What is a Caveat Loan?
In general terms, a caveat is a notice lodged by a party with an interest in a property or land. It protects the property from being dealt with until the caveat is removed.
A caveat loan is a secured form of business lending that requires you to use your property as security against the loan. After you enter into a loan agreement with a lender, the lender will lodge a caveat over your property. That means you may not be able to use the property as collateral elsewhere or sell it until your loan has been paid off. A caveat loan can be a good short-term finance option for your business if you are struggling to secure other funding opportunities.
What Is a Second Mortgage?
As the name suggests, a Second Mortgage is a type of subordinate mortgage that uses your home as collateral while an original mortgage is still in effect. The amount that a homeowner can borrow varies and depends mostly on the home equity, which is the difference between the market value of the home and any remaining mortgage payments. A second mortgage can be used to help businesses get over a rough patch or achieve a specific financial goal without having to sell the property.