SMSFs are expected to remain in the spotlight in 2025 as investors continue to favour property, spiking demand for SMSF lending – particularly for commercial purchases. This presents an immediate and ongoing opportunity for brokers to facilitate finance to this growth sector.

Why are SMSFs a Focal Point for Australian Investors?

One of the key drivers behind the rise of SMSFs is the desire for higher returns and more control over personal finances. In a Studies, it is highlighted that more people are seeking to take control of their superannuation. Many Australians now prefer to manage their life savings themselves rather than entrusting them to someone else.

SMSF Benefits: Flexibility and Tax Advantages

The benefits of SMSFs are clear, particularly when it comes to flexibility and control. Business owners who are also tenants can purchase their business property through an SMSF, which offers various tax advantages. Members of an SMSF can borrow up to 80% of the value of residential property and up to 70% for commercial property within the fund. This arrangement allows individuals to make investments that are in line with their goals while also providing substantial tax benefits down the track.

Rules and Restrictions on SMSFs However, there are rules to be mindful of when managing an SMSF. Funds can only be used for investment purposes, and they cannot be accessed for personal use until retirement age. This is a crucial aspect of managing an SMSF, as it requires discipline and a long-term view.

Property Investment Through SMSFs

The use of SMSFs for property investment is particularly popular among self-employed individuals. Matrix Capital Management notes that many self-employed clients are using SMSFs to purchase business premises and rent them back to themselves. This arrangement allows them to manage their investment while building equity for their retirement, rather than paying rent to someone else.

Navigating the Challenges of SMSF Loans

Its best to note that SMSFs can be more complicated than standard residential transactions. Brokers must have a solid understanding of the SMSF setup, including the roles of the borrower and the titleholder of the property. Interest rates on SMSF loans are often higher than standard loans, and the paperwork involved can be extensive, making the process time-consuming. Brokers may shy away from SMSFs because of the complexity and the high level of documentation required. Moreover, SMSF loans tend to be harder to refinance due to the high setup costs, making them a more challenging product for brokers to manage.

Weighing the Pros and Cons of SMSFs

SMSFs are an attractive option for Australians looking for more control and flexibility in managing their retirement savings. While they offer significant benefits, including tax breaks and the ability to borrow within the fund, they also come with regulatory complexities and risks. Brokers who work with SMSFs need to be well-versed in the structure and requirements to ensure they provide the best advice and support to clients seeking to manage their superannuation in this way.

At Matrix Capital Management, we specialize in flexible credit solutions to help you scale in 2025. Here’s how we can support you:

Our Offerings:

1st Mortgages: $500k - $5,000,000 | <80% LVR | Rates from 9.95% p.a.

2nd Mortgages: $400k - $1,000,000 | <80% LVR | Rates from 1.50% p.m.

Key Benefits:

Loan terms: 3-24 months

Unlimited cash-out for commercial purposes

Capitalised Fees and Interest for better cashflow

Asset-based lending with no serviceability tests

Broker commission paid directly to broker at settlement

Loans greater than $5m considered

Because we control credit and source funding, we help directly with your credit scenario without the need of a back-and-forth credit bureaucracy! Let’s talk about how we can grow your business goals this year. Feel free to reach out. See our product sheet below. 

Contact us today on [email protected] or visit our website www.matrixcm.com