Australia’s SMSF Borrowing Reset: How Excel Funding Group Is Redrawing the Map After the Residential LRBA Ban

For nearly two decades, a quiet mechanism allowed Australians to do something the superannuation rulebook otherwise forbids: borrow money inside their retirement fund. Introduced in 2007 and expanded in 2010, the limited recourse borrowing arrangement, or LRBA, let a self-managed super fund purchase a single asset, most often a residential investment property, with the lender’s recourse confined to that asset alone.

In June 2026, that door began to close. As part of a broader tax package negotiated through the Senate, Federal Parliament passed an amendment prohibiting self-managed super funds from entering into new LRBAs to acquire residential property. The change received Royal Assent on 26 June 2026 and commenced on 10 August 2026. It is strictly prospective: existing loans are grandfathered and may be refinanced, contracts exchanged before commencement remain valid even if they settle afterwards, and borrowing for business real property, such as commercial premises, continues under the existing rules. The Treasurer has described self-managed funds as less than one per cent of total residential property borrowing, and industry estimates put the affected cohort at roughly 8,000 to 10,000 funds nationally.

The reform has been divisive. Industry bodies criticised the speed and the absence of consultation, and some lawyers argued that cutting SMSF access to new dwellings does nothing to help housing supply. Whatever the merits, the practical effect is immediate: a category that generalist brokers already misunderstood has become materially more technical, and the margin for error has narrowed to a calendar date.

Excel Funding Group, a Sydney-based mortgage management firm that launched in late 2024, has spent its short life building precisely the kind of specialist capability the new environment rewards.

“I had a conversation with an accountant who was turning clients away, telling them SMSF property was dead,” said Henry, Head of Credit at Excel Funding Group. “That was wrong before the reform and it is still wrong now. What changed is the detail: which property qualifies, which deadline applies, what happens to an existing loan. Getting that detail right is now the entire value of a specialist.”

The distinction the market is missing, according to Excel Funding Group, is that the ban is narrow. It removes new residential borrowing only. A trustee who exchanges contracts before 10 August 2026 can still complete a residential purchase under the current rules. A trustee buying commercial or business real property is unaffected. And a member with an existing residential LRBA retains it, including the ability to refinance to a more competitive lender, a point that matters as some providers signal an intention to exit the space and repricing risk rises.

The typical Excel Funding Group borrower, according to the company, is in their 40s, has accumulated a meaningful super balance and is seeking greater control over how those funds are invested, often after a period of market volatility in equities. Patrick, who leads the firm’s client and broker relationships and has worked with self-managed super funds since 2011, says the reform reshapes the timeline rather than removing the strategy: residential purchases now run against a hard deadline, while commercial and business real property acquisitions remain a continuing avenue inside super.

Excel Funding Group also operates a broker channel, providing specialist SMSF credit support to mortgage brokers who lack the expertise to assess these loans independently. The company’s founders say the reform has increased the volume of deals arriving through that channel where a generalist has quoted an incorrect loan-to-value ratio, misclassified a property type, or misjudged whether an arrangement can realistically complete before commencement.

“Brokers are bringing us deals that turn on a single question: is this property residential, and can it be exchanged in time,” said Patrick, Head of Sales Excel Funding Group. “Get that wrong and the client loses a deposit or misses the window entirely. That is the assessment we do in-house, same day, every time.”

Whether Excel Funding Group’s growth, from $2.7 million in first-quarter lending to over $9 million monthly within a year, survives the loss of the residential pipeline will depend on how effectively it pivots toward business real property and the servicing of grandfathered loans. But the underlying thesis is arguably stronger after the reform than before it: in a market where the rules have just changed and most advisers have not caught up, the value of a lender whose only business is getting the detail right has rarely been higher.

Source: Excel Funding Group