Fast Caveat Loans: What They Are & How They Benefit Businesses

By: Aaron Robbins0 comments

Fast caveat loans have been making a name for themself within the business community. Not only are they funded fast, but they are flexible, meaning that no matter what size of business or industry you operate in, if you require urgent funding, then a caveat loan could be a suitable solution.

If you’d like to know more about what fast caveat loans are and how they benefit Aussie businesses, read our brief guide below.

What is a caveat loan?

A caveat loan is one of the many types of business loans available on the market. Generally offered by private lenders [link to article about benefits of working with a private lender], caveat lending using a property owned by the business owner as security for the loan.

Unlike a second mortgage, a caveat loan secures the property by placing a legal caveat over the title deed of the property while the loan is active. This means that a caveat loan doesn’t interfere with any existing mortgage on the property, as the caveat sits behind the mortgage.

How could a caveat loan benefit my business?

The flexibility of caveat loans is the main benefit for businesses — as they can provide a lump sum of funds, quickly and easily, to suit almost all business purposes.

  • Improving cash flow or working capital.
  • Renovations.
  • Purchasing inventory.
  • Paying of ATO tax debt or performing a debt consolidation.
  • Hiring staff.
  • Expanding the business.
  • Purchasing equipment.
  • Almost any other business requirement!

How are caveat loans superior to other business loans?

There are many reasons why numerous business owners believe that caveat loans are superior to other business loans.

1. You don’t need to pass a credit check to get a caveat loan

Most business owners have been hit with tough times at some point in their business ownership journey (or personal life). Especially after the upheaval that the COVID-19 pandemic caused, many Aussie businesses are getting back on their feet and keen to grow, but are being held back by a tarnished credit history. The strict lending criteria imposed by traditional lenders and banks can put business finance out of reach for bad credit borrowers.

One of the drawcards for using private lenders for caveat lending is that they usually don’t rely on credit checks to assess your caveat loan application! Instead, an exit strategy is devised and then a repayment schedule, to detail your capacity for repaying the loan. This is the fundamental difference between caveat finance and other business finance solutions.

2. Short term caveat loans are just that — short term!

Taking on a further financial commitment in your business doesn’t need to feel like a financial life sentence. Caveat loans are a short term business loan, generally offered between one month and 36 months (hence often being referred to as a short term caveat loan). This means that you can rest assured that you have the funding you require, but won’t be tied down for a decade repaying the loan.

Some other loans for businesses can have a minimum loan term of 3 – 5 years!

3. Urgent caveat loans are funding quickly

Things move fast in the business world. Taking advantage of business opportunities often calls for funds to become available just as quickly. Thankfully, an urgent caveat loan can be funded in as little as 24 hours. In fact, the settlement time for caveat finance through Diverse Funding Solutions is typically between 1 and 3 days.

We probably don’t need to remind you just how long banks and other lenders can take to process bank loans.

4. Minimal documentation

Forget the mountain of loan documents typically required to arrive at loan approval, another benefit of private finance over traditional finance is that financiers require minimal documentation to get your caveat loan application process underway — just a mortgage statement, rates notice and your identification.

Caveat loans explained further

Loan amount

Your caveat loan amount will depend on your business needs and how much equity is available within your real estate property. At DFS, we can access up to 80% of the equity sitting in your property value, meaning that you can access caveat finance between $10,000 and $10,000,000.

Interest rates

Interest rates are a hot topic at the moment, in both traditional and private lending. At DFS< we offer some of the most competitive rates in the private lending space. Interest rates on a fast caveat loan through Diverse Funding Solutions start at just 0.77% per month.

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How are caveat loans secured?

Regardless of whether there’s a registered mortgage on your property or not, the lender’s interest is registered on your property by placing a legal caveat on the title deed. The caveat is lifted once the loan balance is repaid in full — you simply can’t effect a property sale while the caveat is active.

The security property can be a residential property or commercial property — provided there’s sufficient equity, it can be used to support a caveat loan!

Flexible repayment schedules

We work with you to devise a repayment schedule that suits your unique cash flow and business structure.

Bad credit caveat loans are available

Private lending means property owners with a bad credit history can still access the funds required to spur business growth. Avoid finance problems of traditional lenders, get money fast and fund a business opportunity.

How to access caveat business loans through Diverse Funding Solutions

To find out more about how a caveat loan could benefit your business, talk with our specialist team at Diverse Funding Solutions. We have access to over 200 of Australia’s top private lenders, and have helped hundreds of Australian businesses get fast funds to support their business needs.

Make a quick enquiry or get a free express quote today.

There are no credit checks and no upfront costs — just excellent lenders, excellent service and excellent caveat loan interest rates.

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