Caveat loans when a business needs money in days

Speed is the point

A registered mortgage involves more paperwork and often the consent of an existing lender. A caveat is simpler: a notice on the title that protects the lender’s interest. That is why caveat loans are often the quickest property-secured option, and why they are used when a deadline will not move.

Typical uses

• Paying an ATO debt before enforcement escalates.
• Securing stock or equipment offered at a price that will not last.
• Covering wages or suppliers while a large payment is delayed.
• Paying a deposit or settlement shortfall on a business purchase.

How a caveat loan works

1. You provide the property details and what the money is for.
2. The lender assesses the property from sales evidence. No valuation is needed before approval.
3. Loan documents are signed and the caveat is lodged with the land titles office.
4. Funds are released, in as little as 24 hours on straightforward deals once documents are signed.
5. The loan is repaid from trading, a refinance or a sale, and the caveat is withdrawn.

Caveat versus registered second mortgage

Feature	Caveat	Registered second mortgage
Set-up speed	Very quick	Quick, more steps
First lender consent	Usually not required	Sometimes required
Typical term	Short	Short to medium
Can change later?	Yes, can convert to a second mortgage	Already registered

Each state runs its own land titles system with its own caveat rules, which your solicitor handles. Our guide to caveat loans goes deeper into lapsing notices and state differences.

Costs and cash flow

Caveat loans are priced for speed and short duration. Interest can be prepaid or capitalised, so nothing needs to come out of the business account during the term. Always compare total cost and make sure you have a realistic way to repay within the term, while knowing the loan can stay in place longer if needed.

An illustrative use

A builder is owed a large progress payment that has been delayed by a dispute over a variation. Meanwhile, a director penalty notice has arrived over unpaid PAYG withholding, and the timeframe to act is short. The builder owns a home with a bank loan, and there is good equity above it.

A caveat loan is assessed from sales evidence and no pre-approval valuation is required, the caveat is lodged, and the ATO amount is paid within the notice period. When the progress payment is finally released, it repays the loan. Because the builder later needs a few more months for another job to complete, the caveat is converted to a registered second mortgage rather than refinanced elsewhere.

Questions to ask before you sign

• What is the total cost if the loan runs to term, and if it runs longer?
• What happens if I need to convert to a registered second mortgage?
• Who pays the costs of lodging and withdrawing the caveat?
• Is the interest prepaid, added to the loan or paid monthly?

Need it this week?

Use the 60-second form with the property, the amount and the deadline. Enquiries carry no credit check, an expert looks it over, and there is no lead selling. Ask about a caveat loan.