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Caveat loans

Can a new business get a caveat loan?

Updated Sept 2026 · Reviewed by The Lienhouse team

Yes. Trading history is not the basis of a caveat loan, so a company registered last month can qualify if the borrower or a guarantor owns property with equity and there is a credible exit. The lender will look harder at the purpose and the exit, because there is no track record to lean on.

Key takeaway
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.

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Banks generally want two years of trading before they lend to a business. That rule exists because they rely on income. A caveat lender relies on property and a repayment event, so the age of the business is not the deciding factor.

What a new business needs

  • Security. Property with equity, owned by the company, a related trust or a director who will guarantee.
  • A business purpose. Buying a business or premises, fit-out, stock, equipment, a deposit, working capital for a signed contract.
  • An exit. A sale, a refinance that is realistically available to a new entity, funds from another source, or the completion of the transaction being funded.

Where new businesses come unstuck

The exit. “We will refinance with the bank” does not work if the bank will not lend to a business with no history. “We will repay from profits” does not work over four months. Strong exits for new entities look like this: the director’s investment property is on the market; a term loan from a non-bank lender that accepts new ABNs has been approved in principle; an investor’s funds arrive on a known date; the asset being bought will be refinanced on a standard commercial mortgage once settled.

Purpose gets more attention

With no trading record, lenders ask more about what the money is for and who is behind it. A director with industry experience buying an established business is a different proposition from a first venture with no plan. A short written summary - what the business is, what the funds do, how the loan is repaid - goes a long way.

Often the better tool

For a new business that needs capital for more than a few months, a registered second mortgage or a low-doc business loan over one to three years is usually a better fit than a caveat loan, because the term matches the time a new business needs to establish income. More on entity structure is in new company borrowing against property.

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FAQ

Do I need an ABN or GST registration?

An ABN and a registered entity help establish business purpose. GST registration is not required in itself.

Can I use a caveat loan to start a business?

It can fund a purchase, fit-out or stock, but start-up funding repaid from future trading is a weak exit for a short loan. A longer facility usually suits better.

Will the directors have to guarantee?

Yes. With a new company that has few assets, the security and guarantees come from the people behind it.

Enquire

New entity, existing equity.

The amount, the asset and the timeframe. We’ll match you with a funder and email you their introduction. Reply to it and they’ll be in touch.

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