“The only issue with the banks pulling out of the SMSF lending landscape is that it didn’t happen soon enough,” Mr Murphy said.

“Their processes were clunky in residential, and dismal in commercial assets. Non-bank lenders pioneered this space and did it far better with specialist assessors making it easy to work with, faster turnaround times, and far less complicated document and legal processes. 

“The non-banks got it from day one. It took years for the banks to get it, and even then when you found someone that understood it, they’d move on or get pushed into another division by the time you wrote a couple of loans with them. 

“The space has become a lot more efficient since the bank exodus, and now in 2021, the price point for the non-banks has become a lot more competitive.”

With the property market performing well compared to other asset classes, Mr Murphy said he is also seeing increased appetite from SMSF loans for the property market that is strongly trending in the area of SME properties this year.

“The main shift I have noticed is small businesses acquiring their business premises. The residential front is still largely focused on new dwellings, be it townhouses or apartments with high rental yields,” he said.

“I think the product is best designed for small businesses to acquire commercial real property. 

“It is a win-win for business owners who are already paying rent to be able to own their premises and that expense their business will incur is still going into their future.”

Mr Murphy said the perspective from the residential side is still active, but it is the same story for most borrowers wanting to get into the investment property market and have exhausted their personal borrowing power, “so they turn to their SMSF to add that extra property without any material change to their personal finances”.

“It is still a very strong model for the right borrower, but it is certainly not suitable for everyone though,” Mr Murphy said.