Many people ask what are Caveat loans. They are a fast and easy way to access money when you need it the most. It is a means of obtaining funds very quickly. However, Caveat loans must be secured by real estate and be wholly or predominately for business purposes.
There are many reasons why people should choose Caveat loans. It can be that the business simply requires instant cash flow because they require an amount of cash injection during that time. You can apply for bank business loans, but this requires more paperwork to be approved. For Caveat loans, all you need is to be the owner of a piece of Real Estate in Australia, and if you can prove yourself to be an owner, you can obtain a Caveat loan. The only other requirement for a Caveat loan is a clear exit strategy, which is to clearly state how you will repay the money, including where you will get the money from, and how you would repay it.
Caveat loans can also help where you have unexpected urgent commercial debts that you need to pay before a charge for late fees or any other legal process is to be taken (defaults and court judgements etc). Sometimes cash flow can slow you down from gaining enough money for paying large debts, and debts can be things stopping you from proceeding in your business, that is when you might want to apply for a Caveat loan. Having cash flow in hand to pay off your debts and go on with your business, then regain your cash flow back in the near future for the repayment of the loan. In these ways Caveat loans can assist your business through some of the hard times your business may experience.
The most common use of Caveat loans are for bridging between the selling of a property and the funding of urgent requirements which have been explained in other articles. During that gap, the person who has sold their property does not have the money in hand for the required. There is also a very common use of Caveat loans, which is during construction projects, sometimes, when projects are started, they have certain budgets to complete the projects. Sometimes the budgets given is not enough to complete. Therefore, the Project Managers will apply for a Caveat loan to gain quick, instant money, in order to complete the project, and their exit strategy is generally the same. Once the project is completed they will receive payment for the project, which is the money that will be used to repay the Caveat loan.
The most common borrowers for Caveat loans are project managers, home owners and business owners. They all borrow money for different reasons, but some for similar reasons. Most of the time, project managers borrow Caveat loans for the completion of the project, they simply require more money to complete the project they are doing to receive the payment for the project. Home owners simply need the money during the settlement period to pay the mortgage for the new property they are planning to purchase. And business owners simply need money for their business cash flow, to either get their business to run smoothly or to expand their business (possibly to purchase a business)
Other scenarios for clients to turn to Caveat loans includes (but is not limited to), legal purposes, bargain deals but currently doesn't have enough funds, auctions (where funds are transferred right after the auction ends), bargain for bulk buying company products, when businesses feel the need to expand and need additional funds to fulfill their goal.
If you are speaking about fast settling loans, which are structured just for a short term of 1 to 4 months then it is nothing but a Caveat loan. Sometimes referred to as a short term second mortgage.
Caveat loans are designed to settle within twenty four hours of receiving your applications without looking at the applicant's income or credit history. As such, there is no time for valuations, and bank style due diligence, and in many cases, a bad credit history is irrelevant. The requirement is equity in real estate being offered as security.
Caveat loans mainly go behind your current 1st mortgage. Effectively it sits as a second security/2nd Mortgage (unregistered) on your property. ie. a blanket security as it is sometimes called.
Why people take out Caveat loans?
Obviously multiple reasons are there which are sorted out with access to funds in 24 hours and the reason are:-
1. Fund a short fall on a property settlement.
2. Pay off an overlooked or overdue Tax debt.
3. Provide cash flow due to an unexpected downturn or for any business related purpose or business purchase
4. An urgent advance on a pending refinance or property sale.
Caveat Loans and 2nd mortgages are a convenient tool to have access to however you do not have to be a rocket scientist to know that rates of 4%,5% and 6% will only chew up the equity in your property and when you are forced to sell by your lender you will be left with minimum proceeds. At Universal Finance our low, low rates make Caveat Loans/2nd Mortgage Loans affordable and useful. Our Turbo Caveat Loans product is how short term caveat loan lending should be. Call us today to find out more (08) 8344 9508