How is lending criteria different for second mortgage lending?

What is the difference between second mortgages and caveat loans?
May 28, 2020
What equity do I need for 2nd mortgage finance?
May 28, 2020

The lending criteria for private lenders vary a lot with banking finance. By comparison, businesses can enjoy the simplicity of the second mortgage loan lending criteria. See below some lending criteria for second mortgage business finance:

  • Firstly, the loan must be for the majority business purpose.
  • Consequently, greater than 50% of the second mortgage finance must be for business purpose.
  • Secondly, minimal or no income verification is required for most loans.
  • Thirdly, short term and start-up business ventures finance with one day ABN registration.
  • Fourthly, the second mortgage loans are useful when funds are needed urgently.
  • In particular, debt consolidation is available for tax debt and other business debt.
  • Importantly, some private lenders don’t require property valuations. Therefore, online or real estate agent valuations may be acceptable.
  • Also, credit defaults, court judgements, and various insolvency can be accepted.
  • In particular, fixed interest is payable for the loan term. However, some lenders offer variable rates.
  • Certainly, LVR’s available are generally to 80% inclusive of capitalising interest and loan set up costs.
  • Otherwise, if the tax debt is a personal debt, then you may need to refinance a home loan to pay the tax debt.
  • Finally, 2nd mortgage loans or caveat loans can be used to pay a business debt and mortgages in arrears or land rates arrears.

Related Information on second mortgages.