Guides & answers

Yes - a caveat loan or second mortgage can sit behind a bank's first mortgage, letting a company or trust release equity without refinancing the senior loan.

Caveat loans are faster and shorter; second mortgages are registered security for larger, slightly longer needs - both sit behind your existing first mortgage.

Companies and trusts borrowing for business purposes don't need a credit licence - the consumer-credit regime that requires one doesn't apply to business-purpose lending to non-individuals.

A simple caveat-backed loan can settle in 24-72 hours; a second mortgage or more complex deal typically takes several days to a week or more - speed depends on the security, the valuation and a clear exit.

A business purpose declaration is a signed confirmation that a loan is for business or investment purposes, keeping it outside Australia's consumer credit code - though companies and trusts usually sit outside that regime regardless.

A caveat loan is fast, short-term business funding secured by a caveat on property you already own, sitting behind your existing mortgage without refinancing it.

Asset-backed lending raises capital against an asset you already own - usually property - judged on the security and a credible exit rather than income, with the specific instrument chosen for speed, size and exit.

You can typically borrow up to 65-75% of a property's value (combined LVR) for business purposes - up to 75% via a second mortgage, bridging or equity release, up to 70% for a first mortgage, and up to 65% via a caveat loan - all subject to assessment.

Extensions are common when requested before expiry with a credible exit, and cost a fee plus interest for the extra months; repeated rollovers are a sign the loan should be refinanced into a longer facility.

A caveat loan suits a one-off cash flow gap that a dated event will close; for ongoing shortfalls it is the wrong tool, and a longer or revolving facility is cheaper.

A director's home can secure a company caveat loan through a guarantee and charge, provided the purpose is genuinely business, co-owners consent with independent advice, and the risk to the home is understood.

A new business can get a caveat loan on the strength of property equity and a defined exit; with no trading history, lenders focus on the purpose, the people and how the loan is repaid.

A trust can take a caveat loan through its trustee if the deed gives power to borrow and charge trust property; expect a deed review and guarantees from the people behind the trustee.

A listed or contracted property can secure a caveat loan with the sale as the exit; an exchanged unconditional contract is strongest, and the loan is repaid from proceeds at settlement.

A third-position caveat is possible where combined LVR still leaves clear equity, but it is scarce and dear; replacing the existing second mortgage with one larger facility is usually better.

Rural property can secure a caveat loan at lower LVRs and with a full rural valuation; lifestyle acreage near a regional centre is strongest, remote or highly specialised holdings weakest.

Vacant land can secure a caveat loan, typically at a lower LVR than improved property; zoning, services, location and a defined exit decide how much and at what price.

An ATO debt is not a barrier to a caveat loan - it is often the purpose - provided there is equity in the property, a credible exit and, usually, the ATO is paid directly at settlement.

A current ATO payment plan does not prevent a caveat loan; lenders will want its terms, and paying the ATO out is often cheaper than carrying non-deductible interest at 11.43%.

Bad credit rarely stops a caveat loan because the assessment is on equity and exit; it can lift the rate and lower the LVR, and bankruptcy or insolvency are still hard stops.

No financials are generally needed for a caveat loan; lenders rely on the title, the mortgage statement, ID, entity documents, a business purpose declaration and evidence of the exit.

A caveat without consent can be a technical default under a bank mortgage, but banks rarely act on it while their loan is performing; the risk rises with commercial review clauses, arrears and long-running caveats.

You can refinance with a caveat on title, but the incoming lender needs it gone: the caveat loan is paid out at settlement and a withdrawal of caveat is lodged alongside the new mortgage.

Low-LVR caveat loans on standard metro property often proceed on a desktop or kerbside valuation; larger loans, higher LVRs and unusual security need a full valuation, which adds days and cost.

A caveat is public on the title but banks are not usually notified when one is lodged; they see it at the next title search, and most mortgages technically require consent to further security.

Enquiry, title and equity check, indicative terms, documents, caveat lodged, funds released - a clean caveat loan moves through all six steps in days, and the caveat comes off title when the loan is repaid.

A caveat comes off by the lender lodging a withdrawal of caveat, normally in the same electronic settlement that repays the loan; the borrower should confirm it with a fresh title search.

Caveat loans are priced per month, indicatively from 1.65% a month, and the rate is set by LVR, the security, the position behind other lenders and how certain the exit is - not by the borrower's income.

Expect an establishment fee, legal and lodgement costs and sometimes a valuation fee on top of interest; ask for every fee in dollars and add them to the interest to get the true cost.

Past the term, default interest applies and the lender can step up to a registered mortgage and a forced sale; an extension or refinance arranged before expiry is nearly always cheaper than default.

The core of a caveat loan agreement is the charging clause that gives the lender a caveatable interest in the property; the rest covers interest, fees, default, guarantees and the business purpose declaration.

Caveat loans indicatively start around $50,000; the upper limit is set by equity, at up to about 65% combined LVR, and larger or longer needs usually suit a registered mortgage instead.

Regional security is fundable, best in large centres with diverse economies; small, remote or single-industry towns mean lower LVRs, a full valuation and fewer willing lenders.

Tasmania, the ACT and the NT each have their own caveat rules; ACT titles are Crown leases, NT non-consent caveats can lapse after three months, and lender appetite is thinner in all three.

Queensland and NT caveats can lapse after three months unless lodged by consent; in other states caveats persist, but owners can force a 14 to 30 day court deadline on the caveator.

There is no mortgage or stamp duty on a caveat loan anywhere in Australia; the only government charges are registry fees to lodge and later withdraw the caveat.

NSW caveats are lodged through NSW LRS under the Real Property Act 1900 and do not expire by themselves, but a 21-day lapsing notice can force the issue; there is no mortgage duty.

Queensland caveats can lapse after three months unless lodged with the registered owner's consent, so lenders use consent caveats; lodgement is electronic and clean files settle in days.

SA caveats are lodged with Land Services SA under section 191 of the Real Property Act 1886, last until withdrawn, and can be tested by a 21-day notice; priority notices help with timing.

Victorian caveats are lodged with Land Use Victoria under the Transfer of Land Act 1958 and last until withdrawn, subject to the section 89A process that gives the caveator 30 days to go to court.

WA caveats are lodged with Landgate under the Transfer of Land Act 1893, can be absolute or subject to claim, and can be tested by a 21-day notice requiring court proceedings.

Registries may not require the first mortgagee's consent, but bank mortgage terms almost always do; consent plus a deed of priority is the clean route, with a caveat or a refinance as fallbacks.

Allow one to three weeks for a business second mortgage; valuation and documents take days, and the first mortgagee's consent is the step that decides whether it is one week or four.

Gross second mortgage = value x combined LVR, less the first mortgage limit; net funds are lower again after fees and any capitalised or prepaid interest.

NSW second mortgages register with NSW LRS without registry-level consent from the first mortgagee since 2021, but bank consent and a deed of priority are still normally obtained; no duty applies.

Second mortgages are assessed on combined LVR, first mortgage conduct, security quality, business purpose and exit - with financials in a supporting role - indicatively to about 75% combined LVR.

Use an overdraft for small recurring working capital swings and a second mortgage for a larger one-off need secured against property; they are complements, not substitutes.

Keep a cheap first mortgage and add a second for short or modest needs; refinance the lot when the need is long-term, the first mortgage is already dear and a mainstream lender will approve.

Business second mortgages indicatively price from 0.975% a month plus about a 2% fee; combined LVR, security quality and the exit drive the rate, which sits between first mortgage and caveat pricing.

On a sale, proceeds pay the first mortgage, then the second, and both are discharged at settlement; if the price will not cover both payouts the sale cannot complete without the lenders' agreement.

A deed of priority, signed by both lenders and the borrower, fixes the ranking and caps the first mortgagee's priority amount, protecting the equity the second mortgage relies on.

A restructuring plan contribution is often funded by a director or related entity borrowing against property; a lump sum offer is stronger than instalments, but the risk moves onto that property.

Paying the tax debt in full ends a garnishee; funding against property can do that in days, and a lump sum plus a plan often secures withdrawal where full payment is out of reach.

A trust holding the property can borrow and on-lend to, or guarantee, a related company to clear its tax debt if the deed allows and the trust benefits; get accountant advice on the on-loan first.

An ATO default listing blocks most bank credit but not asset-secured funding, and clearing the debt with that funding is what gets the listing removed.

A defaulted ATO plan makes the whole debt due and restarts enforcement; asset-secured funding against property can pay it out in full, which a second payment plan usually cannot match.

Super guarantee charge is non-deductible and exposes directors personally; funding against property can pay it in full quickly, and lodging the SGC statements on time is what keeps options open.

An ATO statutory demand runs a strict 21-day clock; funding against property can pay it in time, and once the period expires the presumption of insolvency makes everything harder and dearer.

Non-deductible GIC at 11.43% equals a deductible loan rate of about 15.2% for a 25% taxpayer, so borrowing against property to clear the ATO is often cheaper as well as safer.

Expect to provide ATO running balances, lodgement status, any notices and plan letters, and a payout figure; the lender's goal is a nil balance at settlement with no surprises behind it.

Lenders normally pay the ATO directly at settlement using the taxpayer's payment reference number, because clearing the debt protects their security; confirm the nil balance afterwards.

A company borrows and mortgages in its own name, signed by its directors. Expect ASIC and PPSR searches and director guarantees as standard.

A new company can borrow against property on the strength of the security, director guarantees and the exit. Trading history is not the test.

The trustee borrows, not the trust. The deed must give power to borrow and mortgage, and the lender will read every page and every variation.

Your home can secure a business-purpose loan to your company. Every owner on title must consent, and the home is genuinely at risk if the loan is not repaid.

The borrower and the property owner do not have to be the same entity. The owner gives a guarantee and third party mortgage, if its constitution or trust deed allows.

Property inside an SMSF is not available as security for business borrowing. Look to property held personally, in a company or in a family trust.

Director guarantees are standard on company and trust loans. The property is the first source of repayment, and the guarantee covers any shortfall.

Unit and hybrid trusts can borrow against property. Have the deed, all variations, the unit register and the unit holders' agreement ready.

Deductibility follows the use of the money, not the security. Business use generally means deductible interest, with borrowing costs spread over the term.

Do not sign a business purpose declaration unless it is true. It does not make a personal loan a business loan, and it can leave you worse off.

No-presale development finance is available from non-bank lenders. Expect a higher rate and more conservative leverage in exchange for starting the build now.

Start the conversation at least 8 weeks before expiry. A refinance arranged before default is cheaper and quicker than one arranged after it.

A 10% discount on the last units usually costs more than 12 months of residual stock interest, so financing wins when the stock is saleable at fair value within the loan term.

Work out the weighted average rate and total fees of the two-lender stack, then compare it with the single stretched senior rate. The cheaper headline is not always the cheaper project.

Stretched senior is one first mortgage loan at higher leverage and a blended rate - simpler than senior plus mezzanine, at a similar overall cost.

Business-purpose private lending is outside consumer credit law but inside the general law. Borrowers have fewer automatic protections, so advice and due diligence matter more.

Read the higher rate, not just the headline. It applies from the day of default on the full balance, and it is the real cost of a late exit.

Net advance, total dollar cost, repayment date and default terms. Get all four in writing for each offer before choosing.

Real lenders are paid from settlement proceeds. Anyone asking for a large fee before funding, with guaranteed approval, is not a lender.

Low doc means alternative income evidence. No doc means no income evidence, with the decision resting on the property and the exit. Both still need identity, title and purpose documents.

Prepaid interest reduces the cash you receive. Capitalised interest increases the balance you repay. Both must fit inside the lender's maximum loan to value ratio.

Private lenders use private capital, lend against property, decide quickly and charge more. They suit short, specific business needs with a clear way out.

No exit, no loan. The best exits are specific, evidenced and achievable inside the term, with a fallback if the first plan runs late.

A failed auction settlement can cost the 10% deposit. A short private loan, settled in days, protects it and buys time to arrange long-term finance.

Most bank declines are policy declines. With property equity and a credible exit, a company or trust can usually still borrow, at a higher cost, for a shorter term.