FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Details of The Somerville Small Business Loans
Let me know what you think of the Somerville Small Business Loans
Somerville unsecured loans provides amounts between $5,000 and $100,000. The terms range between 3 and 24 months. They also offer cash flow friendly repayments that are either per day or weekly.
What makes the Unsecured Loan different from a traditional company loan?
It is possible to apply for the Small Business Loan in under 10 minutes on the phone. You’ll receive an instant response and have the funds in your account within 24 hours. Traditional company loans reference an annual interest rate as well as other fees and charges. We offer a business loan is a pre-paid loan therefore you’ll know in advance the total amount due, which includes any fees, charges or charges. Then, it is broken down into weekly or daily payment amount.
What could you use the Small Business Loan be used for?
A Small Business Loan can be used to fulfill almost every business purpose including managing cash flows, company renovations, marketing to purchase inventory, new equipment, for general working capital and much more. The loan cannot be used for personal use.
About Larger Somerville Business Loans
What is the Larger Somerville Business Loan?
The Larger Business Loan is a larger loan size to support business expansion opportunities. Loans range from $100,000 to $500,000 over a fixed term for up to 36 months. The repayments are made weekly or fortnightly depending on your situation.
How’s the Origination Fee calculated?
It is important to note that the Larger Business Loan has an Origination Fee, which is determined at 2.5% of the loan amount.
Can I get the Larger Business Loan?
In order to be eligible for a loan of this size the company needs to have been in operation for at least 3 years, and have an annual income of $700,000. Your company must belong to a New Zealand Citizen (or Permanent Resident) over 18 years and have 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 larger business loan can be used for almost every company need, including company renovations, to purchase inventory or new equipment 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 required to access funding over $150,000. This can be done in the form of a charge on assets, which could also be registered with the PPSR or registering a caveat.
A personal or director’s guarantee is a promise to pay back a loan that is generally based rather than defining the security for a particular asset. The person who is signing the ensure is personally liable in the event that the company borrower is unable to make the repayment.
The Personal Property Securities Register (PPSR) is an online, central registry run by the New Zealand Government. It contains security interests registered in respect of personal property (including objects or assets). The PPSR gives preference over private property granted according to the date a registration of a security interest.
Caveats are legal document that is filed to offer an official notice of a claim to property.
What is a pre-approval minus Credit Check?
If you’re applying for the Larger Business Loan of $250K or more, we may offer an initial pre-approval to make the process. We might be able to make this decision without a credit verification and within 6 hours of the initial application. The pre-approval is based upon an initial assessment, which involves you answering some financial well-being checks. It is neither an offer nor a guarantee of credit. Acceptance without condition is subject to an exhaustive credit evaluation, and any offer you are offered could have different conditions.
Application process
Are I eligible for funding?
You can apply for an business loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and have a New Zealand company (with a valid NZBN/IRD)
- you must demonstrate at minimum 6 months of business (for the unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K or $500K)
How do I apply?
The process for applying is fast and easy. Just complete the online application within a couple minutes, and an experienced company lending specialist will contact you to guide you through the process.
To apply for up to $100,000, you’ll need ID details (valid Driver’s License), an NZBN/IRD that is valid and at least six months worth of bank statements.
If you’re looking for loans with larger sizes, you’ll also require:
$100K to $250K: Application requirements, including credit approval, 6-12 months of IRD statements, bank statements (if credit is over $150K).
$250K to $500K: Application details including credit consent as well as 12 months of bank statements, IRD statement and the last two years’ finalised financial statements, and interim financials for the current financial year including Aged Payables, Aged Receivables reports.
What speed will I be able to get an answer?
For an unsecured loan ($5K to $100K) we can often provide an answer within an hour if you apply at standard company time and allow us to use the advanced bank verification system link to instantly verify your bank’s information online. If you choose to upload copies of your banking statement, we’ll provide a decision in as little as an business day.
For the Larger Business Loan ($100K up to $500,000) we could be likely to offer you with pre-approval conditional to your application in about 6 hours. Once you have signed the pre-approval form, it will take approximately 2-3 days to receive final approval, however this could be shorter based on the specifics of each application. Some agreements have been approved in the space of 24 hours.
The most efficient method can be ensure you apply during standard company hours, and allow us to use the advanced bank verification system to instantly verify your bank information online. If you choose to upload the copies of bank accounts, it may take a bit longer.
How fast will I get the cash?
For the Small Business Loan ($5K or more) we usually offer a response in one hour – provided you submit your request in normal business hours and you allow us to use the advanced bank verification system link to instantly verify your bank information online. If you want to submit copies of your bank statements we can provide a decision in just one business day.
For the Larger Business Loans ($100K or more) We may be able to provide you with pre-approval conditional to your application within 6 hours. Once you have signed the pre-approval, the turnaround time is around 2-3 days for final approval, however it could be faster based on the specifics of each application. Certain deals have been approved in the space of 24 hours.
The fastest way would be to make sure you apply during standard business hours. You can also permit us to use the advance bank verification to verify your bank account information online. If you decide to send us copies of your bank accounts, it may take a bit longer.
How much can I borrow?
We offer the loan amount between $5,000 and $500,000. When you submit an application for a certain amount, we consider a variety of factors for determining the well-being that is your business and the amount of the repayments your business is able to afford. The total amount of your loan will be contingent on the specific circumstances that are unique to your company.
When you submit an application for a certain amount, we will consider a number of variables to determine how much we can lend you such as health that is your company and the amount of repayments your business can afford. The amount you receive from your loan will be contingent on the particulars the company.
Fees & repayments
How much should you charge for the cost of a business loan?
When you request the company loans, we’ll assess the risk profile the company and offer you with a customised offer including the loan amount, the terms and the interest rates. This company loan is a loan that is priced upfront so 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 am charged?
The interest rates on company loans rates depend on several factors such as the amount that is that is borrowed, what business assets the funds are used to purchase in addition to the industry that the company operates in, how long the company has been in operation as well as whether the business has sufficient cash flow to support the loan, as well as the general health or creditworthiness of the business.
What are the charges?
There aren’t any hidden costs with our company loans, and you’ll know exactly how much it is that you need to pay, and when, starting from the first day. There’s no compounding and no extra fees (as long as you are able to make your payments on time).
We don’t charge an application fee. You can get a cash loan absolutely no upfront cost and no obligation to proceed.
The Origination Fee includes the expenses associated with establishing and managing the loan. This is only a cost if you take out the loan. Our Origination Fee is 2.5% of the amount of the loan.
Can I pay out the loan in advance?
You can choose to repay the total amount of your loan at any point in time.
If you do decide to take this route, please call our helpful business credit specialists. They’ll provide you with details on repayment as well as an early payout amount. The figure will be calculated as the total of the principal amount remaining plus any accrued interest as of the time of early payment in addition to 1.5 percent of the remaining principal plus any outstanding fees.
How do you make repayments work?
To ensure you do not miss due dates and also to be in line with your cash flow cycle we provide repayments either weekly or daily. They are automatically deducted from your designated business account.
Security & privacy
Will my data be secure?
Making sure that your information is secure, and being clear about the ways we gather data, process, exchange and ensure the security of your information is of huge importance and is an essential part of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption protocols to safeguard your personal, sensitive financial and other data. Our funders are ISO 27001 qualified for our dedication to customer security and security. We utilise a sophisticated banking verification system to instantly confirm your bank account information online so we can offer an immediate response.
About business loans
What exactly is an asset-based loan (a secured loan)?
Asset-based borrowing occurs when the business owner utilises assets they own to make the loan. The asset could be an individual asset, such as the family home, or a business asset like a truck as well as a piece of machine.
The majority of banks, including the big banks, tend to secure loans against an asset. If you are having difficulty paying back the loan then your assets could be taken over by the lender. In essence, it is an opportunity to secure additional financing making use of the value of what you already have.
Should I require security to secure an business loan?
For loans of up to $150K, the requirement for asset security is not required in advance to gain access to the funds, however we do need the personal guarantee. So long as you comply with the loan terms (as detailed in the loan contract), asset security will never be required. For loans of over $150K generally, you are able to get an individual guarantee and security is provided in the form of charges on assets.