You can't lend money or provide direct or indirect financial assistance from your fund to a member, or a member’s relative. For example, you can't use fund assets to guarantee a personal loan for a member.
Loans made by your SMSF must be in the best interests of members and comply with your investment strategy. If a loan arrangement is not in your members' best interests, your SMSF could be made non-complying and ineligible for concessional tax rates.
Get advice before entering into loan arrangements. If you still decide to lend money from your SMSF, make sure the loan is conducted on a commercial, arm's length basis.
Remember, you are ultimately responsible for running your SMSF.
See also:
You can't lend money or provide direct or indirect financial help from your fund to a member, or a member’s relative. For example, you can't use fund assets to guarantee a personal loan for a member.