SMSF lending money ?


Okay - we've discussed about self managed funds borrowing money to invest in things like property... but what about them lending money as an investment itself ?

Can SMSF money be "invested" in private mortgages ? For example, you know of someone needing funds to complete a project - and they are willing to pay good interest in return for a medium term loan (a couple of months to a couple of years). Do the rules allow this type of investment ?

Probably a lot safer than sharemarket investments right now !

Thougths ?
Yes money can be invested on interest bearing investments as long as it is an arms length transaction.

You do need to insert the relevant section in the trust deed to ensure that class of investments is one of the aims of the trust.