SMSF Commercial Property Loans Overview

What do smsf commercial lenders look for?   With SMSF Commercial property loans, as well as sound commercial security, lenders need to know the fund can afford to pay the loan. For this reason they focus on the funds income.

Contributions  They look at how much and how regular contributions have been made into the fund.

Rent  They also look at the lease  to see the rent being received. If the property is to be owner occupied (which is common) then the rent is assessed at market rent.

Loan size   Minimum loan size is $500,000.  Most smsf commercial finance is done up to $1m.  No maximum loan size.

Term   From 1 year to 30 years. For smsf commercial property loans the lenders are looking at the income streams. Normally owner occupied commercial loans are done for a longer term.

  • LVR 
  • 80% up to $1m (residential security)
  • 75% up to $3m
  • 70% up to $5m
  • 65% unlimited, and assessed on its merits
  • 55% for cheaper rates

Indicative SMSF Rates  As a guide, for standard smsf commercial properties, variable rates normally sit between 4.79% to 6.8%. Larger commercial loans can be done cheaper than this.

The trend in 2022 seems to be mixed for the commercial property market. Even though growth takes place at a slow pace, property values may be higher at the end of the year.  Many analysts didn’t anticipate the average price rise would be stronger the way it was in 2021. As auction clearance rate dropped,…
Interest Only  A borrower can negotiate with lenders interest only repayments. Lenders can only allow this situation if the business has large cash-flow deposits that are capable of making large interest only repayments before its period expires.  The common interest only commercial term loan is 1-2 year term.  Select commercial loan lenders prefer a 5-year…
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