Caveat loans: the fastest way to borrow against your property

When the money is needed this week, not next month, a caveat loan is often the quickest route. It uses the equity in a property you already own, and it doesn’t disturb the mortgage you already have.

How a caveat loan works

Instead of registering a full mortgage, the lender lodges a caveat on the property’s title. The caveat records the lender’s interest in the property until the loan is repaid. Your existing bank loan stays in place, at the same rate, with the same repayments.

When the loan is repaid, from a sale, a refinance or the business’s own cash flow, the caveat is removed.

Where caveat loans are used

Caveat loans are used in every state and territory except New South Wales and Queensland. In those two states, a registered second mortgage is used instead. It’s arranged just as quickly and works the same way for you. Read more about second mortgage business loans.

A caveat can also be converted to a registered second mortgage later, if that suits the loan better over time.

Why owners choose a caveat loan

• Speed. No valuation needed before approval, and funds can be in your account in as little as 24 hours.
• Size. From $20k to $5 million, depending on your equity.
• Credit flexibility. Past credit issues and ATO debt are considered case by case.
• Cash flow friendly. Up to 6 months with no repayments, with the interest added to the loan.
• No lock-in. Repay early at any time, or extend without penalties.

What a caveat loan is good for

Short, sharp funding needs with a clear way out:

• An ATO debt that needs clearing before enforcement action
• A supplier deposit or stock order for a big contract
• Settlement on a business or commercial property while the bank finance catches up
• Payroll or creditors while a large invoice is outstanding
• Paying out stacked cash-flow loans with daily debits

The paperwork

For conditional approval you’ll need:

1. Photo ID for each property owner
2. The property’s latest council rates notice
3. The latest statement for any existing mortgage
4. A short note on the purpose and how the loan will be repaid

You can gather all of it tonight. See our property documents checklist.

Caveat loan, second mortgage or first mortgage?

All three use the equity in your property. Which one fits depends on what’s already owed and where the property is:

Situation	Usual security
Property has a bank loan, in VIC, WA, SA, TAS, ACT or NT	Caveat
Property has a bank loan, in NSW or QLD	Registered second mortgage
Property has no loan, or the new loan pays the old one out	First mortgage

You don’t need to decide this yourself. Your lending manager works it out on the first call.

An example

A transport company in Perth owns a depot with a bank loan on it. The ATO has issued a director penalty notice over an unpaid BAS balance, and the owners need $420k within days. A caveat loan is lodged over the depot, the ATO debt is cleared, and the company has up to 6 months with no repayments while it refinances with its bank.

Questions people ask

Will my bank find out? The caveat appears on the title, which anyone can search. Some first mortgages also require the bank to be told. Your lending manager will explain what applies to you.

What happens when I repay? The caveat is withdrawn and the title is clear again.

Can I extend the loan? Yes. If your refinance or sale takes longer than planned, you can extend without penalties.

Ready to go? Send your enquiry. It takes about 60 seconds and there’s no credit check to enquire.

Why a caveat loan suits urgent deadlines

Most urgent business problems have a hard date attached: a tax deadline, a settlement day, a supplier who won’t release stock without payment, a payroll run. Bank finance rarely moves at that pace. A caveat loan does, because the security is quick to put in place, there’s no valuation to wait for and the decision rests on the equity you already have. With documents ready, approval can come within the hour and funds can be in your account in as little as 24 hours.

What a caveat loan won’t do

It isn’t designed as long-term debt. It works best as a bridge: from today’s problem to the sale, refinance or payment that repays it. If you need long-term funding, your lending manager can talk you through the path from a caveat loan to a bank refinance.