In most cases a guarantor loan will be supported by property. A vehicle or company security may also be considered however.
Who can be my guarantor?
Usually this will be a family member or anyone close to you that is willing to support you.
If you do not have a person like this you may find someone prepared to be a guarantor in return for a share of the business.
What is a caveat?
A caveat is a caveat-able interest in property lodged at LINZ to protect an unregistered interest in the property.
When a lender refers to a caveat they refer to an ‘agreement to mortgage’ entered into by a guarantor. This in itself is not a piece of security but the right for the lender to oblige the guarantor to enter into an agreement (ie the mortgage).
When the caveat is registered with LINZ it will prevent the property being sold or a mortgage being taken over the property without the lender’s consent.