Specialist lender to offer SMSF loans

RedZed SMSF loans LRBA limited recourse borrowing arrangement

A small business and self-employed-focused lender has announced it will offer SMSF loans for the purchase of residential and commercial properties.

Small business lender RedZed has expanded its offerings to the SMSF sector and will provide loans for the refinancing or purchasing of residential or commercial investment properties.

The firm, which specialises in loans to the self-employed, will offer its Super Resi SMSF and Super Commercial SMSF loans to corporate trustees to allow them to purchase property or refinance an existing limited recourse borrowing arrangement with loan terms ranging from 15 to 30 years.

The Super Resi SMSF offering has a maximum loan size of $2 million with a 70 per cent loan-to-value ratio and $1.5 million at an 80 per cent loan-to-value ratio.

The Super Commercial SMSF loans have a maximum size of $3 million up to a 70 per cent loan-to-value ratio and $2.5 million up to a 75 per cent loan-to-value ratio.

RedZed head of distribution and product Adrian Fisher said the new offerings recognise self-employed people have different cash flow than larger businesses, a situation that can restrict their ability to borrow.

“Self-employed business owners vary in the way they pay themselves and contribute to their superannuation funds, which lending institutions don’t always consider,” Fisher said.

“We felt it was unfair that business owners who sporadically make contributions, or wanted to make additional contributions to their fund to assist with purchasing property, were excluded because of restrictive lending criteria.”

He added for those unable to meet standard income verification for an SMSF loan, RedZed would apply its alternative documentation income verification process.

“We will take a flexible approach to SMSF qualification assessments so that self-employed Australians have the same growth opportunities as everybody else,” he said.

“RedZed truly understands the nuances of being self-employed and we do everything we can to ensure this doesn’t negatively impact our customers’ borrowing power.

“These SMSF products are investment game changers for small business owners. We’re renowned for backing the self-employed, the self-believers and the self-starters. Now we have a greater ability to back the self-investors too.”

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