Caveat loans for Australian business
A caveat loan is a business loan secured by lodging a caveat over property you already own. HomeSec settles caveat loans from $20,000 to $5,000,000, in as little as 24 hours of approval, against first or second mortgage security anywhere in Australia. No financial statements, no valuation, and no repayments for up to six months.
See if you qualify in sixty seconds. No credit check to apply, no financials, no payments for the first six months. That's the HomeSec Advantage.
See if you qualifyWhat a caveat actually is
Under Australia's Torrens title system, a caveat is a formal notice lodged with the state land titles office recording that someone other than the registered owner claims an interest in the property. It does not transfer ownership and it is not a mortgage. What it does is record the interest: while the caveat sits on the title, the loan must be repaid if the property is sold or refinanced.
That is the whole mechanism. A caveat is fast because lodgement is an administrative act at a titles registry rather than a negotiated instrument requiring anyone else's agreement. It is why a caveat loan can settle in a day when a registered second mortgage over the same property might take a week.
When we use a caveat, and when we do not
Every HomeSec loan is secured by a first or second registered mortgage. The caveat is not an alternative to that — it is what makes the timing work. Registering a second mortgage can be slow, particularly in states where electronic lodgement is not accepted or where the first mortgagee has to give written consent, and that wait is outside anyone's control.
So we lodge a caveat on the title first. It protects our interest in the property from the moment the money moves, which is what lets funding happen in as little as 24 hours instead of waiting on a registry or a consent. Our lawyers then attend to registering the second mortgage after settlement, in the background. You get the funds on the day; the paperwork catches up behind you.
Equitable interest — the interest a lender takes under a loan agreement that permits caveat lodgement. Priority — the order in which registered interests are paid from a sale. Consent — a first mortgagee's written agreement to a subsequent registered mortgage; not required for a caveat. Withdrawal — the document removing the caveat on repayment, usually same-day.
How fast can a caveat loan actually settle?
HomeSec's published standard is a conditional answer on the first phone call, a Letter of Offer within two business hours, contracts within four, and funded in as little as 24 hours of signing. That timeline holds when the security is straightforward, you can sign electronically, and identification is verified the same day.
It does not hold in three situations, and we will tell you on the first call which one you are in: where the property sits in a company or trust and the constituent documents need review; where a first mortgagee's consent is required because a registered second mortgage is the better instrument; and where the title reveals an existing caveat, writ or Family Court order that has to be resolved first.
Caveat loan or second mortgage — which one?
| Caveat loan | Registered 2nd mortgage | |
|---|---|---|
| Instrument | Caveat noting an equitable interest | Mortgage registered on title |
| First mortgagee consent | Not required | Usually required |
| Typical settlement | 24 hours | 24 – 72 hours |
| Typical amount | Smaller, faster | Larger, better priced |
| Priority on sale | Equitable, behind registered interests | Registered, ranked second |
| Use it when | The deadline is days away | The amount is larger |
Neither instrument carries a fixed term at HomeSec. The term is open on both — no minimum, no maximum, no penalty for repaying early and no fee to extend.
Who qualifies
- An active ABN, and a genuine business or investment purpose for the funds.
- Real property in Australia in your name, your company's or your trust's — residential, commercial, industrial, rural residential or vacant land.
- Enough equity that combined lending stays within 80% of value for residential security, or 70% for commercial.
- A credible exit: a sale, a refinance, a receivable or a season. This is the part we assess hardest, because it is the part that determines whether the loan works for you.
What is not required: financial statements, tax returns, BAS, a clean credit file, or a formal valuation. Defaults, arrears, judgments and an ATO debt do not automatically disqualify you.
What caveat loans are used for
A caveat is the instrument of the deadline. Every one of these is a situation where the money has to arrive before anyone else's process could finish.
- The ATO, before a garnishee or a director penalty notice
- A caveat settles inside the notice period. The money goes to the ATO direct.
- A settlement that will fall over on Friday
- A shortfall on a purchase, or a sale that has moved. The caveat sits on the property you already own and comes off when the settlement completes.
- Stock, plant or a site at a price that expires
- The supplier wants a deposit this week; the bank wants six. The caveat is the instrument that does not ask the bank.
- A progress claim certified but not paid
- The builder's cashflow gap, funded against the builder's own property while the claim is chased.
- A refinance that has stalled in a bank's credit department
- The approval is coming; the date is not waiting. The caveat bridges, and is withdrawn when the bank settles.
How much you can borrow
Take the property's value, multiply by 80% for residential security or 70% for commercial, and subtract what your existing lender is owed. What is left is roughly what is available, between $20,000 and $5,000,000. Up to 80% on residential and 70% on commercial. Lower on large acreage, and LVRs may reduce on properties worth less than $800,000.
| Security | Value | Existing loan | Ceiling | Available |
|---|---|---|---|---|
| Residential, bank first mortgage | $820,000 | $460,000 | 80% — $656,000 | $196,000 |
| Residential, owned outright | $1,100,000 | — | 80% — $880,000 | $880,000 |
| Investment unit, bank first mortgage | $650,000 | $390,000 | 80% — $520,000 | $130,000 |
| Commercial, bank first mortgage | $1,900,000 | $900,000 | 70% — $1,330,000 | $430,000 |
| Two properties, cross-collateralised | $820,000 + $650,000 | $460,000 + $390,000 | 80% each | $326,000 |
Indicative only. Value is our own assessment of the security, not a formal valuation.
What a caveat means for you while it is on the title
Five things worth knowing before you sign, stated plainly, including the one most caveat lenders leave out.
- You are still the owner
- A caveat is a notice, not a transfer. You keep the property, the rent, the occupancy and the right to sell — subject to dealing with the caveat at settlement.
- The first mortgagee is unaffected, and still first
- Your bank's mortgage stays exactly as it was and ranks ahead of the caveat. If the bank ever enforced, it would be paid first from the sale; we would be paid from what remains. That is the risk we price, not one you carry additionally.
- Your bank's loan terms may mention encumbrances
- Some home-loan contracts ask the borrower not to grant further security without consent. A caveat is not a mortgage, but it is worth reading the clause. We will raise it if the structure suggests it matters.
- A caveat has to rest on a real interest
- A caveat lodged without a caveatable interest can be challenged and removed. Ours rests on the equitable interest your loan agreement grants — which is why the agreement is signed before anything is lodged, and why the caveat holds.
- It comes off when the loan is repaid
- A withdrawal of caveat is lodged on the day the payout is received, usually electronically and usually the same day. There is no lingering entry on the title.
From the call to the money
Tell us the deal
Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.
Minutes
Conditional approval
Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.
About 15 minutes
Funds released
As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.
As little as 24 hours
A caveat is the instrument where the third step is most reliably quick, because there is no consent to wait for. What makes a file fast, and what slows one down, applies here in full.
Choosing a caveat lender
Caveat lending attracts lenders of every kind, and the caveat itself does not tell you which you are dealing with. Ask whose money it is, who makes the decision and where, what is payable before an answer, whether a valuation is required, and what happens at the end of the term. Seven questions that tell private lenders apart has the full list. HomeSec lends its own money, decides in-house, charges nothing before conditional approval, requires no valuation and charges nothing to extend.
What it costs
Priced per file, on the property, the position, the amount and the exit. A caveat is the highest-priced of our three instruments over the same property and the fastest; where the date allows, a first or second mortgage costs less and we will say so. How it is priced, and every fee that exists.
Questions we get on the phone
Will a caveat stop me selling my property?
Do you tell my bank?
Is there a credit check to apply?
What happens if I cannot repay at the end of the term?
How much can I borrow against a caveat?
Can I get a caveat loan if I already have a mortgage?
What is a caveatable interest?
Who lodges the caveat, and where?
Do caveat loans work in every state?
What if there is already a caveat on my title?
Are caveat loans expensive?
Can I use this for personal purposes?
Tell us the amount, the purpose and what property is available, and we will tell you which instrument fits and what it costs. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
Private lending since 2004. These describe the same money from different angles; if a caveat is not the shape your file needs, one of these will be.
See if you qualify in sixty seconds
Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.
That's the HomeSec Advantage.
Reviewed by Catriona Anderson, General Manager