Since September 2007 borrowing to invest in your super has been a popular strategy used by SMSFs. Where your SMSF borrows to purchase either residential or commercial property this borrowing arrangement is referred to as a limited recourse borrowing arrangement (LRBA).
SMSF lending is significantly different to your standard lending options.
Where to start?
- The correct sequencing when using an LRBA is the following:
- Obtain advice from your finance planner;
- In consultation with your lending specialist, have your planner establish the correct company and trust structure to facilitate your objectives;
- Transfer fund from your existing super fund into your SMSF;
- Secure a property for purchase.
