The Urgent Caveat Loan – An Option That Is Very Viable


It is possible that as a businessman, you might need money urgently from time to time. You may not want to go to the bank or other financial institutions to take loans. You know that process can take long, the paperwork can be boring and detailed. The caveat loan is one very viable option that you can look at, which will serve your need adequately.

The need for money for businessmen, entrepreneurs may arise in the following scenarios:

  • For expanding the business
  • To repay a debt long overdue on which you are paying hefty interest and penalty
  • A bridge loan for the immediate short term

So why is the caveat loan viable and how is it different from other loans?

This type of loan is given by lenders to borrowers who have some real estate asset. The lender values the real estate and if the value is between 70-75% LVR, then they feel it is safe to give the loan. The borrower knows that his money is safe as he can sell off the real estate asset should the borrower default. The caveat loan is so called as the lender is giving the loan with the caveat that the borrower will not be able to sell his real estate asset till he settles the loan at the agreed time. Now it is possible you may not be able to repay.

You can then rollover the loan to a fresh period. You may be able to take such caveat loans as many times as you want. Each time, you only have to show that you need the money for a genuine business purpose and not for personal use. The rate of interest is generally lower as there is lot of competition and lenders are keen to offer the best terms to the borrowers.

The urgent caveat loan is indeed a boon to those businessmen requiring cash for bridging

purposes. They can use this money for the immediate need and then repay it once their cash flow improves. There is no penalty or foreclosure charges if you decide to repay before the exit strategy time period.

If you have real estate assets, then you definitely should take advantage of it and take a caveat loan for any financial requirement. You are thus monetizing your real estate asset and not letting it remain idle.