Specialised lenders/credit providers can solve the cash flow problem of business owners with the help of a caveat loan. The loan is ideal for business owners because:
>> Bank style credit approvals are not required
>> Tax returns are not required
>> No credit checks are undertaken on your credit history as bad credit history is not relevant
Interestingly, a caveat loan is not only right for a business owner but it can also be beneficial to a property developer or an investor.
Caveat Loans - Definition
They are fast settling loans, which are structured for a short-term of usually between 1 to 12 months, with a possible rollover (if required).
In contrast to conventional forms of finance, caveat loans need to be established quickly (i.e. within 24 hours from the time the application is first lodged).
How does a Caveat Loan work?
These loans are simply an 'asset lend.' For caveat loans (sometimes referred to as a short-term 2nd mortgage), all you need is to be the owner of a piece of real estate. Here is a list of residential, commercial, industrial or specialised securities that the loans are commonly secured against:
>> A home or a unit
>> Vacant land
>> Medical centres
>> Child care centres
>> Commercial properties
>> Rural land, farmland or agricultural land
>> Acreage (with no limit), etc.
How are Caveat Loans Structured?
>> They are structured just for a short-term of 1 to 12 months period
>> They generally have a five day "fast-settlement"
What is the Loan Exit Strategy and how are Caveat Loans Repaid?
The loan exit strategy is where the borrower agrees to pay the loan back to the lender/credit provider at a predetermined time (usually between 1 to 12 months).
The repayment of the loan can be done by one of the following methods:
>> You can refinance the loan
>> You can sell the asset
>> You can use any business cash flow or commissions due to you
What Other Reasons do Business People Choose for obtaining Caveat Loans?
Here is a list of many reasons (scenarios) why business people choose the loan:
>> A common use of the caveat loan is if business people require funds for bridging between the selling of a property and the funding of an urgent requirement;
>> Having the required cash flow in hand by way of the loan has helped many business people to pay off their debts and thereby enabling them to go on with the running of their business;
>> It may be that business people want to expand their business, and they need additional funds to enable them to fulfil their business goals;
>> They may want to attend an auction and the need to transfer the funds right after the auction ends; or
>> They may simply have a business deal that is too good to let go, and they currently do not have the required cash to pursue this business deal.
So, now you know how caveat loans can help you. More importantly, you also know that the loans can help you with any unexpected urgent commercial debts that you have to pay before any legal process is taken against you (e.g. default or court judgement) or before you are charged with late fees.
Singh Finance helps business owners in securing finance for their business. The firm's expert finance brokers will help you in securing caveat loans as well as help you in obtaining business equipment finance and quick short term business loans. Call on 0424 190 908 or enquire online now.
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