Caveat Loans & Bridging Finance

Caveat Loan (or sometimes referred to as a short term 2nd mortgage) are fast settling loans, which are structured just for a short term.  Unlike normal forms of finance, these loans need to be able to settle quickly from the time the application is first lodged. This can be as quickly as 24-48hours.  As such, there is no time for valuations, and bank style due diligence, and in many cases, a bad credit history is irrelevant.    We can arrange caveat or bridging finance to enable individuals and businesses to maintain liquidity and meet commitments while waiting for an anticipated inflow of cash. This type of lending enables borrowers access to urgently needed funds quickly.

How Does a Caveat Loan or Bridging Loan Work?

Put simply these loans are an ASSET LEND, where the loan is secured against a piece of real estate and the borrower pays it back at a predetermined time in the next few months.   This is known as an EXIT STRATEGY.  Repayment of the caveat loan could be through a refinance, sale of an asset, business cash flow, commissions due or any event that can be verified as a suitable exit strategy.

This type of loan sits behind your current 1st mortgage, so effectively its sits as 2nd security on your property.  Once the loan is paid out, the caveat is removed from the title, and that is the end of the transaction.   Contrary to some myths, the 1st mortgagee (being your bank) will generally not object and has absolutely no interest in any caveat going on title.

Reasons for using Caveat or Bridging loans?

There are many reasons why people take out short term caveat or bridging loans.

You may need to :

  • Secure working capital. Bridging loans also benefit homeowners.
  • You can use these short-term loans to secure cash between the closing of a home sale and a home purchase. You pay back your loan with the profits you’ve earned from your sale.
  • You may need cash flow to finish a construction project
  • Buy out a business partner

The reasons for wishing to secure caveat or bridging finance are endless.

Get started today with your own caveat or bridging loan.

Speak to a loan specialist now by calling 1300 559 917 to see if this type of lending is suitable for you.