Considering SMSF Lending? Key Questions You Should Be Asking
SMSF lending is not a strategy you want to enter into quietly or quickly. The right questions upfront can save you years of stress, compliance issues, and poor outcomes.
If you’re speaking with us (or any broker) about SMSF lending, these are the questions you should absolutely feel confident asking.
Is SMSF Lending Actually Right for My Fund?
This is the most important question.
A good broker should be willing to tell you when SMSF lending is not appropriate — even if it means no loan proceeds.
Ask us to explain why it does or doesn’t suit your specific fund, not just how to set it up.
Does This Align With My SMSF Investment Strategy?
Your SMSF must have a documented investment strategy that supports:
- Property investment
- Borrowing risk
- Liquidity requirements
Ask whether your current strategy supports this — or if it needs to be updated before anything proceeds.
How Much Should My SMSF Borrow (Not Just How Much Can It Borrow)?
Just because a lender allows a certain loan amount doesn’t mean it’s sensible.
Ask us to help you determine a conservative borrowing level that protects cash flow and long-term flexibility.
What Will Cash Flow Look Like If Things Change?
You should understand how the strategy holds up if:
- Interest rates rise
- The property is vacant
- Contributions reduce
If the strategy only works in perfect conditions, that’s a red flag.
What Property Types Will (and Won’t) Work?
Not all properties are suitable for SMSF lending.
Ask which property types lenders will accept — and which ones create compliance or lending issues.
What Are the Restrictions I Need to Be Aware Of?
SMSF lending has strict rules.
Ask us to clearly explain:
- Repair vs improvement rules
- Related-party restrictions
- Residential vs commercial differences
What Are the Total Costs — Not Just the Interest Rate?
SMSF lending includes more than just interest.
Ask for a breakdown of:
- Loan interest and fees
- Legal and trust setup costs
- Ongoing accounting and audit costs
How Will This Affect Liquidity in My SMSF?
Property is illiquid.
Ask how much cash your SMSF should retain and how liquidity will be managed alongside loan repayments and expenses.
What Happens If I Want to Sell or Exit the Strategy?
You should understand:
- How the loan is repaid
- Any exit or break costs
- Timing considerations
What Are the Biggest Risks — and How Are They Managed?
Every SMSF lending strategy has risk.
Ask us to clearly explain the risks and the steps taken to reduce them — not gloss over them.
Who Else Needs to Be Involved?
SMSF lending is a team effort.
Ask how your broker, accountant, and legal adviser will work together to ensure the structure is compliant and efficient.
Why Work With an SMSF Specialist Broker?
SMSF lending is not standard property lending.
Ask how experience with SMSF-specific lenders, structures, and compliance issues can protect your retirement savings.
The Right Question Is Always “Does This Improve My Retirement Outcome?”
SMSF lending should always serve the end goal — your retirement.
If the strategy doesn’t clearly improve your long-term position, it’s worth pausing.
Ready to Ask These Questions?
If you’re exploring SMSF lending and want clear, practical answers — without sales pressure — we’re happy to talk it through.
Book an SMSF Lending Strategy Conversation
The best SMSF lending decisions start with the right questions — not assumptions.
