What is a Caveat Loan and how does it work?

A caveat loan is a short-term business loan secured against residential or commercial property. The lender registers a caveat on the property title, which records their financial interest and prevents the property from being sold or refinanced without consent.

Caveat loans are typically assessed based on property equity and the borrower’s exit strategy, rather than traditional bank financial criteria. They are designed for short-term use only.