The Meaning of a Caveat Loan

Caveat loans are a short-term asset based loan product usually financed by private lenders. Compared to conventional forms of finance, a caveat loan can be established quickly (i.e. within 24 hours from the time the loan application is first lodged). The loan is secured on the value of concrete assets, such as:

  • A house or unit
  • A block of land
  • A commercial property

The Purpose of a Caveat Loan

For a business owner or a property developer it is inevitable that you may find yourself needing money quickly. So, a caveat loan is the right loan for you as it will enable you to:

  • Commit to any potential business growth by providing you with the required increased working capital
  • Secure the required funds for construction or development projects (Secure the required funds for property development or construction projects)
  • Get the cash-on-hand you need for urgent bills and expenses
  • Enhance your day-to-day business cash flow
  • Prevent foreclosure or repossession of your property

NOTE: – It is important to note that caveat loans are not offered to consumers who seek to use the funds for purposes to which the National Consumer Credit Protection (NCCP) Act may apply. The loan facility can only to be used for business or for investments other than investments in residential property.

Features of a Caveat Loan

Features for you to consider when you are applying for a caveat loan:

  • Fast approvals to meet your immediate needs
  • Quick settlements
  • Loan terms up to 3 >  12 months
  • Security to be in the form of real estate
  • Loan repaid at the end of the agreed term

Approval Requirements for a Caveat Loan
To get approval for a caveat loan, the lender/credit provider will require you to have:

  • Accessible equity in owned property (e.g. your residence or your business)
  • A reasonable exit strategy in place. You must be able to show the lender/credit provider how you plan to pay back your caveat loan (e.g. you may decide to sell the Security or use the profit from the sale of a business)

Do not worry if you have Bad Credit History
If you are in a situation where you need a loan and have a bad credit history, do not worry. Because generally credit checks are not required to be performed on caveat loans, even if you have:

  • A Discharged Bankruptcy
  • A Bad Credit Rating
  • A Court Judgement
  • A Part-9 Debt Agreement

Find an Expert Non Conforming Broker to help you
Contact a reputed brokerage firm with access to numerous private lenders /credit providers. The firm’s professionally qualified and expert finance brokers will structure your caveat loan to suit your individual needs and budget.