What Is the Fastest Business Loan?

By: Aaron Robbins0 comments

Things move quickly in life, but if you’re in business, it feels as though the hands of time move even quicker.

When the time comes to access finance, chances are that you need funds quickly.

Searching for the fastest business loan can take even more time, so we’re happy to provide the below guide on the fastest business loan available to business owners — a caveat loan!

Keen to learn more? Keep reading to uncover why caveat loans are renowned as fast finance.

The pain points of traditional business loans available on the market

Just as the business world evolves, so too do the financing options available to Australian business owners.

While some new lending options are available to Aussie businesses, many business borrowers still look to traditional lenders for their business finance needs.

We hear first-hand from our clients the pain points that they’ve experienced when seeking finance through other lenders, particularly when it comes to bank loans.

Difficulty meeting the lending criteria

If you’ve experienced the disappointment and frustration of not meeting the bank’s strict lending criteria based on technicalities, then you aren’t alone.

In recent years, the criteria for lending to businesses have been further tightening.

Even if you don’t have bad credit, many lenders in the banking sector deny applications for business borrowing due to the business not ticking every criteria box.

Common feedback from those who’ve gone down the bank loan path is that banks tend to favour established businesses over start-ups and often are more likely to approve loans for operational businesses.

This is largely due to being able to assess productivity, perform a credit check and verify the profitability of operational businesses.

The reality is that many businesses capable of reliably repaying a loan won’t fit the stringent requirements on paper for a traditional business finance application.

Processing fees

The other common pain point with a traditional loan for business is the application fees.

Some business owners are disheartened to learn that they are charged upfront fees simply to apply for a short-term business loan or another loan for business purposes.

Working with DFS for your business financing needs means full transparency and no hidden fees! 

High interest rates

Interest rates are currently the highest they’ve reached since July 2013.

Traditional lenders are renowned for charging a higher than standard interest rate for commercial finance, particularly for businesses that operate in a seasonal industry, new businesses, or those with a poor credit history.

Drawn out application process

If you cast your mind back to when you applied for your home loan, you may have fond memories, but you’ll undoubtedly recall the lengthy application process.

Property buyers understand that many lenders need to run credit checks and request a complex web of information to process home loans such as a first mortgage.

However, did you know that this can be even more challenging when lending for a business purpose?

Banks and credit unions have long been the go-to institutions for business loans, but their application processing times can feel like they’re stuck in the past.

Private lending is an attractive alternative for businesses that don’t fit the traditional lending mould.

The private lending difference

There is a fundamental difference between private funding and other lenders — the flexibility and hassle-free process!

Private lending doesn’t rely on your credit file and a multitude of checkboxes to be able to authorise a lending transaction.

Instead, your specific needs and circumstances are considered, and suitable loan terms are negotiated, backed by an Australian Credit Licence.

At Diverse Funding Solutions, we offer various commercial loans through some of Australia’s most reputable private lenders, and we act as an Authorised Credit Representative.

Some of the most frequent loans are:

Second mortgages

Second mortgages are often confused with caveat loans, as they work similarly and are often offered over a similar loan term.

However, there are a few differences between a second mortgage and a caveat loan.

Typically, a second mortgage needs to be a registered mortgage [fact check], meaning that there can be slightly more paperwork required than other alternative forms of finance.

Equipment and Asset Finance

Most businesses in Australia are familiar with equipment and asset finance.

Financing for business equipment and assets is usually available via either leasing, hire purchase agreement or chattel mortgages.

Diverse Funding Solutions offers a range of equipment and asset purchase financing solutions, however, naturally, leasing and hire purchase agreements can come with more complexity than some other business finance options.

Short-term caveat loans

Short-term caveat loans are the fastest private lending loan available.

At Diverse Funding Solutions, we often fund our caveat loans within only 48 hours of the application being submitted!

Naturally, every business’ lending experience will depend on their personal circumstances, however, one similarity remains — we will process your caveat loan application in a timely manner.

How is a caveat loan funded so quickly?

Caveat loans use real estate property as collateral for the loan.

Unlike most other loans that use a property as security, caveat loans simply register the lender’s interest via a legal caveat rather than registering on the property title itself.

What this means for those wishing to use their residential property or investment property as security for a caveat loan is that the wait time to approve the collateral is much shorter than other secured loans.

Caveat loans explained further

There is much to know about using a caveat loan — we look at some of the ins and outs to caveat lending below.

How are caveat loans secured?

As we mentioned earlier, a security property is used as collateral for caveat loans.

The caveat loan lender registers their interest in the property via placing a legal caveat over the title deed.

This means that even if you have an existing mortgage, you can still apply for a caveat loan, provided you have sufficient equity in your property value!

Those looking to use a caveat loan need to be aware that overseas properties aren’t able to be offered as security and that while the legal caveat is in force, a property sale, or transfer of ownership, cannot occur on the property.

No legal or financial advice required

It is always sensible to seek any professional advice you feel you (or your business) needs before making significant decisions.However, don’t let the term ‘legal caveat’ fool you; no legal (nor financial) advice is required to establish a caveat loan for your business.

The flexibility of fast caveat loans

Property owners who run businesses use caveat loans for a myriad of different business financing objectives:

  • Repaying tax debt to the ATO
  • Renovating workshops or offices
  • Expanding
  • Purchasing stock or inventory
  • Property developers often use caveat loans to bridge the gap between new developments and the sale of a current project.

A short-term caveat loan lets you release equity tied up in your property’s value to boost your cash flow immediately.

Your loan amount depends on your needs and how much equity you hold.

You can access a caveat loan amount of up to 75% of your available equity through Diverse Funding Solutions. 

This makes caveat loans a terrific option for so many business purposes!

Minimal documentation

Forget years of tax returns, revenue forecasts or profit-and-loss statements; a caveat loan application requires your identification, council rates notice and latest mortgage statement!

Private lenders will assess your caveat loan application, look to set an exit strategy and then lay out a repayment schedule for repaying the loan.

How to know if a fast caveat loan is the right option for you

Accessing flexible repayment schedules over a loan term that suits you, using your real property as security doesn’t need to take forever.

A fast caveat loan could be the answer!

If you’re keen to avoid the headaches of business finance, then contact our efficient team at Diverse Funding Solutions, and we can help you get a caveat loan.

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