If you are a business owner with an urgent need for financing, then you may find yourself considering various types of loans that can help. Whether you need to pay a client, want to expand your business, or just need some cash to help ends meet until payments come in, talking to the bank about a loan is a great way to cover your expenses. There are certain drawbacks to some kinds of loans, however, such as processing fees or turnaround time, so always do your research on the best fit for you and your business before signing documents.
Real Estate as Collateral
One way to ensure a fast turnaround time on your loan application is to use your real estate as collateral. While this may make some people uncomfortable, it’s a perfectly legal way to have a loan issued. The lender won’t have primary ownership on the property; rather, their will just have an interest in it. If the loan goes unpaid, they would be able to sell the property to recoup their losses but there is no risk of that if the loan is paid according to the agreement.
Great Loan Choice
One loan that you can opt for is called a caveat loan. You may find yourself asking, “what is a caveat loan?” if you have only had experience with second mortgages in the past. Caveat loans are much faster to process than second mortgages since the property can’t be used as collateral for another loan when there is a caveat loan on it. This means that lenders can often issue loan approvals in as little as two days as the title search is fast, documents don’t have to be reviewed, and lenders don’t have to worry about being behind a primary mortgage in the case of a loan default.
These types of loans are especially great for business owners as the size of your company doesn’t matter. As long as you own property with a clean title, you can get the money that you need by using it as collateral. Even bad credit isn’t as much as a concern with a caveat loan as the bank is guaranteed to get the money owed to them in case of a default. If you own your property outright, you are an excellent candidate for this type of loan.
The next time that you find yourself short of funds, give caveat loans a second look. They are fast, are easy to apply for, and won’t tie up your business equipment as collateral or have the high interest rate of an unsecured loan. In addition, the speed at which business can move is only matched by a caveat loan. Don’t miss out on a rare opportunity because you have to wait for the bank to approve your loan.
