Flexible self-managed superannuation fund loans increase investment access for millions of small business owners
RedZed, one of Australia’s leading lenders to the self-employed, has entered the self-managed superannuation (SMSF) loan market to help ensure Australia’s 2.3 million small business owners can access a loan designed to meet their unique circumstances.
RedZed has lent more than $8 billion to over 20,000 small business owners over the last 17 years.
RedZed’s innovative alternative documentation (alt doc) income verification options enable more self-employed Australians to unlock the benefits of owning the commercial property they operate their business from, and purchase residential or commercial investment properties.
Additionally, members can make additional contributions to their SMSF and refinance expensive existing SMSF loans.
It RedZed’s market entry is essential given self-employed have often been restricted by lending criteria and invest in property via an SMSF.
This means they are at a disadvantage to the 1.1 million Australian members operating 603,432 SMSFs. Despite the relatively small percentage of Australians with a SMSF, they collectively represent 26% of the $3.3 trillion in super assets – second only behind industry funds.
RedZed’s Head of Distribution and Product, Adrian Fisher, said: “We are incredibly proud to launch our ‘Super Resi SMSF’ and ‘Super Commercial SMSF’ loans.
"Self-employed business owners vary in the way they pay themselves and contribute to their superannuation funds, which lending institutions don't always consider.
"We felt it was unfair that business owners who sporadically make contributions, or wanted to make additional contributions to their fund to assist with purchasing property, were excluded because of restrictive lending criteria.
“RedZed truly understands the nuances of being self-employed, and we do everything we can to ensure this doesn’t negatively impact our customers’ borrowing power.”
Small business owners can use 'Super Resi SMSF' and 'Super Commercial SMSF' loans to refinance existing self-managed super fund loans or purchase residential or commercial investment properties.
“These SMSF products are investment game-changers for small business owners. We’re renowned for backing the self-employed, the self-believers, and the self-starters. Now we have a greater ability to back the self-investors too,” Fisher said.
“We will take a flexible approach to SMSF qualification assessments so that self-employed Australians have the same growth opportunities as everybody else. This 'realistic' approach to assessing all lending applications is a core part of what makes us different from other lenders."
Super Resi SMSF has a maximum loan size of $2 million with a 70% loan-to-value ratio and $1.5 million at 80% loan-to-value ratio.
Super Commercial SMSF loans have a maximum loan size of $3 million up to 70% loan-to-value ratio and $2.5 million up to 75% loan-to-value ratio.
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