Direct answer
A caveat loan is a fast, business-purpose loan secured by a caveat lodged on a property's title, sitting behind any existing mortgage without needing the first mortgagee's consent. In Australia it typically funds in one to three business days, runs from a few weeks up to twelve months, and is used for working capital, an ATO debt, a settlement shortfall or a bridge to longer-term finance.
Who uses it and why
A caveat loan is reached for when a deadline is closer than a standard approval process can move. A director with a tax office payment plan at risk of default needs funds before a garnishee or penalty notice lands, not in six weeks once a bank has finished its assessment. A purchaser who is short on settlement day, perhaps because a sale on another property has been delayed, needs a bridge measured in days. A trading business that has an unexpected supplier demand or payroll gap, and equity sitting in a director's property, needs to draw on that equity without unwinding an existing bank facility to do it.
What these situations share is a property asset with equity behind it, and a borrower who cannot wait for a conventional approval cycle. Because a caveat sits behind whatever is already registered on the title, it does not require refinancing or disturbing an existing mortgage, which is often the whole point — the borrower wants to keep their bank relationship exactly as it is and simply add a short-term facility behind it. Typical borrowers include company directors, property owners with an urgent cash need, developers managing a settlement timing gap, and businesses with a temporary ATO debt.
It is worth being clear about what a caveat loan is not: it is not a long-term financing solution, and it is not the cheapest way to borrow against property. Borrowers who reach for this product accept a higher cost of funds in exchange for speed and light documentation, on the understanding that the facility will be repaid or refinanced within a defined, short window. Used well, it buys time; used as a substitute for a properly structured longer-term facility, it can become an expensive way to defer a problem rather than solve it, which is why the exit is discussed as thoroughly as the loan amount at the outset.
What lenders look at
Security is the entire foundation of a caveat loan. The lender is looking at the property behind the caveat — its type, location, marketability and, critically, the equity remaining once any prior mortgage is accounted for. Because the facility is unregistered against title in the way a mortgage is, lenders lend conservatively into that equity position, typically to a combined position of around 75–80% including anything already secured ahead of the caveat.
Speed is a defining feature, and the panel that can deliver it reflects that. Banks and larger institutional lenders are rarely set up to assess and settle a caveat facility inside one to three business days, so while the panel spans banks, private lenders, non-bank lenders and specialist funds, it is private lenders and specialist funds who typically write this product, assessing on the security and the exit rather than a full serviceability model. Documentation is correspondingly light — low-doc or no-doc — with the emphasis on a clear title search, a credible valuation basis, and a defined way the loan will be repaid.
The exit is scrutinised closely given the short term: a signed contract of sale, a refinance already underway, an ATO payment arrangement being cleared, or a trading position expected to resolve within the facility's life. Credit history is read for context rather than filtered on automatically — this is genuinely the widest-tolerance product in the category, and panel lenders will consider applicants with defaults, judgments or even a prior insolvency, provided the security and exit are sound.
Entity structure is checked but rarely a barrier: companies, trusts and sole traders are all routinely funded, and directors are generally asked to provide a guarantee alongside the caveat itself, reflecting the personal accountability lenders expect on a facility written this quickly. Where the property is held by a related entity rather than the borrower directly, lenders will want that relationship and the entity's authority to grant security clearly documented before funds are released.
Typical terms
|
|
| Size |
$20,000 to $2m, subject to lender assessment |
| LVR |
Typically up to 75–80% combined, including any existing mortgage |
| Term |
From a few weeks up to twelve months |
| Speed |
Indicative funding in 1–3 business days from a complete application |
| Security |
Caveat over residential or commercial property |
| Pricing |
Priced on risk and security; indicative range on enquiry |
Structures we see most
Caveat behind an existing bank mortgage. The most common structure — a caveat is lodged behind a registered first mortgage, giving the borrower access to equity without touching the underlying bank facility or triggering a refinance. This suits a borrower who wants to preserve an existing rate and relationship.
Caveat over unencumbered property. Where the property carries no existing mortgage, the caveat lender takes first-ranking practical priority, generally supporting a larger advance and, in some cases, a modestly better price than a facility stacked behind another lender.
Rolling caveat pending a slower approval. Used where a borrower's longer-term refinance or facility is already in train but will not settle in time — the caveat loan bridges the gap and is discharged once the primary facility completes.
Caveat for settlement or tax debt. A defined-purpose structure where the loan proceeds are earmarked for a specific settlement shortfall or an ATO liability, with the exit tied directly to the event that created the need — a sale, a refinance, or the resolution of the tax matter.
Costs and how we're paid
Pricing on caveat loans reflects the speed, the equity position and the risk being taken on light documentation, and is quoted on enquiry once a lender has reviewed the title and the exit — no flat rate applies across the product. Facilities may carry an establishment fee and, given the short term, a minimum interest period; all costs are set out in the loan offer before a borrower commits.
Solara is remunerated by the lender, the borrower, or both, depending on how the facility is structured, which may include a commission from the lender and/or a broker fee agreed with the borrower. Any commission or fee is disclosed in writing before an application proceeds.
Process and timing
- Initial scoping call — typically same day. We confirm the property, the existing encumbrance if any, the amount required and the exit.
- Title search and valuation basis — typically same day to 1 business day. A title search confirms the equity position; a desktop or short-form valuation is often sufficient given the term.
- Lender matching and submission — typically same day. We place the file with the private lenders and specialist funds best suited to the security and timeframe.
- Approval and offer — typically within 1 business day of a complete file.
- Caveat lodgement and settlement — typically 1–2 business days once terms are accepted and the caveat is lodged.
Frequently asked
What is a caveat loan?
It is a short-term, business-purpose loan secured by a caveat lodged on a property's title, sitting behind any existing mortgage. It does not require the consent of an existing mortgagee and is typically used where funds are needed faster than a conventional mortgage process allows.
How fast can a caveat loan be funded?
Indicative funding is one to three business days from a complete application, title search and a clear exit. It is one of the fastest property-secured facilities available because it relies on light documentation and a defined, short-dated repayment plan.
Can I get a caveat loan with bad credit or a default on my file?
Often, yes. This product has the widest credit tolerance in the category, and lenders will consider defaults, judgments and even a prior insolvency, provided the equity position and exit are sound. Every file is still assessed on its own facts.
Does a caveat loan require my existing lender's consent?
No. A caveat is lodged behind an existing registered mortgage without needing that lender's permission, which is part of why the structure is used when a borrower wants to leave an existing facility untouched.
What can a caveat loan be used for?
Common purposes include working capital, an ATO debt, a settlement shortfall, or bridging to a longer-term facility. It must be for business or investment purpose — consumer use falls outside what Solara arranges.
Is a caveat loan the same as a second mortgage?
Related but not identical. A caveat gives the lender a practical claim over the property pending a further step, while a second mortgage is a registered interest in its own right, generally supporting a longer term. Caveat loans are typically faster to arrange; second mortgages typically run longer.
How much equity do I need in the property?
Enough to support the advance within a combined position of around 75–80% including any existing mortgage. The available equity, not the total value of the property, is what determines how much can be lent.
What happens at the end of the term?
The loan is repaid from the agreed exit — a sale, a refinance, or the resolution of the underlying issue such as a cleared tax debt. Where the exit is delayed, borrowers should discuss extension or refinance options with their lender well before maturity.
Related products
Second mortgages — the better fit for a longer runway or a larger advance where a registered second-ranking interest, rather than a caveat, suits the timeframe.
ATO debt refinance — worth considering directly when the entire purpose is clearing a tax office debt, since it is structured specifically around that scenario and its typical resolution timeframe.
Settlement & GST funding — the closer match when the need is a specific settlement or GST shortfall rather than a general working-capital or urgent cash requirement.