Limited Recourse Borrowing Arrangement (LRBA)
This diagram shows how a Limited Recourse Borrowing Arrangement works within an SMSF. SMSF members make contributions into the fund. The SMSF enters into an LRBA with a lender to purchase an asset. The property title is held in a bare trust while the loan is repaid. Rental income and contributions support repayments. The lender holds a mortgage over the asset, and recourse is limited to that asset only.

