SMSF – Borrowing And Limited Recourse Borrowing Arrangements

The explanation covers the restrictions on borrowing money to buy an asset for an SMSF, with limited recourse borrowing arrangements being an exception. Such arrangements allow the fund to borrow money while protecting the other assets if the loan defaults. However, failure to comply with the rules can have severe consequences, such as fines and potential losses. On the other hand, adhering to the regulations and seeking advice from an SMSF professional can help make limited recourse borrowing arrangements work for the fund.