Direct answer
An SMSF commercial loan is a limited-recourse borrowing arrangement that lets a self-managed super fund purchase commercial or business real property, held on the fund's behalf through a bare trust. In Australia it is secured by a first mortgage over the property, typically extends well beyond five years, and is arranged through banks and specialist funds for SMSF trustees, most often to acquire the very premises the members' own business trades from.
Who uses it and why
The most common use of this product is a business owner whose self-managed super fund buys the commercial property the business already operates from, or is about to move into, with the business then paying market-rate rent to the fund as tenant. This achieves two things at once: the business secures its premises on a long-term basis, and the rent paid effectively builds retirement savings inside the superannuation environment rather than benefiting an external landlord. Other SMSF trustees use the same structure to acquire an unrelated commercial property purely as a fund investment, held for its rental income and long-term growth.
Because the borrowing sits inside superannuation, the structure and the compliance requirements around it are more prescriptive than standard commercial lending, and every arrangement needs to satisfy the fund's own investment strategy and the relevant superannuation rules governing related-party transactions where the property is leased back to a member's business. ⚠ These are legislative and trustee-obligation matters that sit with the fund's own accountant, financial adviser or SMSF specialist to confirm — Solara arranges the finance and does not provide superannuation or trustee advice. Typical borrowers are SMSF trustees acquiring their own business premises, and trustees investing fund assets into commercial property more broadly.
For a business owner, the appeal is straightforward: rent that would otherwise go to an external landlord instead flows into the trustees' own superannuation savings, while the business secures long-term certainty over its premises. That dual benefit is what makes this one of the more consistently used strategies among self-employed borrowers and small business owners with an established SMSF, though it only works where the fund's balance and contribution capacity genuinely support the borrowing involved.
What lenders look at
Because an SMSF loan must be limited recourse under superannuation law, the lender's security is confined to the property itself rather than extending to other fund assets, which makes lenders more conservative on the property and the fund's position than they would be on a standard commercial loan. Loan-to-value ratios typically extend to 65–75%, and the property type, its marketability, and whether it will be tenanted by a related party (the fund members' own business) or an unrelated third party all shape the assessment.
The fund's own financial position is scrutinised closely: existing fund balance, contribution history, and whether the fund's cash flow — rental income plus any ongoing contributions — comfortably services the loan, since this is a long-dated commitment inside a structure with limited flexibility to draw on other assets if repayments are missed. Given the compliance sensitivity of the structure, documentation is full-doc only across the panel, with the trust deed, the fund's investment strategy, and the bare trust arrangement all required before a facility can proceed. Credit history expectations are the most conservative in the category — this is a clean-credit product, and lenders generally expect the trustees and members to have an unblemished credit file, reflecting both the regulatory sensitivity of the structure and the long-term nature of the commitment.
Typical terms
|
|
| Size |
$200,000 to $5m, subject to lender assessment |
| LVR |
Typically up to 65–75% |
| Term |
Extending well beyond five years, commonly out to 15–30 years |
| Speed |
Indicative approval in 28–56 business days from a complete application |
| Security |
First mortgage over the commercial property, held via a bare trust |
| Pricing |
Priced on risk and security; indicative range on enquiry |
Structures we see most
Business real property acquisition. The fund purchases the property the members' own business trades from, with the business then leasing it back from the fund at market rent, a structure widely used by business owners to hold their premises inside superannuation.
Unrelated commercial property investment. The fund acquires a commercial property leased to an unrelated third party, held purely as a superannuation investment rather than in connection with any member's business.
Refinance of an existing SMSF facility. Moves an existing SMSF commercial loan to improved terms, or restructures the facility as the fund's balance and servicing capacity grow over time.
Contribution-supported facility. Structured with an expectation of ongoing member contributions into the fund, which supplement rental income in servicing the loan, particularly in the earlier years of the facility.
Related-party lease review structure. Built around a formal, arm's-length lease between the fund and the members' business, reviewed periodically to ensure rent remains at market rate, a requirement of the related-party lending environment this product operates within.
Multi-member fund facility. Structured for a fund with several members contributing to the borrowing capacity and servicing of the loan, common in funds established by business partners or family groups purchasing a shared premises.
Costs and how we're paid
Pricing on SMSF commercial loans reflects the property, the fund's financial position and the limited-recourse structure, and is quoted on enquiry once a lender has reviewed the full file — no flat rate applies across the product. Facilities typically carry an establishment fee and ongoing account fees, alongside the trust and legal costs of setting up the bare trust structure itself; all costs are set out in the loan offer before a trustee commits.
Solara is remunerated by the lender, the trustee, or both, depending on structure, which may include a commission from the lender and/or a broker fee agreed with the trustee. Any commission or fee is disclosed in writing before an application proceeds.
Trustees should also budget for the legal costs of establishing the bare trust and limited-recourse borrowing arrangement itself, which sit alongside the loan's own establishment costs and are a standard, unavoidable part of setting up a compliant SMSF borrowing structure for the first time.
Process and timing
- Initial scoping call — typically same day. We confirm the property, the fund's balance and structure, and whether the property will be leased to a related or unrelated party.
- Document collection — typically 5–10 business days. Fund trust deed, financials, the bare trust arrangement, and lease documentation where applicable.
- Lender matching and submission — typically 3–5 business days. We place the file with the banks and specialist funds whose appetite matches the fund's position and the property type.
- Approval and offer — typically 15–30 business days, reflecting the additional structural and compliance review this product requires.
- Documentation and settlement — typically 10–15 business days once terms are accepted, the bare trust is established, and the mortgage is registered.
Frequently asked
What is an SMSF commercial loan?
It is a limited-recourse borrowing arrangement that allows a self-managed super fund to purchase commercial or business real property, with the property held on the fund's behalf through a bare trust structure.
Can my SMSF buy the premises my business operates from?
Yes — this is the most common use of this product, provided the arrangement is on genuine arm's-length terms, including market-rate rent paid by the business to the fund. ⚠ The fund's compliance with related-party and sole-purpose requirements should be confirmed with the fund's own SMSF adviser.
What does "limited recourse" mean?
It means the lender's security is confined to the property being purchased and cannot extend to the fund's other assets if the loan is not repaid, a requirement of superannuation law that shapes how conservatively lenders assess these facilities.
Do I need a clean credit history to get an SMSF loan?
Generally, yes. This is the most conservative-tolerance product in the category, reflecting both the regulatory sensitivity of superannuation lending and the long-term nature of the commitment being assessed.
How long can an SMSF commercial loan run for?
Terms commonly extend well beyond five years, out to fifteen or thirty years, reflecting the long-term nature of superannuation investing rather than the shorter terms typical of standard commercial property lending.
What documentation is required?
Full financial disclosure is required across the panel, along with the fund's trust deed, its investment strategy, and the bare trust documentation establishing how the property is held on the fund's behalf.
Can an SMSF borrow to buy a residential investment property instead?
This page covers commercial and business real property lending; residential property held within an SMSF structure involves a different set of considerations and should be discussed with your SMSF adviser and, separately, with Solara regarding the appropriate facility.
How is an SMSF loan repaid?
Through the fund's ongoing rental income and, where applicable, member contributions, over the term of the facility, in the same way any other loan is serviced, but assessed against the fund's overall financial position rather than the members' personal finances.
Related products
Commercial property loans — the better fit where the purchasing entity is a standard company or trust rather than a self-managed super fund.
Low-doc commercial loans — worth noting as a contrast: this product is full-doc only given its compliance requirements, unlike the alternative-documentation options available elsewhere in the category.
Private first mortgages — the closer match where a trustee's broader financial position, rather than the fund itself, is the borrowing entity.