Looking at Hiring Staff? A Caveat Loan Could Perfectly Compliment Government Incentives

By: Aaron Robbins0 comments

Finding the right human resources for your business can take time, but finding funds quickly to put them on doesn’t need to; a caveat loan can be a fantastic finance solution to hiring employees.

Hiring staff can be one of the most pivotal, yet pricey turning points in your business.

The Australian Government understands this, so they’ve introduced a range of funding and incentive programs to assist employers in growing a skilled future workforce.

Some of the incentives can provide your business with payments of up to $20,000 for hiring eligible employees; we lay out how you can use a caveat loan to get a new hire on the books and take advantage of the government incentives.

How can I use a caveat loan to hire staff?

A caveat loan is a business loan that’s secured by property, and can be used for a range of business purposes (including putting on employees).

If this is your first time hiring staff, then the benefits of using short term caveat loans to cover the full costs may not be immediately apparent.

1. You’ll need upfront funds, quickly

Caveat loans are known as fast finance because they can be approved and funded quickly.

Fast caveat loans allow you to effectively unlock the equity in your real estate property to borrow money fast.

Before your new hire can start, there are a range of different costs that your business may have already incurred before which is why accessing caveat lending can be so beneficial.

Cash flow is a major consideration for businesses, so having the finance available to make your business goals come to fruition is made easy with caveat loans.

2. You won’t need to go through a credit check

If this is your first employee, and your business is still in its early growth days, then there is the possibility that your credit rating may not be strong enough to get a traditional bank loan or business loan application across the line.

At DFS, we are a private lender, so we don’t need to rely on your credit file to determine whether we can lend you money.

This makes accessing a caveat loan very attractive for those business owners with bad credit, and is the key fundamental difference between private lenders and other lenders.

In fact, once we’ve assessed your caveat loan application and are confident to proceed with the lending transaction, we can send you a letter of offer the same day that your loan is approved!

3. You won’t need to be repaying back your loan over years

Once your employee is up to speed, you’ll want to be adding the revenue they bring into your business onto your bottom line.

Caveat loans are a short term loan which means you’ll only be repaying the borrowed money anywhere from one month to twelve months.

In fact, our lending criteria is based around setting suitable repayment schedules that are based on an exit strategy for how the loan is to be repaid.

4. You can use government incentives to repay your caveat loan

As we mentioned above, we look to set a viable exit strategy on how you will repay your caveat loan.

Exit strategies are formulated when the lender identifies that there will be sufficient incoming funds in the short term to be able to repay the loan.

Provided you have sufficient equity in your residential property or investment property, you can access sufficient funds to satisfy your caveat loan amount and then repay the loan with any funds received under an eligible government incentive.

Keen to get a quote now? Use our express quote request; it only takes one minute!

An overview of short term caveat loans

If you’re interested to learn more, keep reading as we step through some of the key aspects of caveat lending.

Eligibility for business loans

Caveat loans are a business loan secured by property and therefore are accessible to business owners who own real property with equity.

Please note: We offer fantastic short term caveat loans but cannot offer legal advice about their suitability for your personal circumstances.

It’s important to access any legal or financial advice that you feel your business might need, before making any important business decision.

The security property

The property that you use to secure your short term caveat loan needs to be a property in Australia.

The reason for this is that we cannot use overseas properties as security on caveat loans, due to different legal jurisdictions.

Did you know: caveat loans are available to be established on properties that have an existing mortgage on them?

Regardless of whether it’s a home loan, investment loan, first mortgage or second mortgage, provided you have enough equity in your property value to support your desired loan amount, a caveat loan is possible!

Many clients wonder “how are caveat loans secured using property with a mortgage over it”?

The answer lays in how we register our lender’s interest on your property.

To establish a caveat loan, a legal caveat is registered on the property title deed, which effectively sits behind any home loan, or mortgage, including a second mortgage.

The legal caveat disallows any other transactions (such as a change of title ownership or sale) without first notifying the caveat lender.

Caveat loan amounts

You may be surprised to learn that you can access up to 75% of your property value (if you own your property outright) or 75% of the equity you hold.

Caveat loan terms

Our caveat loan terms range any where from one month to twelve months, but at DFS, we are happy to work with terms relevant to your unique needs and can extend our terms past twelve months if need be.

Interest rates

Diverse Funding Solutions is proud to offer market leading interest rates on our caveat loans and second mortgages, starting at a low 0.77% per month!

Just as with home loans and other loans, your final caveat loan interest rate will vary depending on a range of factors, and will be discussed with you throughout your loan application.

Good to know: We also pride ourselves on being transparent and upfront with the fees on our caveat loans, so you can be confident there are no hidden fees when you get a caveat loan with Diverse Funding Solutions.

Minimal documentation required

Bank loans and other loans often come with a mountain of paperwork required in order to submit your application.

The caveat loan process with DFS is not like other loans; we offer a hassle-free process, with minimal documentation required.

While there may be property valuations required, we don’t need to access your tax returns, revenue forecasts or even your credit file when you apply for a caveat loan.

Most times, a mortgage statement (regardless of if it’s in arrears) and a few other pieces of information are sufficient for us to be able to start processing your caveat loan application.

Fast approvals

Part of the reason we can offer approvals as quickly as 48 hours is because we have minimal paperwork required and don’t need to wait for credit checks or formal property valuations most of the time.

Other lenders may take weeks or even months to offer you a pre-approval — check out our case studies to understand just how quickly we can approve your caveat loan.

Government incentives for hiring staff

By now you may be curious as to what government incentives there are available for your business when you are looking to hire staff.

While there are a number of funding and incentive programs for employers, one of the most attractive is the Wage Subsidy program, which offers businesses up to $10,000 to hire new staff.

In Queensland, the Back to Work scheme offers up to $20,000 in support payment for eligible employers!

There are of course eligibility conditions, however if you are approved, payments can start in as little as four weeks, and you may receive up to 40% of your subsidy on the first payment.

Some of the subsidies end on June 30, however, you can arrange a wage subsidy agreement for a new eligible employee within 12 weeks of their start date!

This is why accessing any financial incentive or subsidy can prove to be well-matched with a caveat loan.

If you’ve recently hired, or are about to hire a new employee, the fast turn around time that we offer as a private lender for caveat loans means you can get the funds you need urgently, to apply for a wage subsidy prior to the end of the financial year and repay the caveat loan just as quickly once your subsidy money comes in.

This is a smart solution for business owners who don’t want their cash flow to be impacted while they spend time away from their business hiring and training a new employee.

Ready to apply for a caveat loan with Diverse Funding Solutions?

Diverse Funding Solutions are here to help your business evolve, and if an employee is the next step in your business evolution, then simply fill in your details to obtain a quote, a call back or get in touch with us directly.

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