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Business Caveat Loans with Money Matchmaker™

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Caveat Loans for Business Owners

Business caveat loans are used to access business funding between $1,000 to $50 million, with lending amounts relative to the available equity in the property used as security.

Caveat loans require minimal documentation and have a faster approval turnaround than traditional business loans. However, they also have shorter terms, and higher interest rates, and can only provide access to funding up to the value of your property.

In summary:

  • Fast way to access finance
  • Credit history not important
  • The loan is secured against the lender's property
  • Can be used for any business purpose
  • Business finance if you cannot access other loan options
  • Caveat loans have a higher rate of acceptance
  • Simple application and minimal documents required
  • Only a short-term option
  • Higher interest rates than secured business loans
  • Borrowing amount limited by equity value
  • Fees can result in high total repayment
  • Property used as security cannot be sold or used as collateral until the loan is repaid

Key Features

  • Borrow from $5,000 to $500,000
  • Fixed or variable interest rates
  • Repayments to suit your budget
  • Terms from one month to five years
  • Secured & unsecured options

Who is eligible?

  • Own a business and have an ABN
  • Business is GST-registered
  • Permanent Citizenship or Residency
  • Minimum business-operating time of six months
  • Can provide business bank statements

Shopping around for the right loan can save you thousands of dollars in interest and fees.

What is a Business Caveat Loan?

Business Caveat Loans are a type of short-term business finance secured using a property owned by the borrower. The amount you can borrow is based on the available equity in the property used as security. They have faster approval times and higher interest rates than traditional secured business loans.

A business caveat loan uses your property or land as security against the loan. This allows faster approval speeds on applications, as lenders will generally only assess the available equity in your property and approve an amount between 70% and 100% of its value.

They are similar to standard business loans, with a few points of difference:

  • Most caveat loans are approved within one or two days
  • Loan terms are shorter — often between 1 and 12 months
  • Many caveat loans charge interest on a monthly basis
  • Interest rates are generally higher than other forms of business finance
  • Minimal documentation required to apply
  • You can only borrow up to the value — or a percentage — of your property’s equity

Need fast access to finance or a one-time credit facility?

What is a caveat?

A caveat is a document lodged on the title of real estate. Only one caveat can be lodged on the property at a time, and indicates to other lenders or homebuyers that the property is acting as security.

Business Asset Finance

When to consider a Business Caveat Loan

Business caveat loans are most often used by small-business owners, who cannot meet traditional qualifying criteria for a business loan.

Limited operating time and a lack of business financials are major hurdles when applying for business finance, and property-backed borrowers benefit from limited requirements and fast access to cash flow when using business caveat loans.

While there are benefits to caveat loans, their high rates and short terms generally only make them suitable if:

  • You're unable to access other forms of business finance
  • You own a business operating for less than two years
  • You have sufficient equity in property or land

Business caveat loans can be used for any legitimate business purpose, including managing your day-to-day operations, making inventory purchases, or expanding your business to further growth.

Have a unique need for business finance?

Caveat loan uses

Operating expensesStock and inventoryCompany growth
Working capital Pay existing staff Hire new employees Pay unexpected bills Advertising or marketing campaigns Build a websitePurchasing materials Purchase stocks or other investments Buy or upgrade IT systems Buy essential equipment and stock Buy and maintain vehiclesImmediate property improvements Opening more locations Refurbish current premises Acquire a competitor

Caveat loan rates, fees, and borrowing limits

Business caveat loans can range anywhere from $1,000 to $50 million. Caveat loans allow you to borrow up to a specific percentage of the available equity in your property — most lenders will offer between 70% and 90% — however some lenders allow borrowing up to the full value.

Business caveat loan interest rates are generally higher than other business loans. As caveat loans are designed as a short-term finance solution, interest is often charged monthly. Many lenders will offer interest rates from 1% per month.

There can also be a number of fees attached to caveat business loans, including:

  • Application fees
  • Property valuation fees
  • Legal fees
  • Line fees

It’s important that when comparing various lenders for a caveat loan, you consider any initial or ongoing fees — such as property valuation or monthly fees — before applying. This will ensure you understand the total overall cost of your caveat loan and are comfortable you can make repayments.

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How to qualify and apply

Applying for a business caveat loan is simple, and requires fewer supporting documents than a standard business loan. As the loan amount is based entirely on the borrower’s available equity, the lender will only need to assess the value of the property to determine eligibility.

To apply for a caveat loan you will need to:

  • Complete an online application with a lender
  • Provide a list of assets and liabilities
  • Provide proof of property ownership

Lenders are often able to approve an application within two hours. If your application is approved, funds can be transferred to you within 24 hours. Faster approval is possible with some lenders if the borrower:

  • Provides proof of income
  • Has no history of bankruptcy
  • Can demonstrate an ability to make repayments

You can apply for a Business Caveat Loan with Max Funding. Read our review of the lender or compare finance options from Australia’s leading business lenders by visiting our Lender Reviews section.

Here are the most popular questions people are asking about business caveat loans:

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How fast can I get a business caveat loan?

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Business caveat loans are often the easiest and fastest business finance applications to approve. Some lenders can offer loan assessment and approval in a few hours, as they require minimal paperwork and only need a valuation of your property.

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What’s the maximum amount I can borrow with a caveat loan?

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In general, you can access between 70 and 90 per cent of the equity in your property, while some lenders allow you to access up to 100%. For example, if the lender offers caveat loans at 75% of the available equity, you could access $750,000 on a $1 million property.

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What are the accepted properties for a caveat loan?

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Property used in a business caveat loan can include many types of properties. Residential homes, commercial buildings, land-only titles, and many more. You should always check with your lender to see which types of properties they are willing to take on as security.

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Can a property be sold if it has a caveat?

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Unfortunately not, and this is to protect both you and the lender. When you have a business caveat loan, the caveat indicates to lenders and homebuyers that you can't sell your property or attempt to obtain further funding until the loan is repaid.

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Money Pty Ltd,
Suite 3, Level 2,
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Moorabbin, VIC, 3189 Australia

Company

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ABN: 42 626 094 773
ACL: 528698
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Disclaimer

Money Pty Ltd (trading as Money.com.au) provides information about credit products and is authorised to do so as the holder of Australian Credit Licence 528698. Money.com.au does not compare every Lender in Australia. We are not a broker or credit provider and when we provide information via this website, we are not providing you with a recommendation or suggestion about a particular credit product. When you apply for a credit product via the Money.com.au website, you are not applying with us, you are applying directly with a Lender Partner. Before entering into any credit product from one of our Lender Partners, you should confirm the rates and product information with the Lender. All information on this website is general advice only and does not take into account your objectives, financial situation or needs. You should consider whether this advice is right for you and we encourage you to seek independent financial advice.