Commercial
Commercial Property Finance: Personal Name, Trust, or SMSF
Commercial property finance is a structural conversation before it is a rate conversation. The decision of whether to acquire a commercial asset in personal name, in a trust, or via a self-managed superannuation fund through a Limited Recourse Borrowing Arrangement determines almost everything that follows: the LVR available, the rate band, the asset-protection position, the tax treatment of income and capital, and the exit liquidity. Choosing the wrong wrapper at the start is one of the few structural mistakes commercial property finance does not easily forgive.
Why structure matters more than rate
On a commercial loan over a typical seven- to fifteen-year amortisation, a 0.30% rate differential is meaningful. A poorly chosen ownership structure that doubles the effective tax on net income, restricts which lenders will fund the asset, or constrains the exit options is generally more meaningful again.
The four primary structures used to acquire commercial property in Australia each carry different lender appetite, rate band, and tax position. The right choice depends on the buyer's existing entity structure, income position, asset-protection needs and intended hold period.
Personal name purchase
Acquiring commercial property in personal name is the simplest structure. Lender appetite is broadest, documentation requirements are relatively standard, and rates are usually competitive within the commercial property segment.
The trade-offs are visible. Income from the property attaches to the borrower's personal tax position at the marginal rate. Asset protection is minimal: a personal-name commercial property is exposed to personal creditors. Estate-planning flexibility is constrained. The structure works best for owner-occupiers (where the buyer's business will operate from the property) and smaller-scale acquisitions where the trade-offs are bounded.
The structure decision is the rate decision, the tax decision, the asset-protection decision and the exit decision, all at once.
Trust ownership
Acquiring through a trust (most commonly a discretionary trust, sometimes a unit trust) provides a middle ground. Net income can be distributed across beneficiaries to manage tax position year by year. Asset protection is improved relative to personal name. Estate planning is more flexible.
Lender appetite for trust commercial lending is narrower than for personal name. Around half of the residential lender panel decline trust applications outright; the commercial panel is broader but more selective. Personal guarantees from beneficiaries are typically required. Rates often carry a small premium relative to personal-name commercial lending, depending on lender and structure.
SMSF via Limited Recourse Borrowing Arrangement
A self-managed superannuation fund can borrow to acquire property, but only through a Limited Recourse Borrowing Arrangement (LRBA). The LRBA structures the loan so the lender's recourse, in the event of default, is restricted to the property itself. The fund's other assets are protected.
The structure is widely used for commercial property in particular, because the SMSF can lease the property to a related-party business at arm's length commercial rent, generating tax-effective rental income inside the super fund. Capital growth on the property accrues to the fund at the concessional super tax rate.
Typical 2026 SMSF commercial lending parameters:
- Deposit: typically 30% to 40% of the property value. SMSF lenders rarely fund higher LVRs.
- Rate premium: SMSF loan rates often run 0.5% to 1.5% above standard investment lending, subject to lender criteria.
- Minimum fund balance: lenders commonly require $250,000 or more in SMSF assets before considering an LRBA.
- LVR by asset class: commercial property LVRs typically range 65% to 75% depending on the asset (industrial, retail, office) and tenant covenant.
- Liquidity buffer: lenders are increasingly requiring evidence of a post-settlement liquidity buffer of around 5% to 10% of the asset value, to cover unforeseen costs and maintain LRBA integrity.
The 2026 liquidity question for SMSF
The most material change in SMSF commercial lending through 2025 and into 2026 is the increased lender focus on post-settlement liquidity. Where lenders historically focused on deposit and rental servicing, they are now scrutinising whether the fund retains adequate cash reserves after settlement to absorb shocks: vacancy, capital expenditure, regulatory change, contribution caps.
Practically, this means an SMSF that scrapes through the deposit but settles with very little remaining liquidity is now less likely to be approved. The fund's cash position after settlement is now part of the lending decision, not just the position before.
The total assets held under SMSF LRBAs reached more than $75 billion as of September 2025, up from $53 billion five years earlier. The structure is widely used; it is also more closely supervised than it has been at any point in its history.
How Maxfin briefs commercial property lending
The firm starts with the buyer's overall structure and tax position. The commercial finance recommendation flows from that, not the other way around. A buyer with an existing trust, an established SMSF, and a profitable operating business has a different optimal acquisition structure to a sole trader buying their first commercial premises.
Lender selection is matched to both the structure and the asset class. A retail strip-shop in a regional centre fits a different lender than a CBD office floor with a blue-chip tenant. Industrial sheds with owner-occupier business tenants fit different appetites again.
Maxfin coordinates with the buyer's accountant before the lending application, particularly for SMSF and trust structures. Errors at the structure stage are reversible only at material cost (transfer duty on a re-acquisition, for example). Errors at the lender stage are reversible by switching lenders. Getting the order right matters.
General information only. Not credit advice and not tax advice. Lending outcomes depend on individual circumstances and are subject to lender credit criteria, terms and conditions. Where tax considerations are described, they are general in nature; advice on a specific tax position should be obtained from a registered tax agent or accountant. Maxfin holds Australian Credit Licence 384406 and is not a registered tax agent.