FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Avalon Small Business Loans
Tell me about the Avalon Small Business Loans
Avalon unsecured loans provides amounts between $5,000 and $100,000. The terms range between 3 and 24 month and cash flow-friendly repayments that are either per day or weekly.
What is how is the Unsecured Loan different from the traditional company loan?
Apply to this Small Business Loan in under 10 minutes online or by phone. You will receive an immediate response, and have the funds on your account within 24 hours. Traditional business loans reference an annual interest rate as well as other fees and charges. Our business loan is a loan that is priced upfront and you’ll know in advance the total amount due, which includes any interest, fees or charges. This is then divided into a daily or weekly payment amount.
What can the Small Business Loan be used for?
The Small Business Loan can be used to fulfill almost every company need, such as managing cash flows, business improvements, advertising to purchase inventory or new equipment, to fund general working capital, and much more. The loan cannot be used for personal purposes.
Concerning Larger Avalon Business Loans
What is the Larger Avalon Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund business expansion opportunities. Loans range from $100,000 to $500,000 over a fixed term with a maximum of 36 months. Repayments are scheduled weekly or fortnightly depending on your cash flow.
How’s the Origination Fee calculated?
The Larger Business Loan has an Origination Fee that is calculated at 2.5% of the loan amount.
Do I qualify for the Larger Business Loan?
In order to be eligible for a loan in this amount the business needs to be operating for at least three years, and have an annual income of at least $700K. The applicant must also be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old as well as own a New Zealand company (with a valid NZBN/IRD) and be able demonstrate at minimum 12 months of business.
How can the funding be utilised?
A large company loan can be used for almost all business need, including company renovations, to purchase equipment or inventory for general working capital and much more. The loan cannot be used for personal use.
Is the Larger Business Loan a secured loan?
Asset security is necessary to access funding over $150,000. This is as a result of an charge on assets and can include registration in the PPSR or registering a caveat.
A director’s or personal ensure is a commitment to pay back a loan that is general in nature, rather than stating the security for a particular asset. The person who signs the guarantee is personally liable if the company lender is not able to re-pay the debt.
The Personal Property Securities Register (PPSR) is an online, central register operated by the New Zealand Government. It records security interests that have been granted to individuals who own personal property (including the assets or goods). The PPSR grants priority over personal property to be granted according to the date the security interest that is registered.
A caveat is a legal document lodged to provide the legal claim against a property.
What is a pre-approval that does not require Credit Check?
If you’re seeking larger company loans that is greater than $250K it is possible to offer an initial pre-approval in order to make the process. We could be able to apply for this without a credit verification and within six hours of your initial application. The pre-approval process is based on an initial assessment that includes you answering some financial well-being checks. This is in no way an offer, nor is it a guarantee of funds. Acceptance without condition is subject to an assessment of your creditworthiness and any offer you receive could be on different terms.
Application process
Do I qualify for funds?
You may be eligible for a business loan if you;
- are a New Zealand Citizen (or Permanent Resident)
- are over 18 years, own a New Zealand business (with a valid NZBN/IRD)
- must show at least six months of business (for for the unsecured loan $5K – $100K) or 3 years of continuous trading (for the Larger Business Loan $100K up to $500K)
How do I apply?
The application process is quick and simple. Simply complete the online form in few minutes and a dedicated company credit specialist will call you to assist you.
To apply for up to $100,000 you’ll require proof of identity (valid Driver’s Licence) and an active NZBN/IRD, and at least six months of bank statements.
In addition, for larger loan sizes, you’ll need:
$100K-$250K: Information about the application including credit approval, 6-12 months of IRD statements, bank statements (if the loan is greater than $150K).
$250K to $500K: Details for application including credit consent twelve months bank statement, an IRD statement and the last two years’ finalised financial statements, as well as interim financials from the current financial year as well as Aged Payables and Receivables summaries.
How fast will I get an answer?
For an unsecured loan ($5K and up) we typically offer an answer within an hour if you apply within quality business times and permit us to make use of the advanced bank verification system link to instantly verify your bank information online. If you opt to submit copies of your bank statements , we are able to provide the decision within an company day.
For the Larger Business Loan ($100K or more) we may be likely to provide you with pre-approval conditional to your application within about six hours. After you’ve signed the pre-approval document, you will need to wait approximately 2-3 days to receive final approval, however this can be quicker based upon the circumstances for each application. Some offers have been approved within the space of 24 hours.
The quickest way to apply for you to apply is make sure you apply during normal business hours and allow us to use the advance bank verification to confirm your bank details online. If you choose to send us documents from your account statements , it will take a little longer.
How soon will I receive the cash?
For the Small Business Loan ($5K to $100K) we can often offer an answer in just one hour if you submit your request during normal business time and permit us to make use of the advanced bank verification system link to immediately verify your bank account information online. If you choose to upload copies of your bank statement, we’ll offer a decision in as little as the span of one business day.
For Larger Business Loans ($100K and up) we could be in a position to provide the conditional pre-approval within 6 hours. Once you’ve signed the pre-approval form, it will take approximately 2-3 days to receive final approval. However, this can be faster depending on the specifics of each application. Some agreements have been approved in less than 24 hours.
The most efficient method is to ensure you apply during normal business hours. You can also let us use the advanced bank verification system to verify your bank account information online. If you choose to send us documents from your account accounts, it will take a little longer.
How much can I borrow?
We offer loans ranging from $5,000 to $500,000. If you apply for a certain amount, we will consider a number of aspects in order to assess what is the well-being that is your business as well as the amount of payments your company is able to afford. The total amount of the loan will be determined by the specifics that are unique to your business.
When you submit an application for a certain amount, we take into consideration a variety of aspects to determine how much we can lend you such as health of your business and the extent of repayments that your company can afford. The amount you receive from your loan will be contingent on the specifics that are unique to your business.
Fees & repayments
What is the cost for a company loan?
If you decide to apply for our company loans, we will assess the risk profile that you have for your company and provide an individualised proposal that includes loan amount, term and interest rates. This business loan is an upfront-priced loan so you will be aware in advance of the total amount to be paid, including any charges or interest.
What determines the rate that I pay?
Interest rates for company loans rates depend on a variety of factors such as the amount that is of money borrowed, the business assets the money will be used for as well as the field the company operates in, the long the business has been running for, what percentage of the company has sufficient cash flow to fund the loan, as well as the general well-being as well as creditworthiness company.
What are the costs?
There are no hidden fees with our company loans, and you’ll know precisely what you’ll be required to pay, and at what time, from the day you sign up. There’s no compounding interest, and no extra fees (as as long as you pay your payments in time).
We don’t charge an Application Fee. You can make an application for loans without any upfront costs or obligation to proceed.
The Origination Fee includes the expenses associated in establishing and managing the loan. The only way to pay this fee if you choose to proceed with the loan. Our Origination Fee is 2.5 percent of the amount of loan.
Do I have the option of paying off the loan in advance?
You may choose to pay back the entire amount of the loan in full at any time.
If you are deciding to take this route, please talk to one of our helpful business credit professionals. The specialists will offer you with repayment details and an early payout figure. The figure will be calculated as the sum of the principal remaining and accrued interest to the time of early payment in addition to 1.5 percent of the principal amount remaining and any outstanding fees.
How do repayments work?
In order to help you avoid missing payments and to work your cash flow schedule, we offer repayments either weekly or daily. These are automatically deducted from your designated business account.
Security & privacy
Will my information be protected?
Making sure that your information is secure, and being clear about how we collect data, process, exchange and ensure the security of your information is crucial and is a crucial aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption techniques to protect your sensitive, personal financial information and our funders are ISO 27001 certified for our dedication to the security of our customers as well as their security. We make use of an advanced bank verification system to immediately verify your bank account details online to offer a fast response.
About business loans
What exactly is an asset-based loan (a secured loan)?
The term "asset-based" refers to borrowing where the company owner utilises an asset they own to make the loan. The asset may be a personal asset like the family home or a company asset such as a truck as well as a piece of machine.
The vast majority of the lenders not just the big banks, tend to make loans secured by an asset. If you are having difficulty paying back the loan, the asset might be offered for sale by the lender. In essence it’s an opportunity to secure additional financing using the worth of the asset you already own.
Are I require security to secure an business loan?
Up to $150,000 in loans the requirement for asset security is not required in advance to gain access to the funds However, we do need a personal guarantee. In the event that you fulfill the loan terms (as stipulated in your loan contract document), asset security is not needed. If you take out loans in excess of $150,000 typically, you will need personal ensure and security is provided in the form of a charge over assets.