If you are a business owner, you must be aware already that sometimes financial expenses can come at some unexpected times. These can be funds to expand your business, settle unpaid invoices, buying new equipment, paying employees and so on. Usually, at such times, you may not be prepared financially even if your business is doing well. If you need such important and quick financial assistance, caveat loans are there for you. Caveat loans are short-term business loans which are often disbursed fast to enable you to to settle your financial needs as soon as possible. They are usually given at low-interest rates, and the lenders provide a flexible and easy repayment terms. You should, however, be very careful with this since all the lenders can be clear on their terms. Some have some hidden charges that will make your repayment amount much higher than you anticipated and signed up for. These calls for you to carry out due diligence and enough research to ascertain which of the lenders offer the best caveat loans in terms of loan repayment terms and interest rates.
Caveat loans basically involve you being given a business loan after giving your property as an indemnity. If for one reason or another you fail to repay the loan, the lender becomes co-owner of the property in question. This, without doubt, is the best form of secured, albeit arguably. This is because you don’t risk your being sold which is scary for most business owners. There is nothing as devastating as your valued property, say your home, being sold off to repay a loan you took. The fact that you won’t have to worry about losing your property makes caveat loans favorable, and this has pulled many business owners among others.
With that said, caveat loans have several outstanding things that make them attract many clients. Below are five of them;
i. Fast approval
In the past, especially with the traditional lenders such as banks, it would take an unreasonably long time to have your loan approved. This time could sometimes run into months. This was very unfavorable as the financial needs cannot wait for that long, given that the more you delay settling your urgent business financial needs, the more likely your business will suffer immensely ad this sometimes can lead to business failure and closure. This eventually led to most small businesses not being successful.
The situation has immensely changed ever since with the advancement of technology. Back then, everything was done manually including all the paper works and approvals. Right now, most of the processes are done online, in fact, for some lenders, everything is done online. This is from the application process to submit the necessary documents, to signing the agreement and finally loan approval. For caveat loans, this process is further simplified as they require fewer documents and processes. Once you have applied for a caveat loan, the lender as well approves the loan in record time. This is a welcome feature that most business owners want and would like to experience. You will have the funds in good time to settle the urgent business needs, and this will greatly boost your business. You will be able to realize your set goals in business.
ii. High security
Caveat loans are a type of secured loans. This means you have to provide an asset as a security for the loan. For the lenders, this acts as their back up in case you default in paying the loan. The fact that you have to provide a form of security for you to access caveat loans means that this is a type of a business loan with high security as far as the lender’s side of things is concerned.
iii. The funds can only be used for business
Unlike some other types of business loans where you can use some of the amounts for other purposes, caveat loans should be used entirely for business use. This is clearly stated as you apply for the loan. In fact, legal action would be taken in case you use the caveat loan for any other financial need other than the sated business financial needs. This protects the caveat loan from being misused. This misuse always leads to business owners being unable to repay the caveat loan. This is unique to caveat loans.
iv. Easy and flexible repayment terms
Caveat loans usually have repayment terms of up to three years. This makes it easy for you to repay the loan. You should discuss with your chosen lends on the repayment plan that will best work for you and your business.
v. Low-interest rates
Compared to the other loan types, the interest rates that are charged for caveat loans by the lenders are usually lower.