Melbourne-based credit specialist fund manager La Trobe Financial has introduced a loan facility for SMSFs looking to implement limited recourse borrowing arrangements (LRBA) to acquire fund assets.
The loan is being made available to clients with an associated interest rate of 5.6 per cent.
“We are pleased to be in a position to offer such a competitive product to the SMSF market. La Trobe Financial has always strived to produce competitive products meeting our clients’ needs,” La Trobe Financial chief investment officer Paul Wells said.
The driving force behind the establishment of the new product was the continued growth of the SMSF sector and the boost in confidence surrounding superannuation in general since the new federal government was elected.
“With the recent election and both parties now promising to leave superannuation alone is good news. Labor’s commitment for five years and the coalition’s for no adverse changes for the first parliamentary term places more certainty back into the system,” La Trobe chief executive Greg O’Neill said.
“Moreover, SMSFs have low exposure to residential property of around 3.2 per cent according to ATO (Australian Taxation Office) figures recently released, which hardly constitutes a bubble.”
La Trobe recognised a number of advantages for SMSFs using gearing strategies via an LRBA, including the ability to acquire property for greater than the fund’s net worth and the potential to avoid paying capital gains tax on the sale of the property if the asset was held for more than one year.