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Caveat Loans

Need quick finance for your business? Find out how caveat loans work and if they're right for your business.

Thomas Stelzer
Thomas Stelzer
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If you own a small or emerging business, it can often be difficult to get approval for a business loan. Many lenders will ask you to provide detailed evidence of your trading history and revenue, as well as meet strict lending criteria to be eligible for a loan.

If you're unable to access other forms of business finance and have property you can use as security, a caveat loan can give you quick access to the funding you need.

Learn how caveat loans work, what to look out for, and compare business loans below.

What is a caveat loan?

A caveat loan is a short-term business finance option that gives businesses quick access to funding. Like payday loans for individuals, caveat loans offer short turnaround times and short loan terms, but higher interest rates than regular business loans.

How do they work?

A caveat loan is a secured business loan that requires you to use your property or land as security against the loan. You can generally borrow from $1,000 to $50 million, although this will depend on the value of the property you are using as security. Most lenders will let you borrow up to a certain percentage of the value of your property, generally between 70% and 90%, although some may allow you to borrow the full value of the property.

As such, a caveat loan functions much like a second mortgage, and the lender can take ownership of the property (or the amount of equity you used as security) if you fail to repay the loan. This also means you are unable to sell the property or use it as collateral elsewhere until you have paid off this loan.

Most caveat loans are approved within one or two days, and generally offer loan terms of between 1 and 12 months. Unlike other loan types, many caveat loans charge interest on a monthly basis, and interest rates are generally much higher than other business finance options. You are generally not required to provide the documentation that is required with regular business loan applications, such as proof of income, revenue forecasts or a property valuation.

How much does a caveat loan cost?

The cost of your caveat loan is mainly determined by the loan amount, the interest rate and the loan term you are offered. Many caveat loans offer loan terms of up to one year and charge interest on a monthly basis, often from 1% per month.

Some lenders will also have a number of fees and charges that you will need to pay as part of your loan. These may include:

  • Application fees
  • Property valuation fees
  • Legal fees
  • Line fees

You should always confirm with the lender if you will need to pay any fees as part of your loan. You should also always calculate the overall cost of the loan before you apply, to ensure you find the one that is best suited to you and that you can afford to pay back.

Benefits/drawbacks

  • Quick access to finance. Some caveat loans can be approved within one or two hours.
  • Flexible loan amounts. You can generally borrow from $1,000 to $50 million, depending on the value of your property.
  • Little documentation required. Unlike regular business loans, you do not generally need to provide evidence of your trading history and revenue or other business details.
  • High rates. Caveat loans offer higher interest rates than normal business loans. Unlike other business loans, interest is also generally calculated on a monthly basis.
  • Short loan terms. You are generally required to pay back the loan within 1 to 12 months.
  • Requires property as security. You will need to use your property as collateral against the loan in order to be eligible.
  • Higher risk. if you fail to repay the loan, the lender can take ownership of the property (or the amount of equity you used as security).

Is a caveat loan suitable for my business?

A caveat loan is often a last resort for businesses that require finance. As such, it is important that you understand the terms of the loan and are confident you will be able to repay the loan before you apply. While it may seem like an attractive option if you are struggling to secure other funding, a caveat loan is generally only suitable if you meet the following criteria:

  • You have property or land to use as security against the loan.
  • You need quick access to funds and are ineligible for other forms of business finance.
  • You will be able to repay the loan in time.

If you do not meet all of the criteria above, a caveat loan may not be an appropriate choice for your business.

Compare business loans

Before applying for a caveat loan, you should determine if you may be eligible for a regular business loan, as these loans generally offer more flexible loan terms and lower interest rates. You can compare a range of business loans below.

Moula Business Loan

Moula Business Loan

  • Borrow up to $250,000
  • Flexible lending criteria
  • No hidden fees
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100% confidential application

Moula Business Loan

An unsecured business loan with online application and no upfront or early repayment fees.

  • Interest rate type: Fixed
  • Loan security: Unsecured
  • Upfront fee: 2% Establishment fee
  • Minimum loan amount: $5,000
  • Maximum loan amount: $250,000
  • Maximum loan term: 2 years
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Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Moula Business Loan
Moula Business Loan
$5,000
$250,000
1 to 2 years
2% Establishment fee
A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.
Go to site
More Info
Zip Business
Zip Business
$10,000
$500,000
6 months to 3 years
No Establishment fee
Borrow up to $500,000 with loan terms of up to 3 years. Flexible weekly, fortnightly and monthly repayment options available with no early repayment fees.
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More Info
ebroker Business Loan
ebroker Business Loan
$5,000
$5,000,000
1 month to 30 years
$0 application fee
Small business loans available between $5,000 and $5,000,000. Get access to 70+ non-bank lenders on this independent platform.
Enquire now
Lumi Unsecured Business Loan
Lumi Unsecured Business Loan
$5,000
$300,000
3 months to 3 years
2.5% establishment fee
Apply for up to $300,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.
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More Info
Max Funding Unsecured Business Loan
Max Funding Unsecured Business Loan
$3,000
$30,000
1 month to 1 year
$0 application fee
An unsecured business loan from $3,000 that offers convenient pre-approval and no early repayment fees.
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More Info
Valiant Finance Business Loan Broker
Valiant Finance Business Loan Broker
$5,000
$1,000,000
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Enquire now
Octet Trade Finance
Octet Trade Finance
$200,000
$8,000,000
1 month to 2 years
Transaction fee 2.5%
Access a line of credit to pay suppliers in over 65 countries. Borrow from $200,000 up to $7 million.
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More Info
OnDeck Business Loans
OnDeck Business Loans
$10,000
$250,000
6 months to 2 years
3% of loan amount
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
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More Info
Prospa Business Loan
Prospa Business Loan
$5,000
$300,000
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $6,000 is necessary.
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More Info
Westpac Business Loan
Westpac Business Loan
$20,000
$1,000,000
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
Enquire now
ANZ Secured Business Loan
ANZ Secured Business Loan
$10,000
$10,000,000
Up to 15 years
$600
Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.
Enquire now
ANZ Unsecured Business Loan
ANZ Unsecured Business Loan
$10,000
$1,000,000
Up to 15 years
$600
Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.
Enquire now
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If your business is struggling to manage its cash flow, invoice financing could be an option. This type of business loan is secured by outstanding invoices and comes with reduced risk, no asset requirements or interest payments. You can compare the invoice financing products below.

Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Timelio Invoice Finance
Timelio Invoice Finance
$10,000
$100,000,000
Up to 4 months
$0
Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.
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ScotPac Invoice Finance
ScotPac Invoice Finance
$10,000
$150,000,000
From 1 year
No set amount
Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.
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More Info
ScotPac Selective Invoice Finance
ScotPac Selective Invoice Finance
$10,000
$1,000,000
1 to 3 months
$500
Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.
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Octet Invoice Finance
Octet Invoice Finance
$100,000
$10,000,000
1 month to 2 years
No Set Amount
Convert up to 85% of your company's receivables into cash flow. The value of your receivables need to be worth at least $250,000 to be eligible.
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More Info
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