On this page
On a small screen, scroll the table sideways to see every column.
| Ask before signing | Why it matters |
|---|---|
| What interest supports the caveat? | The caveat does not explain the full underlying security agreement. |
| Is a mortgage also being granted? | Different documents can create different rights and priorities. |
| Does the existing lender need to consent? | Current mortgage terms and priority can affect the transaction. |
| What reaches my account after deductions? | Fees or retained interest may reduce usable funds. |
| How is the loan repaid and the caveat removed? | The sale or refinance must fit the maturity and release process. |
What a caveat does
A caveat records a claimed interest and can prevent registration of dealings covered by it. NSW Land Registry Services explains the eligible-interest and consent requirements (checked 5 October 2026). Rules and procedures vary by jurisdiction.
It is therefore too broad to say that a property can never be sold or refinanced once a caveat is lodged. The actual caveat, interest, consents and release arrangements need to be considered.
Read the security, not only the product name
A lender's enforcement rights come from the applicable documents and law. Ask whether the arrangement includes an equitable charge, a mortgage, personal guarantees or other security. Establish the position of any existing mortgagee.
Using a home for a business purpose puts a personal asset into the risk assessment. Its value does not make repayment affordable or make the commercial project more likely to succeed.
Prepare a property file and a separate repayment case
The property file should identify its owner, existing mortgages, current loan balances and the proposed transaction. Give the adviser and lender the same information, including other interests you know about and any planned sale. A property valuation answers a different question from whether the business can repay the advance.
For illustration, a property estimated at $800,000 with a $500,000 first mortgage has $300,000 of headline equity. That is not an offer to lend $300,000. The lender's accepted value, security position, costs and required margin can substantially change the amount available. A change in the first mortgage payout also changes the eventual exit proceeds.
Explain why the money is needed for this period and why ordinary finance cannot meet the need. If an expected sale will repay the advance, supply the sale status and net proceeds calculation. If the proposal is refinance, establish what evidence the future lender would need and whether the business could meet that assessment.
Understand who has to do what before funds arrive
An advertised fast process still requires the particular transaction to be ready. Title enquiries, valuation, document preparation, identity checks, advice and existing-lender consent can affect timing. Ask which steps are complete, which are outstanding and who is responsible for each.
Do not commit the advance to an irreversible purchase solely because an intermediary expects settlement by a certain day. Obtain the actual funding conditions and coordinate them with the payment deadline. If timing slips, the cost of missing the purchase or contractor payment belongs in the decision too.
Request two payout figures: on time and late
Ask for a written breakdown at the planned exit date and at a plausible delayed date. Include interest, establishment, valuation, legal, broker and discharge charges. Identify any minimum interest period and whether charges are deducted before funds reach you.
For an intended three-month loan funded by a sale, test a six-month exit as well. Confirm whether an extension is available and who decides. Simply adding three months of normal interest can understate the cost if the loan has matured, extension fees apply or default terms take effect.
Put the net sale or refinance proceeds beside those payout amounts. Allow for the first mortgage, selling costs and other amounts that must be paid. The plan needs enough cash to discharge the required interests, not merely a headline property value above the new loan.
Make the proposed exit independently workable
Refinancing the caveat loan later may require a different lender to accept the property, trading results and total debt. Ask what would be different at that point. Completed accounts, a finished development or a settled business contract may strengthen the evidence; simply waiting until maturity does not.
A business expecting a property sale should allow time for the release documents and payout instructions as well as marketing. Your conveyancer or lawyer can explain how the proposed loan would be dealt with at settlement. Request that advice before the facility is drawn, when changing the structure may still be possible.
With a private lender, establish the legal identity of the creditor, who receives upfront fees and which party can agree to an extension or discharge. Keep written terms and receipts. An intermediary's informal assurance is not a substitute for the creditor's contractual commitment.
If the shortfall is caused by recurring losses, compare the cost and likelihood of a business recovery before exposing further property equity. A sale of a non-essential asset, a negotiated payment arrangement or reducing the project may deserve consideration alongside another secured loan.
Distinguish a short bridge from long-term funding
A long-term business mortgage and a short bridging arrangement serve different purposes. Compare a conventional secured facility if time and eligibility allow. Borrowing against property to meet repeated operating losses requires a separate review of the business's prospects.
Make the legal review, net proceeds and release arrangements part of the decision before accepting the advance. If repayment relies on selling or refinancing, leave time for the consents and settlement work that exit requires.
Price the loan at the planned exit and a delayed exit
Illustration: $500,000 held for six months at 10% p.a. simple interest costs $25,000 in interest. A 2% establishment fee adds $10,000, bringing the assumed cost to $35,000 before other charges. Another three months at the same rate adds $12,500. This is a calculation, not a published caveat-loan rate or a promise an extension will be available.
A caveat-based short loan and a long-term commercial mortgage serve different purposes. Compare the actual interest basis, lender priority, legal fees and exit conditions. A broad bank lending average cannot establish what a private caveat lender will charge.