What is a second mortgage business loan?
- A 2nd Mortgage business loan is a secured short term business loan that sits behind the current 1st mortgage on your property title.
- A single property can have multiple loans secured against it at the one time. They all set on the title in the order in which they came on. A 2nd mortgage is a business loan that is taken out at a later stage and sits behind the existing 1st mortgage.
- A 2nd mortgage is a much faster option than refinancing your current 1st mortgage. This can take up to 3 months, whereas our second mortgage loans are funded in 24 hours.
Second mortgage business loans Free up cash with the help of equity
The second mortgage loan is approved using equity in an existing property, it sits behind the current first mortgage on the same asset. While applying for this funding, you should know that you are applying to use the equity in your property. The second mortgage loan can be used for any business purpose such as stock purchase, cash flow or buying equipment. It is funding that allows more than one loan on the same property. So before applying for the loan, always understand how the process works and how to repay the money.
Advantages and Disadvantages of 2nd mortgage Loans
This type of funding comes with numerous pros, which are as follows
- The borrower can apply and get approval for a large amount against the property used as security.
- The loan usually has competitive interest rates compared to other financial solutions.
- The borrower will get a tax relief due to the interest rate paid on the principal amount of this funding.
- It allows the borrower to access the home equity, which will ease the cash flow crunch.
- More cash means more ways to pay and consolidate all the debts.
- It is an outstanding alternative for refinancing, which also involve other costs like existing fees, legal fees, and breaking cost.
Apart from the above pros, a second mortgage loan includes some cons also.
- There can be a foreclosure risk if the borrower suddenly stops making any payment.
- The first mortgagee may not consent to the funding, which could cause issues with some lenders.
Process of 2nd loan mortgage consent
Most people already have a first mortgage on a home or property, with a second loan mortgage, you can also apply for funds with the same asset as collateral or security. This funding will always come in the second ranking, which means when the property is sold, the second mortgage lenders will get their amount after the first mortgage lender get their entire funds back. That is why some financial institutions do not like to take a second mortgage, and if they do a higher interest rate may apply. But our companies consider every application with equal significance and approve the loan on its merit. However some lenders will want consent from the first mortgage lender to get approval for the funding, but not all lenders do.
Why apply for a second loan mortgage with us?
We offer the best-customized solution to business owners who are in search of a personalized second mortgage loan. We are one of the leading financial institutions in Australia, offering a premier business solution to all our clients during various stages, be it a giant enterprise or a small startup; we completely understand the requirement of reliable and reputable second mortgage lenders. Our company has already funded numerous business owners all across Australia through straightforward and easy application processes online. Even if your property has a first mortgage or limited equity, we can still consider a second loan mortgage. It will only take five minutes to complete the online application, and there will be no credit check in the initial stages.
Getting approval for a 2nd mortgage loan from any traditional bank or a financial institution can be difficult. Thus it is better to select a lender who will understand your situation and will approve a second loan mortgage as soon as possible. Even a business owner with a poor or bad credit score can apply to us as we consider every loan application differently and consider the future and current position of the borrower. Bad credit history can be due to several reasons in the past, and our company tries to overlook it.
With numerous years of experience and knowledge in this industry, we have come up with a repayment schedule that is flexible from person to person. You can borrow any amount of capital within the range of 20000 to 1000000 dollars with very few documents required.
Are Caveat loans and second mortgage business loans the same?
Yes both caveat and second mortgage loans are similar, however a second mortgage requires the lender to seek consent from the first mortgagee prior to funding.. Caveat loans, on the other hand, do not require consent and can settle very fast.
The primary Difference between 2nd funding mortgage and Home equity mortgage
You can get much faster approval for a second mortgage loan for business purposes than a home equity loan from a traditional bank. Second mortgages offer tax-deductible advantages to the borrower. Home equity loans take much more processing time, and demand more documents for the funds’ approval, making it difficult for the borrower to manage.
Do you still have any queries which have not been covered? Then contact our team and solve all your financial-oriented problems within days with us!
A Second Mortgage is an Interest Only Loan with a minimum term of 12 months
|Second Mortgage||Caveat Loan|
|How does a second mortgage business loan differ from a caveat loan?||A caveat loan is a very short term business loan that is for 1 to 6 months.|
|In some states such as Queensland, we cannot secure our loans with a caveat, so a 2nd Mortgage is the only way.||A caveat is registered on the title to secure the business loan against the property.|
Why take out one of these second mortgages?
- Unsecured business loans may not be available, or you may not qualify due to low or inconsistent cashflow, a low credit score, or your business is too new.
- A second mortgage loan doesn’t have the same strict requirements as an unsecured business loan.
- Second Mortgage business loans are often known as Interest Only loans, which means you only service the interest every month. This means the monthly payments are less than a Principal and Interest business loan.
- Second Mortgage loans are a much faster alternative to refinancing your current first mortgage loan.
Why are second mortgages more expensive than a first mortgage loan?
A second mortgage loan bears more risk for the lender than a first mortgage loan does. This is because mortgages are ranked in the order they were issued, and the mortgages that were issued earliest gains precedence over subsequent issued mortgages. Second mortgages are therefore generally more expensive to offset the higher risk.
Case Study: Using Second Mortgages for business growth
John who owns a real estate agency in Melbourne needed $300,000 urgently to buy a rent roll from another agent. He was also a developer and he knew he had a lot of money coming his way in 18 months time, which would repay our loan.
He spoke to his bank who have the home loan on his house, but they would take 3 months to advance the funds he needed, and he needed the money asap before another agent could beat him to the rent roll.
So John came to us and got an 18 month ‘Interest Only’ 2nd Mortgage loan from us in just 24 hours, using his home as security.
What can I use second mortgage business loan for?
There are no limits on what you can use a second mortgage business loan for. Our second mortgage business loans can be funded in just 24 hours, which makes them a lifesaver for business across Australia.
Below are some of the uses of second mortgage business loans in Australia:
- Start a new company or small business
- Expand your existing business
- Cover unexpected business costs
- Pay wages and other expenses
- Buy additional equipment to expand your business
- Renovate your business or do a rebranding
- Prepare for a seasonal influx
- Meet any other business costs
How to apply for second mortgage business loan?
To apply for a second mortgage loan with us is so easy. We value our customer’s time, and have simplified the application process so that it is both simple and quick to fill out.
Fill out our pre-approval form in minutes
Receive an immediate decision – upload a few documents for verification
Sign the loan agreement and have funded in your account that same day.
Frequently Asked Questions
We lend from $20k to $2m, however as these loans need to be secured by real estate, it will depend on how much equity is in the property (or multiple properties combined)
Let’s work out how much equity you have. Start by working out what 75% of your property value is. Then subtract what you owe on your current 1st Mortgage, and the answer is the amount we can lend you.
So if your property is worth $1,000,000, x 75% = $750,000. You owe $350,000, which means we can lend you $400,000 including costs.
Refinancing a property is a long and slow process, with an extensive number of documents needed to be provided.
A 2nd mortgage on the other hand is a much better option if fast approval is necessary.
It also allows for tax benefit deductions which is not permitted if you simply refinance your home loan.
Generally only 2 mortgages on a single property, as most reputable business lenders won’t sit 3rd on a title.
Taking a 2nd mortgage means that you are applying for another loan using the same property as security.
This is handy if you already have a 1st mortgage, but you just need a short term top up. It’s faster and easier than refinancing your current 1st mortgage.
Our minimum loan amount is $20,000, the maximum loan amount is determined by the available equity in your real estate asset.
Any business owner with a registered ABN or ACN can apply for a second mortgage. The purpose of the funds must be for business use and you need sufficient equity in real estate assets to qualify.
Loan terms range from 1 month to 12 months. Interest and fees can be capitalised or you can select a 12 month interest only option.
No, we can provide a second mortgage behind any bank lender.
Yes, credit history is not relevant to our funding, however in some cases we may require any court judgments to be repaid from the loan proceeds.
We are not able to provide financial advice and would recommend speaking with a financial planner or accountant.
Yes, an existing second mortgage can be refinanced with our loan product.