How to write SMSF loan applications with Pepper Money
Are you looking for a way to help your clients use their super funds to buy property?
Whether it’s for commercial or residential investment purposes, a SMSF loan could offer an opportunity for clients looking to invest in their retirement.
A self-managed super fund loan lets your clients use their SMSF funds for a deposit to buy a commercial or residential investment property and borrow the balance.
But writing SMSF loans can be tricky if you don’t have the right knowledge, support, and tools. Siobhan Williams, our Head of Mortgages - Retail Broker, shares some of her insights and tips on SMSF lending.
What is the size and opportunity of the SMSF market in Australia?
According to the ATO, as of November 2023 there are over 600,000 SMSFs in Australia, with 1.1 million members and $890 billion in assets.
The top assets held by SMSFs are listed shares, term deposits, and property.
This means that there may be an opportunity for you to work with your clients and review any existing SMSF loans to identify if there may be interest rate savings to be had.
Siobhan Williams says: “A lot of these bank SMSF loans may be sitting around that 9.00% p.a. 10% p.a. maybe even 11% p.a. And I think when you look at the potential interest rate savings for clients, I want to take a moment to reflect on the size of opportunity in market.”
Tips for brokers who want to write SMSF loans for the first time
Siobhan Williams shares her top three tips for brokers who want to write SMSF loans for their eligible clients for the first time:
1. Build relationships with the client’s key financial contacts
It’s likely that you'll need to work with the client's accountant and financial planner. They’ll advise your client if their SMSF loan will comply with legislative requirements and meet their goals and situation.
So having a relationship with these key contacts may be able to help you generate further referrals and leads for SMSF lending opportunities.
2. Get to know your Pepper Money BDM
Take the time to get to know your Pepper Money BDM and reach out to them for any support or guidance you need. They can help you with the application checklist, the documentation required, and the process of writing Pepper Money SMSF loans. They’ll also be able to point you in the right direction for webinars and other resources that might help you grow your knowledge of the SMSF space.
3. Don’t shy away from the opportunity
You shouldn’t be afraid of writing SMSF loans. These could add value to your clients and your business. Siobhan Williams says:
“Don’t shy away from the amount of value you can potentially add to this huge pool of existing established SMSF loans at potentially high interest rates. That’s a significant pie that I would absolutely suggest that you make a run at.”
There may be opportunities to refinance existing SMSF loans or to help new clients set up their SMSF loans.
What are the features and criteria of Pepper Money’s SMSF loan product?
Pepper Money launched its SMSF loan product after consulting with brokers and partners in the market. The product offers flexible lending criteria, and fast turnaround times. Siobhan Williams says:
“We saw a gap in the market. We consulted with some brokers and partners that we knew were writing volume in this space. And we developed a product over time with their feedback.”
Smart policy features of our SMSF loan products
No liquidity requirements
Up to two redraws per year
Up to $3 million in limit
How can you write SMSF loan applications with Pepper Money?
Our SMSF loan product is for corporate trustee SMSF borrowers only.
If you want to write SMSF loan applications with us, you can access a range of support and tools from us, such as:
Our broker website
Chat to us
Get Pepper Money accredited
Our online accreditation will arm you with the right knowledge to help you write Pepper Money SMSF loans.
The process is simple - a questionnaire that covers the key areas that you need to know to write Pepper Money SMSF loans. The answers to the questions are available in the product guide and the FAQ sheet, which you can refer to.
We’re here to help
Our Super Smart approach to SMSF lending could help you and your clients achieve their goals.
SMSF product is for corporate trustee SMSF borrowers only.
All Applications are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply.
Information provided is factual information only, and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. We recommend that independent financial and tax advice is obtained.
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©Pepper Money Limited ABN 55 094 317 665; AFSL and Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans. Pepper and the Pepper Money logo are registered trademarks of Pepper Group Assets (Australia) Pty Limited and are used under licence.
