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100% Funding up to the value of the property

Speedy access to capital

Customised repayment plans

Loan term up to 5 years

What is a Caveat Loan

A caveat loan is a type of credit where your property's value is used as security against the business loan offered by the lenders. The caveat is a note on your property's ownership record.

This note, or caveat, is like a signal on the property title. It tells other lenders or potential buyers that a third party has a stake in the property, using it as collateral for a loan. Only one caveat can be on the property at a time, and while it's there, you can't sell the property.

Caveat loans are a quick and secure way for businesses to access short-term financing by leveraging their real estate assets. For the lender, the property becomes security for the loan, giving them the confidence that they can sell it to cover losses if the borrower defaults.

Critical information sheet

Our loan guide

Caveat Loans

Loan amount

Starts from $50k

Interest rates from

From 7.99% p.a.

Loan term

Up to 60 Months

Pre-approval time

24 – 48 hours

Unconditional approval & settlement time

3-5 Business days

Repayments

Principal & Interest | Interest Only

Security

Required with funding possibilities up to 100% Loan to Value Ratio (LVR) supported by business cash flow

What you need to know

Can be used for

Working Capital

Buying Stock/Inventory

Business expansion

Pay ATO dues

Documents required

Valid identification proof

6-12 Months bank statements

Security Details

Others depending upon loan product

*The information provided in critical information sheet is intended as a guide only. Please contact us for more information.

What you should know about caveat loans

Have questions? Speak to our experts!

1300 253 041 Apply Now

How does a Caveat Loan work?

These loans are a quick way for businesses to use the value of their property to get money when needed.

 Generally, cash flow lenders need a caveat with at least 1:1 equity in the property to offer loan beyond a certain limit to the client.

 The lender gets a share in your property to make sure they can get their money back, even if something goes wrong.

 So, if you're a business looking for a fast and flexible way to access money using your property, caveat loans might be the solution for you. And for the lender, it's a way to make sure they're protected if things don't go as planned.

Pros & Cons of Caveat Loans

Pros

Quick access to capital

Flexibility in collateral

Short-medium term financing option

Customised repayment plans

Diverse use of funds

Cons

Risk of losing assets

Not ideal for long-term financing

When to consider a caveat loan?

Small business owners often turn to business caveat loans when they can't meet the usual requirements for regular business loans. If you own property and have equity in it, these loans offer a quick way to get cash, with fewer demands compared to traditional options.

Consider these loans if:

  • You need money faster than other choices allow.
  • You need money beyond a certain amount
  • The lenders are not comfortable just basis the cash flow/financials of the business.
  • Your business hasn't been around for long (less than two years).
  • To pay off ATO dues on your business.

Full doc vs low doc

Full-doc loan

  • Requires Financials, tax returns, lease agreements, ATO Portals, BAS Statements etc.
  • Comparatively cheaper and longer term as compared to a no doc/low doc loan option.
  • Approvals may take longer as compared to a no doc/low doc loan option.
  • While this option demands more upfront effort, it gives a greater confidence for lenders due to detailed documentation which in turn provides customers with a more competitive interest rate.

No Doc/Low-doc loan

  • No financial statements or tax returns are required.
  • This gives businesses with tight profit margins more choices and flexibility, usually offered by non-bank 2nd tier / private lenders.
  • Comparatively expensive and shorter term as compared to a no doc/low doc loan option.
  • The application and approval process is usually quicker as compared to a full doc application.

Key features of Caveat Loans

Caveat loans operate as a secured financing option, requiring collateral in the form of real estate assets. This collateral provides security for the lender and allows for more favourable terms with higher loan amount than the unsecured alternatives.

One of the distinctive features of caveat loans is their reliance on real estate assets as collateral. This approach enables businesses to tap into the equity of their owned properties, utilising these assets to secure the funding required for various purposes.

Once approved, businesses have the flexibility to allocate the funds from caveat loans according to their specific needs. Whether it's for expansion, working capital, equipment purchases, or other strategic initiatives, the usage of funds is diverse and adaptable to the unique requirements of each business.

Caveat loans often come with flexible and tailored repayment terms. Businesses can work with lenders to structure a repayment plan that aligns with their cash flow, providing a level of customisation that is advantageous for both short-term financial needs and long-term growth strategies.

What makes you eligible for a Caveat Loan?

  • Have an active ABN and GST registered.
  • Have an eligible property to provide as a collateral
  • Operating for more than 6 months
  • Monthly turnover > $5K

What can you use a Caveat Loan for?

These loans can be used for multiple expenses in the business. If you need short-medium term instant funding, a caveat loan the right product for you.

For instance, say if you have a seasonal business and you require immediate funds to stock goods, you can get a caveat loan to procure your goods and multiply your sales during the peak season. Some of the other purposes for which a caveat loan can be used is listed below.

  • Invest in a new business
  • Expansion into branches or another unit
  • Purchasing property
  •  Meeting working capital needs
  • Buy stock or inventory
  • Buy tool or equipment
  • Paying wages rent
  • Renovating business premises
  • Paying ATO tax dues
  • Advertising and marketing

How do I apply for a commercial property loan?

1. Submit Application

First step is to simply fill out the application form with the required information and loan request.

2. Get Indicative Quote

Once the application is received, our lending specialist would get an indicative quote within 24-48 hours.

3. Letter of Offer (LOO)

Once we receive the mandate to proceed basis indicative quote, we get a formal letter of offer from the lender.

4. Valuation and Legal Docs

On receipt of signed LOO, the lender would initiate valuation and get loan docs prepared.

5. Disbursement

Once we receive the mandate to proceed basis indicative quote, we get a formal letter of offer from the lender.

Caveat Loan vs Second Mortgage

A caveat isn't the same as a mortgage or second mortgage. The key distinction lies in the rights of the party involved in the real estate.

Start loan application

Caveat Loans

A caveat stops the property owner from taking certain actions, like selling or transferring ownership.

A caveat loan not necessarily requires a full valuation and can be accepted basis desktop valuation as well.

Generally, takes lesser time to settle as compared to a Second Mortgage loan.

These loans are not purely done based on value in the property, but the lenders look into business cash flow and serviceability as well.

Lenders can lend up to 100% equity value in the property supported by business cash flows.

Second Mortgages

 A second mortgage empowers the lender to sell the property if the borrower misses repayments and defaults.

 In most cases, a second mortgage requires a formal valuation except too low LVRs on the property.

Generally, takes longer time to settle as valuation and legal docs preparation takes longer time.

These loans are lent purely based on LVR on the property and a business not necessarily needs to have a cash flow trading history.

Lenders can lend max 70-75% of the market value of the property.

The choice between a caveat loan and a second mortgage depends on the borrower's financial situation, the urgency of the funding need, the duration for which funds are required, and the ability to handle different interest rates and repayment structures. Caveat loans are more suitable for immediate, short-medium term needs of the businesses with sufficient cash flow backing to service the repayments, while second mortgages are better for new to start-up businesses wherein there’s not enough cash flows to support serviceability and clients can go with capitalised interest or interest only options.

why-choose3

Why should you choose Broc Finance?

Tailor made options

Being a small business owner, many of our clients are not sure of right loan product for their businesses. Our lending specialists understand their needs and recommend tailor made options.

Personal Consultation

Unlike business loan marketplace websites which use AI based algorithms to match your requirements, we provide obligation free personal consultation as every business is different and an AI based algorithm may not provide them the optimum solution.

personal-consultation

Competitive Pricing

We endeavour to achieve the optimum business loan solution for our clients at the most competitive pricing possible.

Clear communication

We understand the essence of time so don’t believe in wasting our customers time by giving false hopes. Transparent and clear communication is in our DNA.

Real results with real people.

65+ customer reviews

5.0

John Christian

John Christian

Broc Finance were a pleasure to work with. Saroj took the time to understand the purpose for the facility and my business. In doing so, he secured exactly what I wanted, quickly and at a very competitive rate. I’d recommend Broc Finance to anyone looking for a finance facility who wants to work with a broker who can provide that personal experience that the Big-4’s just don’t offer. Great experience!! I look forward to working with Broc Finance in the future.
Manpreet Kaur

Manpreet Kaur

Our sincere thanks to Saroj ji & his team for their invaluable assistance in securing the loan. We are extremely greatful for his exceptional service & support throughout the process. Highly recommend!
Amish Desai

Amish Desai

A true professional with in depth knowledge of products and processes; Real time delivery of service, with a customer centric view, simply superb Saroj!
Harry Gill

Harry Gill

It was Great to work with Saroj. He was very accomodating and helpful . The process of the loan was very simple and easy. Saroj kept me updated at every step. Highly Recommend Saroj . Harry
Matthew

Matthew

Broc Finance were awesome…really responsive and solutions focussed. We especially appreciated having a broker who was an advocate for our interests when engaging with lenders.
Niteesha Nagowah

Niteesha Nagowah

We had an incredible experience working with Saroj from Broc Finance. He is incredibly knowledgeable, responsive, and guided us through the purchase of our company vehicle with expertise. The attention to detail and commitment to finding the best possible options truly set him apart. Highly recommend his services for anyone navigating the complexities of obtaining a finance. Thank you again for outstanding assistance.
Ibrahim Alpay

Ibrahim Alpay

Saroj and his team is amazing have been using him for business funding for over a year he has found surprising solutions when others couldn’t make it happen very skill full with negotiating high loan amounts that I would never expect at wonderful terms and rates look no further I recommend broc finance for your business lending purposes look no further and don’t think twice much appreciated won’t go to any other broker at all many thanks to his team !!!!!!
Greg Canal

Greg Canal

Saroj Shah (Sas) was very easy to deal with and the outcome was just what we wanted and super fast. Thank you

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Frequently asked questions

Approval times can vary, but caveat loans are often known for their quick processing. Some lenders may provide approvals within 2-3 business days.

Properties with sufficient equity are typically eligible. This can include residential, commercial, or industrial properties. The amount you can borrow may depend on the property's value and your business ability to repay the loan.

Caveat loans usually have short-medium terms, often ranging from 6 to 60 months. The specific term can vary depending on the lender and the agreement.

No, a property with a caveat cannot be sold or used to obtain another loan.

Some lenders allow early repayments, but it's essential to check the terms of your specific loan agreement. Some loans may have penalties for early repayment.

If you default, the lender may have the right to take legal action, including selling the property to recover the outstanding amount. It's crucial to understand the consequences and discuss them with the lender.

Yes, caveat loans are often considered by businesses with a limited operating history, as they may have more flexibility in the eligibility criteria compared to traditional loans.

Getting a loan with a bad credit history is tough but not impossible. Especially when you’ve got a property to back your loan, your chances of getting a loan with a bad credit history improves.