FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Brown Owl Small Business Loans
Tell me how you can avail the Brown Owl Small Business Loans
Brown Owl unsecured loans provides amounts of between $5,000 and $100,000. Terms range from 3 and 24 months and cash flow friendly repayments that are either per day or weekly.
What makes this Unsecured Loan different from an traditional company loan?
The application to this Small Business Loan in under 10 minutes on the internet or over the phone. You’ll get a same day response and funds may be on your account within 24 hours. Traditional business loans have an interest rate per annum plus other fees and charges. We offer a company loan is a loan that is priced upfront so you will know ahead of time the total amount to be paid, including any fees, interest or charges. Then, it is broken down into either a daily or weekly amount to be paid back.
What can be the Small Business Loan be used for?
A Small Business Loan can be used for nearly any business purpose including cash flow management, company improvements, advertising to purchase inventory, new equipment, as general working capital, and much more. The loan is not available to fund personal expenses.
Concerning Larger Brown Owl Business Loans
What is the Larger Brown Owl Business Loan?
The Larger Business Loan is a larger loan size to support business growth opportunities. Loans range from $100,000 to $500,000 for a fixed period of for up to 36 months. Repayments are either weekly or fortnightly to work with you cashflow.
How’s the Origination Fee calculated?
It is crucial to note that the Larger Business Loan has an Origination Fee which is determined at 2.5% of the loan amount.
Am I eligible for the Larger Business Loan?
To be eligible for a loan that is this large, your business needs to have been trading for at least 3 years, and have an annual income of $700K. You must be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old or have a New Zealand company (with a valid NZBN/IRD) and be able demonstrate at minimum 12 months of business.
What can I use the funding for?
A large company loan is a great option for almost all company reason, such as business remodeling, buying inventory or new equipment for general working capital and so much more. The loan cannot be used for personal purposes.
Is the Larger Business Loan one that is secured?
Asset security is required for funding of more than $150,000. It is usually by taking a charge over assets, and could include the registration of this on the PPSR or filing a caveat.
A director’s or personal guarantee is a promise to repay a loan which is generally based rather than defining security over an asset. The person who signs the guarantee is personally liable if the business the borrower fails to repay the debt.
The Personal Property Securities Register (PPSR) is an online, central register operated by the New Zealand Government. It lists security interests that are registered in respect of personal property (including the assets or goods). The PPSR gives preference over private property assigned in accordance with the date on which a security interest that is registered.
An affidavit is an official form of document to offer an official notice of a claim against a property.
What exactly is a preapproval without Credit Check?
When you’re applying for larger company loans of more than $250,000 we may be able to provide an initial pre-approval in order to ease the process. We could be able to make this decision without credit checks and within 6 hours of your initial application. This pre-approval is made based on a preliminary assessment which includes you answering a few financial health questions. It is not an offer or guarantee of funds. Acceptance without condition is subject to an exhaustive credit evaluation, and any offer that you are offered could be based on different conditions.
The application process
Do I qualify for funds?
You may be eligible for an company loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and own a New Zealand company (with a valid NZBN/IRD)
- you must prove at least 6 months of business (for the unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The application process is fast and simple. Simply complete the online form within a couple minutes, and a dedicated business loan specialist will contact you to guide you.
To be eligible for up to $100,000 you’ll require identification details (valid Driver’s License) as well as a valid NZBN/IRD and at least six months of bank statements.
For larger loan sizes, you’ll need:
$100K – $250K: Information about the application 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 as well as 12 month bank accounts, the IRD statements as well as the two most recent years’ financial statements, in addition to interim financials from the current financial year, Aged Payables and Aged Receivables Summary.
How soon will I hear a decision?
For an unsecured loan ($5K or more) we usually provide an answer within one hour – as long as you apply during quality business time and let us utilise the advanced bank verification system link to instantly verify your bank details online. If you opt to submit copies of your bank statements we can offer an answer in just an business day.
For the Larger Business Loan ($100K up to $500,000) we might be likely to offer the conditional pre-approval in about six hours. Once you have signed the pre-approval form, it will take approximately 2-3 days to receive final approval. However, this can be quicker based on the specifics of each application. Some offers have been approved within 24 hours.
The quickest method can be make sure you apply during standard company hours and allow us to use our modern bank verification to confirm your bank details online. If you upload copies of your bank statements , it takes a bit longer.
How quickly will I receive the money?
For the Small Business Loan ($5K or more) We can usually offer an answer within one hour – as long as you make your application at normal business times and let us utilise the advanced bank verification system link to instantly verify your bank details online. If you opt to upload copies of your bank statement, we’ll offer the decision within an business day.
For Larger Business Loans ($100K or more) we might be in a position to provide you with conditional pre-approval in around 6 hours. Once you have signed the pre-approval, turnaround times are approximately 2-3 days to receive final approval, however it could be faster based on the circumstances of each application. Some transactions have received approval within the space of 24 hours.
The most effective method would be to make sure you apply during normal business hours, and allow us to use our advanced bank verification system to verify your bank information online. If you send us copies of your bank accounts, it can take a bit longer.
What is the maximum amount I can borrow?
We provide loans ranging from $5,000 to $500,000. When you make an application for a certain amount, we consider a variety of factors to determine the well-being of the business and the level of payments your company will be able to support. The total amount of the loan will be determined by the specifics of your business.
When you submit an application for a specific amount we will consider a number of elements to assess your health of your business as well as the amount of the repayments your company is able to afford. The total amount of the loan will be determined by the particular circumstances the business.
Fees & repayments
How much do you charge for the cost of a company loan?
If you decide to request the business financing, we will assess the risk assessment of your business and offer you with a customised proposal that includes the loan amount, the terms and interest rates. It is a business loan is an upfront priced loan therefore you will know the exact amount you will have to pay, including interest rates, fees or charges.
What is the basis for the rate I pay?
The interest rates on business loans rates depend on several factors such as the amount that is borrowed, the business assets the funds will be used for, the industry the business operates in, how long the business has been in operation, what percentage of the business has sufficient cash flow to pay for the loan, and also the general health and creditworthiness of the company.
What are the charges?
There aren’t any hidden charges for our company loans. You’ll know exactly how much you be required to pay and when, starting from the very first day. There’s no compounding interest and there are no additional charges (as as long as you pay your payments punctually).
We don’t charge an Application Fee. You can apply for a loan with absolutely no upfront cost and no obligation to proceed.
The Origination Fee covers the expenses involved in establishing and managing the loan. It is only charged for this fee if you proceed with the loan. The Origination Fee for us is 2.5 percentage of the amount of the loan.
Do I have the option of paying off the loan in advance?
You can choose to repay the entire amount of the loan in full at any time.
If you decide to do this please speak to our friendly business credit professionals. They will provide you with details on repayment and an early payout figure. This will be calculated as the total of the principal amount remaining and accrued interest to the date of early payout and 1.5% of the principal balance plus any outstanding fees.
What are the repayment methods?
To help you avoid missing payment dates and to align with your cash flow cycle we offer repayments that are either weekly or daily. They are automatically deducted from your nominated business account.
Security & privacy
Will my data be protected?
Making sure that your information is secure, and being transparent about the ways we gather, use, exchange and ensure the security of your information is of huge importance and is an essential part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption techniques to protect your personal, sensitive financial and other data. Our funders are ISO 27001 qualified for our commitment to the security of our customers as well as their privacy. We use an advanced banking verification system to immediately verify your bank account information online so we can provide rapid response.
About business loans
What exactly is an asset-based loan (a secured loan)?
The term "asset-based" refers to borrowing where an business owner utilises the assets they have to secure a loan. The asset can be either a personal asset like the family home or it could be a business asset such as a vehicle as well as a piece of machine.
The vast majority of lending institutions, even the banks with the biggest size, prefer to secure loans against an asset. If you are having difficulty paying back the loan then your assets could be sold by the lender. In essence, it’s an opportunity to secure new funding using the value of what you already own.
Should 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 but we do need the personal guarantee. In the event that you fulfill the terms of your loan (as detailed in your loan contract) the security of assets will never be required. For loans over $150,000 generally, there is the option of a personal guarantee and security that is in the form an asset charge.