helped us with refinancing our mortgage with so much ease. They understood our concerns and were able to tailor a solution that was ideal for our situation. They kept us upto date at all times and were able to quickly resolve any problems that arose. Their wealth of knowledge across mortgages as well as finance overall has been immensely valuable. Anyone looking for advise and tailored solutions especially families, new migrants or someone who’s just confused with the options available should give this team a call.
Ajit Singh
Ajit Singh
2022-02-08
I joined as a mentee under Madhu Chaudhuri from Finance and Mortgage Solutions in 2017, and worked under her supervision till March 2021. I have learnt Residential and Commercial lending while being mentored by her. Now I am running my own Mortgage broking business successfully since I April 2021. The weekly classes and networking sessions run by Finance and Mortgage solutions were quite helpful to keep me updated with latest policies of the Finance Industry. I want to express my gratefulness that I had an opportunity to work and learn working with Madhu Chaudhari. She is an amazing mentor who has made a substantial change in my career over the past few years. She fully understands the needs and inspires new brokers to bring out best in them. She has tons of experience & immense knowledge in the finance & mortgage industry.
Vidya Rajaram
Vidya Rajaram
2022-01-30
It’s been a pleasure working with Madhu. She carefully analysed our situation and looked into all areas of our outgoings and ensured we maximised our savings to be able to save for our future. She is really patient and her advice on various fronts of our finance structure helped us immensely. She is a walking encyclopaedia of all things finance. Definitely will recommend her to everyone who needs a great adviser... She has certainly made a friend for a lifetime...
Rupayan Chowdhury
Rupayan Chowdhury
2022-01-25
As a first home buyer, I was really facing so much issues. The advice, support and service Finance and Mortgage Solution that are giving me are simply amazing. I highly recommend FMS for mortgage related consultancy.
Ramprasad Krishnaswamy
Ramprasad Krishnaswamy
2022-01-24
Madhu was my mentor for 2 years from November 2016 to June 2018. She was available during working hours for any questions and she believes in helping her mentees to learn by working through scenarios and arriving at the approriate solutions. My skills in developing appropriate scenarios to the unique financial situation of a customer were enhanced during the mentorship. How to talk to the assessors and how to approach a BDM for a solution were skills that were honed during this period.Finally pitching the loan to the customer and compliance training were addressed in great detail. Madhu is very helpful and extremely knowledgeable. I would recommend her anytime as a mentor for any person wishing to become a Broker.
Yuva Raj
Yuva Raj
2022-01-13
Madhu and team are thorough professionals and am really happy with the advise they provided to make informed decisions. I have gone again with Madhu for the construction loan. She was able to secure us an excellent deal after going through with several lenders. Appreciate thier customers first approach and commitment. Thanks a lot again.
Dheerajkumar KR
Dheerajkumar KR
2021-11-18
I cant recommend much more than this. Well organised, good follow up, great mentorship and guidance throughout. Recommends based on our specific needs and answers to all our questions patiently and responsibly!
Sunny Puri
Sunny Puri
2021-11-01
I recently got a home loan approved from Finance & Mortgage Solutions. I cannot thank them enough for their help excellent service and highly recommend especially Madhu and Arnab without them it wouldn't have been possible . Thanks 👍.
crossmenu