Borrowing capacity for an SMSF commercial property loan is assessed differently to a standard home loan.

Lenders will typically consider a range of factors, including:

  • The SMSF’s existing balance and available assets
  • Ongoing employer and member contributions
  • Rental income from the proposed property
  • The SMSF’s expenses, liabilities, and cash flow position
  • The type, location, and value of the commercial property
  • The SMSF’s investment strategy and overall financial position
  • Fund liquidity and the ability to meet ongoing obligations
  • The strength of the SMSF members’ overall financial circumstances

In addition to servicing requirements, lenders will also assess the amount of deposit available within the SMSF.

SMSF commercial property loans generally require larger deposits than standard residential lending, with maximum loan-to-value ratios (LVRs) varying between lenders and property types. The total funds required will also need to cover purchase costs such as stamp duty, legal fees, and establishment costs.

Because SMSF lending policies can differ significantly between lenders, obtaining a borrowing capacity assessment before searching for a property can help you understand your available options and purchasing power.

We can help assess your SMSF’s borrowing capacity and explain lender requirements before you commit to a commercial property purchase.

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