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How much can your SMSF borrow? LVR, deposits and servicing explained

How much a self-managed super fund (SMSF) can borrow for commercial property comes down to three things: the property itself, the size and profile of the fund, and the lender you use. The loan is structured as a Limited Recourse Borrowing Arrangement (LRBA), which is the only borrowing an SMSF is allowed to take on.

Because a handful of specialist lenders now dominate this market, borrowing capacity for the same property can vary widely from one lender to the next.

If you want a broker to run the numbers, our team arranges SMSF commercial property finance from the specialist lenders who cover it.

Loan-to-value ratios for SMSF commercial property

The loan-to-value ratio (LVR) is the loan as a percentage of the property value. For SMSF commercial property, most lenders sit between 65% and 75%.

  • 65% to 75% is the standard range for commercial property inside super.
  • Up to 80% is possible for strong applications and sought-after property, such as medical suites, prime metropolitan locations, or premises with a government tenant.
  • A small number of lenders have started offering higher-LVR programs, but these remain the exception and price higher.

These ratios are lower than a standard home loan because commercial property is more volatile and less liquid, so lenders hold a larger buffer.

Deposits and upfront costs

A 65% to 75% LVR means a deposit of 25% to 35% of the purchase price, plus the costs on top.

  • Stamp duty and legal or conveyancing fees.
  • The cost of establishing the holding trust and corporate trustee.
  • Lender application and valuation fees, commonly $1,500 to $3,000.
  • A cash buffer left in the fund after settlement.

How lenders assess servicing

Servicing is the test of whether the fund can comfortably meet the repayments. Lenders look at the income coming into the fund, not your personal salary.

  • Rent from the property, assessed at a discounted or shaded rate.
  • Employer super guarantee contributions, now legislated at 12%.
  • Concessional contributions, within the $32,500 cap for 2026-27.

Most lenders want to see that the fund can service the loan with a margin to spare, and some prefer an SMSF with at least 12 months of history.

Minimum fund balance and liquidity

As a rough guide, specialist lenders look for a minimum SMSF balance in the region of $200,000 to $300,000 before they will consider a commercial purchase. Just as important is liquidity: the fund needs to keep a cash buffer after settlement to cover repayments, insurance, expenses and any pension payments if a member has retired.

Why specialist lenders matter

The major banks exited new SMSF lending in 2018 and 2019. The market is now served by around 12 specialist non-bank lenders, and their policies and pricing differ sharply. Two lenders quoting the same property can land well apart on both rate and maximum loan. This is where a broker who works in the SMSF space earns their keep.

To understand the loan structure itself, read our explainer on how LRBAs actually work.

Frequently Asked Questions (FAQs)

What is the maximum LVR for an SMSF commercial loan?

For most commercial property the ceiling is around 75%, with up to 80% available on strong applications and in-demand property types. Anything higher is uncommon and priced accordingly.

Does the loan affect me personally if the fund cannot pay?

No. Under an LRBA the lender can only recover against the single property held in the holding trust. The fund’s other assets are protected, which is why lenders are more conservative on LVR.

Can a newly established SMSF borrow?

Some specialist lenders accept a new fund if the trustees can show consistent contributions and an adequate cash buffer, though many prefer a track record. A broker can point you to the lenders comfortable with newer funds.

How large a loan can I get?

Commercial SMSF loans can run into the millions, with some lenders funding several million dollars. The real limit is what the fund can service and the deposit it can provide.

The Bottom Line

Expect to borrow up to about 65% to 75% of the value of a commercial property inside super, contribute a 25% to 35% deposit plus costs, and keep a liquidity buffer in the fund. With the major banks gone, the lender you choose has a large effect on both your rate and your borrowing power, so it pays to compare the specialists. For current figures, the MoneySmart guide to SMSFs is a useful reference.

This article is general information only. It does not take into account your objectives, financial situation or needs, and it is not financial, tax, legal or credit advice. SMSF rules are complex and change often. Speak with a licensed financial adviser, your accountant and an SMSF specialist before acting.