Get Your Business Sorted for EOFY With a Caveat Loan

By: Aaron Robbins0 comments

If you feel like you’re dragging your feet towards the end of the financial year, let us show you how a caveat loan can put a pep back in your business step and have you striding towards June 30.

Caveat loans aren’t just a solution for those with an urgent funding need; savvy business owners often use them as part of their business strategy, especially when it comes to making the most out of the final quarter.

In amongst your end of financial year preparations, this year should be the year you consider how a caveat loan can get your business sorted and put you in good stead for FY2023’s kick-off.

Curious as to how? Our guide below gives you the details.

Using short term caveat loans

Caveat loans work by releasing equity in your home to fund a range of business purposes.

Also known as fast caveat loans or short term caveat loans, caveat loans are a business loan and therefore suit business owners who also own property.

In every business’s lifecycle, there are many times where injections of cash flow are needed, or opportunities arise that need urgent funding.

Caveat loans are an ideal solution for this as they require minimal paperwork, come with a hassle-free and straightforward application process, and can be approved in as little as 48 hours.

In fact, caveat loans settle faster than most other loans in Australia!

Provided you have sufficient equity in your security property, you can access funds quickly to get your business sorted for end of financial year.

The EOFY opportunities that fast caveat loans make possible

Many businesses use the approach to June 30 as a way to plan ahead in order to secure their cash flow position and minimise tax liability for the current and incoming financial year.

You can join the crowd with a caveat loan at the ready!

Temporary Full Expensing

One of the support measures introduced by the Government to assist with COVID’s wrath upon small businesses is the temporary full expensing scheme.

What this means for your business is that, if you fit the eligibility criteria, you can claim an immediate deduction for the business portion of a new (or used) asset’s cost in the first year that it was used or installed ready for use (provided the use was a taxable purpose).

It probably goes without saying that reducing the amount of tax that your business is required to pay puts more back in your bank account and therefore has a positive impact on your cash flow.

The ability to claim these deductions as a lump sum creates enormous tax incentives for Australian businesses.

There is also currently no limit on how many assets you can claim, which means that you could potentially claim all of the assets that you’ve purchased in the financial year!

Provided your business turns over under $50 million per year, you can claim the full amount of new and used assets.

If your business turns over more than $50 million but under $5 billion, you can claim a full deduction on only new assets.

Eligible Assets

If you’ve wanted to upgrade your equipment or even replace your entire vehicle fleet, you’ll be pleased to learn that the eligible assets under this scheme are those that come with a limited life expectancy and are expected to depreciate in value over time.

Equipment, tools, office gear, as well as business vehicles and commercial vans are all assets that you can claim an immediate tax deduction on, but these items do come with hefty price tags – which is where a Caveat Loan can help!

By accessing the unused equity in your home or investment property, your business can gain the funding it needs to not only upgrade its equipment and thus invest in its future, but also obtain an immediate deduction for them.

We know that there’s not much time left to buy new or used assets for your business, which is why we’re proud to offer fast finance for caveat loans, thanks to our hassle-free application process.

You can request an express quote now; simply fill in your details.

Make the most of EOFY discounts

Another benefit to buying new or used assets for your business at this time of year is the end of financial year sales that are on offer by both retailers and wholesalers.

Whether retailers and wholesalers are discounting for stocktake, to make way for updated models, or simply to boost their bottom line for the financial year, you can use a short term caveat loan to get the best bang for your buck (and potentially claim an immediate deduction on the item, too).

One business’s efforts to reduce it’s stock for stocktake is another business’s golden opportunity for growth!

Make plans for Growth

Speaking of growth, what better time of year than to look at how you plan to grow your business in the upcoming financial year.

Growth initiatives are crucial to business success, but do require sufficient funding, which is how a caveat loan can spur you along your journey.

Whether it’s a marketing activity or renovating your premises, caveat lending can get you the funds you need to bloom.

Hire more staff

If part of your growth initiative requires more staff, or is to invest in more staff, then you might be surprised to know that short term business loans are often used to secure pivotal people resources.

We know that the new hire will improve your bottom line, but it will take a while, which is why a loan over the short term can bridge that gap.

Caveat Loans Explained

The benefits of accessing a caveat loan to help prepare for your business for EOFY success are made obvious, but perhaps what isn’t is how caveat loans work.

Let us give you a high level overview:

How are caveat loans secured?

Caveat loans are secured by placing a legal caveat over your property’s title deed.

This means that we do not need to gain the permission of any existing mortgage lender before using your property’s equity for a short term business loan.

Once our lender’s interest has been registered on the property, we can release equity via a caveat loan!

The real estate property that is used for security has to be in Australia, though, as we cannot accept overseas properties as security.

Flexible Lending Criteria

Private lenders such as us at Diverse Funding Solutions are able to separate ourselves from the rigidity of traditional lenders.

We don’t run credit checks when you lodge your caveat loan application, which means that business owners with bad credit are still able to invest in their business’s future.

Instead of running a credit check and relying on your credit file, we simply need to have a suitable exit strategy (such as a property sale) and set up repayment schedules to set out how the loan will be repaid.

We do this all while operating under an Authorised Credit Representative of an Australian Credit Licence, giving you the confidence you need to get a caveat loan through a reputable private lender.

Attractive Interest Rates

Our interest rate for caveat loans starts at a competitive 0.77%pm.

You could save interest compared to other loan types available on the short term business loan market!

Short Loan Terms

The loan term for our caveat loans is usually up to 12 months.

We are happy to work with your business to find the right loan term for your unique set of circumstances, though.

Loan Amount

You can access 75% of your property value if you own the property outright, or 75% of the equity in your property if you have a registered mortgage or second mortgage attached.

Super Fast Approvals

Many lenders have an extended application time for business loans and other loan products such as home loans, often needing you to complete a pre approval application, which can cost you time and money.

No pre-approval is needed when you get a caveat loan through Diverse Funding Solutions.

There is also no need to look at your mortgage statement, revenue forecasts, obtain a formal property valuation or even refer to your credit history, which is what makes our processing times so efficient.

Different to second mortgages

A second mortgage and a caveat loan are actually different loan types, and thus work differently.

There is more than one fundamental difference between the two.

Get ready to apply for a caveat loan

Property owners who are in business are increasingly looking towards caveat lending as the game changing solution to their business finance needs.

Here are some starting points to get you ready to apply for a caveat loan:

  • Forget what you know about bank loans, private lenders follow a different loan process from other lenders — we’re here to work with you.
  • Get the legal or financial advice you need before applying, if you need it.
  • Allay any concerns about upfront fees or hidden fees; we’re all about transparency.
  • Take a look at your property value and subtract the outstanding mortgage balance to know how much you can access.
  • Prepare yourself for excellent customer service from the Diverse Funding Solutions team.

To get the most out of your end of financial year preparations, contact our team today to see how a caveat loan can get your sorted for success.

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