In simple terms, it shows you the maximum LRBA loan your fund can support, given your current fund balance, member contributions and the property you're considering. The result combines two checks that mainstream SMSF commercial lenders apply: the Fund Coverage Ratio at 1.25 times annual repayment, and an LVR ceiling typically capped at 70% of the property value. The calculator tells you which constraint is binding for your numbers, so you know exactly where to focus if the figure is lower than expected.

In practice, this tool is most useful in the early scoping phase, before you've identified a specific property or before you've committed to making an offer. Importantly, it gives you a defensible borrowing range that aligns with how SMSF lenders actually assess deals, which prevents the common surprise of trustees thinking they can borrow $1M when the fund only realistically supports $650K. Consequently, you walk into property conversations with the right number in your head.

The two tools answer opposite questions. This Borrowing Capacity Calculator starts with your fund's current position, including balance, existing contributions and income, then works forward to the maximum loan available. Our SMSF Contribution Gap Calculator starts with a target property, then works backwards to the contribution commitment required to sustain the loan under the 1.25x Fund Coverage Ratio.

Most serious trustees benefit from running both. Use this Borrowing Capacity Calculator early, when you're scoping what your fund can currently support. Then, once you've identified a specific commercial property, use the Contribution Gap Calculator to stress-test that property against your fund's capacity. Consequently, the combination moves you from generic exploration into specific, actionable planning before you engage a lender.

No. This calculator is built specifically for commercial property under a Limited Recourse Borrowing Arrangement (LRBA). Residential SMSF lending operates under different lender policies, different LVR tiers and different rental shading conventions, so the output would be misleading if applied to a residential purchase.

If you're considering residential property through your SMSF, you'll need specialist advice from a residential SMSF broker because it's a different product category altogether. Commercial SMSF lending, whether for owner-occupier business premises or investment types like warehouse, medical or industrial, is where this calculator applies. That's the scope we specialise in at Smart Business Plans, and the scope this tool was designed to reflect.

The core difference is what goes into the income assessment. In standard commercial lending, borrowing capacity is determined primarily by the property's rental income tested against a Debt Service Coverage Ratio of 1.30x. In SMSF lending, lenders use a Fund Coverage Ratio that combines two income streams: the shaded rental income from the property and the fund's ongoing member contributions. Contributions are counted at 100% with no shading, because they represent committed recurring inflows rather than market-dependent rent.

The practical effect is significant. A fund with two working members making combined contributions of $50,000 per year has $50,000 of full-weight income supporting the loan, on top of whatever the property generates. Consequently, two SMSF funds with identical properties and identical rental income can arrive at very different borrowing limits depending entirely on their contribution levels. The minimum coverage ratio most SMSF commercial lenders require is 1.25 times, which is the benchmark this calculator uses.

The 25% shave on rental income covers the real-world costs that eat into gross rent. These include vacancy periods between tenants, routine maintenance, property management fees and occasional capital expenses. Lenders apply this shading because they're assessing serviceability across the full loan term, not just the opening position. A property generating $60,000 gross annually contributes $45,000 to the Fund Coverage Ratio calculation.

Member contributions are treated differently because they're committed recurring inflows from employment or business income, not market-dependent revenue. Concessional contributions, employer contributions and salary sacrifice arrangements all count at 100%. Other existing fund income, such as dividends or interest from current investments, sits between the two and is generally shaded at 80% where it's consistent and documented. Importantly, the relative weighting of these three income sources is what makes SMSF serviceability analysis fundamentally different from standard commercial assessment.

SMSF lenders carry out a post-purchase liquidity check that standard commercial lenders don't apply in the same way. The reason is specific to how SMSFs work. A fund that depletes itself to fund the deposit has no buffer for a rental vacancy, an unexpected capital expense on the property, or pension payments to members who are drawing down in retirement. Unlike a corporate borrower who can access overdraft or working capital facilities, an SMSF's options in a cash shortfall are limited.

Most SMSF commercial lenders want to see at least $30,000 to $50,000 remaining in liquid assets after the deposit and all settlement costs are paid. Notably, settlement costs include stamp duty, legal fees and the costs of establishing the bare trust required under LRBA rules, which typically add $12,000 to $18,000 above the stamp duty figure. Some lenders require a larger buffer, particularly where members are approaching retirement or already drawing a pension. Consequently, the calculator surfaces post-purchase liquidity as a separate result, because it can be the binding constraint even when coverage and LVR look fine.

SMSF commercial lenders typically offer LVRs between 65% and 70%, which means a minimum deposit of 30% to 35% of the purchase price. Select lenders will consider 75% LVR for well-structured funds purchasing quality assets with strong income coverage, but this is not the standard and shouldn't be assumed at the planning stage. The calculator above applies a 70% LVR ceiling because that's the realistic upper bound across our mainstream lender panel.

Going below 65% LVR is also possible but usually only applies to specialty assets or regional properties where lenders take a more conservative position. In markets like Sydney, where commercial property values have held firm through recent cycles, lenders tend to be more comfortable at higher LVRs than in thinner regional markets. If you want to understand how current conditions are playing out, the Sydney commercial property market report covers lending appetite alongside vacancy and yield data.

Property type affects both the rental income shading applied and the LVR you can access. Industrial, medical and professional office assets generally attract the strongest LVR treatment across our lender panel because lenders see consistent demand and a clean resale market. Furthermore, owner-occupiers buying their own business premises through an SMSF can sometimes access better LVR treatment depending on the lender, because the fund's income from the leaseback arrangement is viewed as more certain than third-party tenancy.

Retail is more variable. Hospitality, childcare and specialty assets often attract lower LVRs and may require a 35% to 40% deposit regardless of how strong the fund's income looks. Additionally, well-tenanted properties with national operators on multi-year leases will be assessed differently from the same building with a small business on a rolling monthly arrangement. The income might look similar on paper, but the lender's appetite and shading treatment can differ in ways that shift your maximum loan by $100,000 or more. Consequently, property selection isn't just about price, it's about matching the asset type to lender appetite.

There are five practical levers worth knowing about, and which one matters most depends entirely on whether coverage ratio or LVR is your binding constraint. Run the calculator first so you know which one you're dealing with. If coverage ratio is the issue, switching to interest-only is often the most immediate move. On a $700,000 loan at 7.50%, the difference between IO and P&I repayments is roughly $14,000 per year, which can move a marginal fund into approvable territory. Our commercial property interest rates page covers the current rate landscape across different loan structures.

Additionally, increasing member contributions counts at 100% in the coverage calculation, so each additional dollar flows straight through. Targeting a property type with stronger LVR treatment helps if LVR is the constraint. Growing the fund balance over 12 to 18 months supports a larger deposit and better post-purchase liquidity. Finally, clearing existing LRBA commitments before taking on a new one has the same amplifying effect as reducing commitments does in standard commercial lending. Before settling on a property, it's also worth running the yield numbers through our commercial property yield calculator alongside this one.

Yes, provided the property qualifies as business real property under the ATO's superannuation rules. Business real property is land and buildings used wholly and exclusively in a business. If your premises meets that test, your SMSF can purchase it and lease it back to your business at market rent, even though your business is a related party. This is one of the few exceptions to the related-party rules that apply to most SMSF investments.

This leaseback arrangement is one of the most compelling uses of SMSF commercial property lending for business owners. Your business pays rent directly into your super fund rather than to a landlord. The rent is deductible to your business and taxed at 15% inside the fund during the accumulation phase, or potentially tax-free in pension phase. However, there are strict requirements around how the lease must be structured. Getting this wrong can expose the fund to non-arm's length income penalties, which are significant. Our SMSF commercial property guide covers the eligibility requirements and how to structure the lease correctly. Book a call if you'd like to run through whether this strategy works for your specific premises.