“Who is actually borrowing, and who is standing behind the loan?”
The answer decides which rules, and whose policy, apply.
When the borrower is a fund or a business, the rules change.
I arrange SMSF, commercial property and asset finance alongside residential lending, for borrowers whose scenario doesn't fit a standard home loan. The rules that apply come from the borrower and the asset, so I check them before the contract is signed. Your accountant, solicitor or licensed adviser covers the tax, legal and superannuation side.
On my booking page, choose “Initial 15 mins phone call”.
Mortgage broker since 2015 · Brisbane-based, working with clients Australia-wide
Credit assistance is not tax, legal or financial product advice. Where your question turns on tax treatment, ownership structure or superannuation law, I work alongside your accountant, solicitor or licensed adviser.
What I check before I approach a lender
The borrower.
A fund, company, trust or individual, and who guarantees the loan.
The asset and how it will be used.
An investment, a business's own premises, or equipment or a vehicle.
For an SMSF: the trust deed and investment strategy.
And whether the purchase fits a single-asset borrowing structure.
Any related-party element.
Whether you, or your business, sit on the other side of the transaction.
The security and its value.
The loan-to-value ratio on the lender's valuation.
Cashflow cover.
Whether the rent or business income covers the debt, as a lender measures it.
Who else is involved.
Your accountant, solicitor or licensed adviser, and what each needs to confirm before I approach a lender.
Policy note
Where these loans get complicated
An SMSF buying from a related party
- The situation
- The fund wants to buy an asset from a member, or from a business connected to a member.
- Why lenders treat it differently
- There is a general prohibition on acquiring assets from a related party, with defined exceptions: listed securities and business real property at market value, and in-house assets provided they stay within 5% of the fund's total assets. Lenders then apply their own policy on top.
- What I do about it
- I don't assume it can't be done, and I don't assume it can. I check the exception being relied on with your accountant or solicitor first, then check lender policy.
Improving the property after purchase
- The situation
- The fund buys a property that needs work.
- Why lenders treat it differently
- Under a limited recourse borrowing arrangement, borrowed funds can't be used to improve the asset. Improvements must come from the fund's own resources.
- What I do about it
- I ask what the fund can pay for from its own cash before we structure the loan.
A business buying its own premises
- The situation
- A business owner wants to buy the premises the business trades from, through a company, a trust or the SMSF.
- Why lenders treat it differently
- The borrower changes which lender policy applies. For an SMSF, the business real property exception covers only property used wholly and exclusively in a business.
- What I do about it
- I map the ownership options against each lender's policy before you decide which entity buys.
Commercial property is judged on cashflow
- The situation
- You are buying or refinancing a commercial property.
- Why lenders treat it differently
- Lenders weigh the loan-to-value ratio alongside a cashflow cover measure, such as interest cover or debt service cover, which compares the income available with the cost of the debt. Each lender sets its own requirements.
- What I do about it
- I explain the measures in plain terms and check the requirements of lenders that suit before you commit.
Equipment or vehicle finance
- The situation
- A business needs equipment or vehicles.
- Why lenders treat it differently
- The asset itself and the business's ability to service the finance both matter, and lenders differ in how they weigh each.
- What I do about it
- I compare structure and terms against your trading cashflow, not only your personal income.
Credit assistance is not tax, legal or financial product advice. Where your question turns on tax treatment, ownership structure or superannuation law, I work alongside your accountant, solicitor or licensed adviser.
Permitted, structured, serviceable
Rules that apply before the lender
Four steps in order: fund and trust deed, borrowing arrangement structure, the asset, then lender policy.
Drawn for an SMSF borrower. A company or trust borrower faces a different set of checks.
Lender policy
For an SMSF, super law and ATO guidance set what the fund may buy and how it may borrow, and the lender applies its own policy on top. For commercial finance, the lender looks at the security and at the cashflow behind the loan.
What that means for you
A purchase can look straightforward on the contract and still fail one of those tests, so I check them in order (permitted, structured, serviceable) before you are committed.
A general example
A business owner wants their SMSF to buy the warehouse the business trades from. The related-party rules allow business real property to be acquired at market value where it is used wholly and exclusively in a business. But the fund's investment strategy, the lender's policy and the valuation all still have to line up. The answer isn't yes or no on the day; it is a checklist.
Worked example: an illustrative scenario, not a client result.
Credit assistance is not tax, legal or financial product advice. Where your question turns on tax treatment, ownership structure or superannuation law, I work alongside your accountant, solicitor or licensed adviser.
Christine’s view
“When the borrower is a fund or a business, the paperwork is only half of it. The other half is knowing which rules apply before the contract is signed.”Christine Junidar
Repayments
It gives a repayment estimate only. An SMSF or commercial application is assessed by the lender on the borrower, the security and the cashflow.
An estimate only, based on the figures you entered and the assumptions listed beside the result. It is not a borrowing limit, a quote, or an offer of credit. A lender will assess your application against its own criteria.
Where to begin
Tell me who is borrowing and what for.
Bring the borrower, the asset and what you're trying to do. I'll tell you which rules to confirm with your accountant or solicitor first, and what a lender will need to see.
I read every enquiry myself and will be in touch to arrange a time to talk.
General information only. It does not take your objectives, financial situation or needs into account. Lending is subject to lender assessment and criteria. This is not a quote or an offer of credit.
Credit assistance is not tax, legal or financial product advice. Where your question turns on tax treatment, ownership structure or superannuation law, I work alongside your accountant, solicitor or licensed adviser.