FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The New Zealand Small Business Loans
Tell me more about New Zealand Small Business Loans
New Zealand unsecured loans offers amounts of between $5,000 and $100,000, with terms ranging from 3 and 24 month and cash flow friendly repayments which can be made daily or weekly.
What makes the Unsecured Loan different from an traditional company loan?
You can apply for your Small Business Loan in under 10 minutes on the internet or over the phone, receive an answer within the same day and the funds could be in your account within 24 hours. Traditional business loans have an annual rate of interest along with other charges and fees. This business loan is a cash-based loan and you’ll be aware in advance of the total amount due, which includes any interest, fees or charges. Then, it is broken down into either a daily or weekly payment amount.
What could you use the Small Business Loan be used for?
The Small Business Loan can be used for nearly any company use, including control of cash flow business remodels and marketing, to purchase inventory or new equipment, or as general working capital, and much more. The loan cannot be used for personal purposes.
About larger New Zealand Business Loans
What is the Larger New Zealand Business Loan?
The Larger Business Loan is a larger size loan to aid in company growth opportunities. Loans range from $100,000 to $500,000 over a fixed term up to 36 months. Repayments are either weekly or fortnightly, depending on the flow of cash.
How is the Origination Fee calculated?
This Larger Business Loan has an Origination Fee which is calculated at 2.5 percentage of the amount of the loan.
Can I get the Larger Business Loan?
To qualify for a loan that is this large the business needs to have been in operation for at least 3 years with an annual turnover of $700,000. You must be a New Zealand Citizen (or Permanent Resident) over 18 years as well as own a New Zealand business (with a valid NZBN/IRD) and be able demonstrate at least 12 months of trading.
How can the funding be utilised?
A large company loan is a great option for almost every business need, including company renovations, purchase of new equipment or inventory or as general working capital and so much more. The loan is not available to fund personal expenses.
Is the Larger Business Loan one that requires security?
Asset security is needed for funding of more than $150,000. This is in the form of a charge on assets, and may include registration through the PPSR or filing as a caveat.
A personal or director’s ensure is a guarantee to repay a loan which is generally in nature rather than stipulating security over an asset. The person who signs the ensure is personally liable in the event that the company lender is not able to make the repayment.
The Personal Property Securities Register (PPSR) is an online central register operated by the New Zealand Government. It records security interests that have been registered in respect of personal property (including objects or assets). The PPSR permits preference over private property assigned according to the date a security interest that is registered.
Caveats are legal document that is filed to provide an official notice of a claim to a property.
What is a pre-approval minus Credit Check?
If you’re requesting an enterprise loan of more than $250,000 we may be able to provide a preliminary pre-approval to help simplify the process. We may be able to make this decision without a credit check, and within 6 hours of your initial application. This pre-approval is based on an initial assessment, which involves you answering some financial health questions. This is not an offer of credit or guarantee of financing. The approval of a conditional loan is subject to an assessment of your creditworthiness and any offer that you receive could be subject to different terms.
Application process
Do I qualify for funds?
You may be eligible for a company loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and own a New Zealand business (with a valid NZBN/IRD)
- can demonstrate at least 6 months’ worth of transactions (for a unsecured loan $5K – $100K) or 3 years of continuous trading (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is fast and simple. Just complete the online application within a couple minutes, and an experienced business loan specialist will call you to help you.
To be eligible for up to $100,000, you’ll need ID details (valid Driver’s License), a valid NZBN/IRD as well as at least 6 months’ worth of bank statements.
If you’re looking for loans with larger sizes, you’ll require:
$100K-$250K: Application requirements, including credit consent, 6 – 12 months of bank statements, IRD statement (if credit is over $150K).
$250K to $500K: Details of the application, including credit consent twelve months of bank statements, IRD statements as well as the two most recent years’ financial statements, plus interim financials for the current financial year as well as Aged Payables and Receivables summaries.
How quickly will I receive a decision?
For an unsecured loan ($5K and up) we can often offer an answer within an hour – as long as you apply in quality company hours and let us make use of the advanced bank verification system link to instantly verify your bank information online. If you choose to upload copies of your bank statement, we’ll provide an answer in as little as an company day.
For Larger Business Loans ($100K up to $500,000) we could be in a position to offer the conditional pre-approval in around 6 hours. Once you’ve signed the pre-approval form, it will take between 2 and 3 days for the final approval. However, this could be shorter based on the circumstances of each application. Certain agreements have been approved in the space of 24 hours.
The quickest method is to make sure you apply during standard company hours. Also, let us use the advanced bank verification system link to verify your bank information online. If you send us duplicates of your banking statement, it takes a bit longer.
What is the time frame to receive the cash?
For the Small Business Loan ($5K or more) We can usually provide a response in one hour if you make your application during normal business hours and permit us to use the advanced bank verification system link to immediately verify your bank account information online. If you choose to submit copies of your bank statements we can offer the decision in as little as 1 business day.
If you are applying for Larger Business Loans ($100K up to $500,000) we might be able to provide you with conditional pre-approval within six hours. Once you have signed the pre-approval form, it will take approximately 2-3 days to receive final approval, however it could be faster based on the specifics of each application. Certain offers have been approved within 24 hours.
The quickest method would be to ensure you apply during normal business hours. You can also permit us to use the advanced bank verification system to check your bank’s information online. If you decide to upload duplicates of your banking accounts, it may take a bit longer.
What’s the minimum amount I can borrow?
We offer loan amounts between $5,000 to $500,000. When you make an application for a specific amount we consider a variety of factors for determining how much we can lend you well-being that is your company and the extent of payments your company can support. The total amount of the loan will be determined by the particular circumstances of your business.
When you submit an application for a specific amount we take into consideration a variety of elements to assess your well-being of your company and the amount of payments your company is able to afford. The amount you receive from the loan will be determined by the specific circumstances that are unique to your business.
Fees & repayments
What is the cost for the cost of a business loan?
If you decide to apply for our company loan, we’ll assess the risk profile of your company and offer you with a customised proposal that includes the loan amount, the terms and interest rates. A company loan is a loan that is priced upfront which means you know the exact amount you will have to pay, including charges or interest.
What is the factor that determines the price I pay?
Interest rates for business loans rates depend on several factors such as the amount that is that is borrowed, what company assets the funds will be used for in addition to the industry that the business is operating in, how long the business has been in operation as well as what percentage of the business has enough cash flow to pay for the loan, as well as the general well-being as well as creditworthiness company.
What are the charges?
There are no hidden costs with our business loans. You’ll know exactly how much you need to pay and when, right from the day you sign up. There’s no compounding interest and there are no additional charges (as as you make your payments punctually).
We don’t charge an Application Fee. You can request a credit loan with absolutely no upfront cost and no obligation to proceed.
The Origination Fee is the cost associated with the setting up and management of the loan. It is only charged for this fee if you proceed with the loan. The Origination Fee for us is 2.5 percent of the loan amount.
Can I repay the loan in advance?
You can choose to repay the entire amount of the loan early at any time.
If you choose to take this route, please call our helpful business lending professionals. The professionals will offer you with details for repayment as well as an early payout amount. The figure will be calculated as the sum of the principal remaining plus any accrued interest as of the time of early payout and 1.5 percent of the principal balance plus any outstanding fees.
How do repayments work?
To make sure that you don’t miss payments and to work with your cash flow cycle we provide payments that are either daily or weekly. They will be automatically deducted from your business account.
Security & privacy
Will my information be protected?
Security of your data, and being clear about the ways we gather the information we collect, use, share and ensure the security of your information is of huge importance and a vital element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption standards to protect your sensitive, personal financial and other data. Our funders are ISO 27001 certified for our dedication to protecting the security of clients and privacy. We employ a highly sophisticated bank verification system that allows you to immediately verify your bank account information online so we can offer quick responses.
About business loans
What exactly is an asset-based loan (a secured loan)?
Asset-based borrowing is when a business owner borrows from an asset they own to get the loan. The asset may be an asset belonging to the personal, like the family home, or it could be a business asset such as a vehicle or piece or equipment.
The majority of lending institutions, not just the big banks, tend to secure loans against assets. If you have trouble paying back the loan, the asset might be sold by the lender. In essence, it’s a way of securing additional financing using the worth of the asset you already have.
Are I need security to secure a business loan?
For loans of up to $150K, there is no requirement for asset security before you can access the money However, we require a personal guarantee. need the personal guarantee. So long as you comply with your loan commitments (as detailed in your loan contract document), asset security is not required. For loans over $150K generally, you can get an individual guarantee and security in the form of the charge of assets.
