SMSF Property Loans › What is a Limited Recourse Borrowing Arrangement?

What is a Limited Recourse Borrowing Arrangement?

A Limited Recourse Borrowing Arrangement, or LRBA, is the legal structure required for an SMSF to borrow. If the fund cannot repay, the lender recourse is limited to the single property held in the arrangement, protecting the rest of the fund.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

The LRBA is what makes SMSF borrowing possible and contains the risk. By ring fencing the loan to one property, the rest of the fund assets are shielded if something goes wrong. It is also why each property needs its own arrangement. The structure is technical, which is why professional advice is essential before setting one up.

The key points

The required legal structure for SMSF borrowing.
Lender recourse is limited to the single property.
It protects the rest of the fund.
Each property needs its own arrangement.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.