Powered by MOMENTUM MEDIA
subscribe to our newsletter

Major bank toughens lending policy for commercial SMSF loans

nab building ad
Miranda Brownlee
25 March 2019 — 1 minute read

From the end of this week, one of the major banks will be introducing stricter criteria for SMSF commercial loans including a minimum borrowing amount of $1.5 million and a requirement for the SMSF to hold at least $5 million in net assets.

From Friday, 29 March 2019, NAB will be introducing changes to its lending policy for SMSF corporate entities as part of an ongoing review of its products and policies.

In order to be eligible for SMSF business lending from this date onwards, NAB customers will need to have an existing relationship with NAB of at least two years and have borrowing needs of $1.5 million or greater.

Advertisement
Advertisement

“An existing relationship is defined as a customer that holds a business lending facility for at least two years. This excludes standalone lease facilities, guarantees or credit cards,” NAB stated.

They will also need to have a minimum of $5 million in total net assets in SMSF.

Customers will also need to meet other credit parameters including:

  • Principal and interest fully amortised over the term of the loan
  • Cash reserves remaining in the SMSF at settlement being the equivalent of 12 months
  • Principal and interest obligations
  • All members of the SMSF must be in accumulation phase when the funding is provided and for the duration of the loan tenor

NAB stated that it will no longer accept new SMSF applications unless all of the criteria are met, but will continue to support existing SMSF lending arrangements.

The major bank said that its decision to change the lending policy was based on the fact that lending to SMSFs “is more complex and requires additional consideration”.

“For this reason, NAB has altered the SMSF offering to ensure our customers are in the best position to obtain their desired financial outcomes,” it said.

Miranda Brownlee

Miranda Brownlee

 

Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Major bank toughens lending policy for commercial SMSF loans
nab building ad
smsfadviser logo

Are you up to date with the legislative changes from 1 July? Contribution cap increases, super guarantees, age increases, SG rate increases. The budget announcement changes. Don’t be caught off guard by your clients’ questions. Prepare for any scenario with the SMSF Foundations course. 21 CPD hours available. Learn more

join the discussion

Latest poll

Do you have clients that are aged 65 or 66 planning to trigger the bring forward rules?

SUBSCRIBE TO THE
SMSF ADVISER BULLETIN

Get the latest news and opinions delivered to your inbox each morning

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.