FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
More about the New Zealand Small Business Loans
Tell me more about New Zealand Small Business Loans
New Zealand unsecured loans offers amounts between $5,000 and $100,000. The terms range between 3 and 24 month and cash flow-friendly repayments which can be made daily or weekly.
What makes this Unsecured Loan different from an traditional business loan?
It is possible to apply to get the Small Business Loan in under 10 minutes on the internet or by phone. You will receive an immediate response, and funds may be available in just 24 hours. Traditional business loans have an annual rate of interest together with additional fees and charges. The company loan is a cash-based loan therefore you’ll know ahead of time the total amount payable including any fees, interest or charges. Then, it is broken down into either weekly or daily installment amount.
What can be the Small Business Loan be used for?
The Small Business Loan can be used for nearly any company use, including managing cash flows, company remodeling, marketing for purchasing inventory or new equipment, for general working capital, and much more. The loan cannot be used for personal reasons.
About Larger New Zealand Business Loans
What is the Larger New Zealand Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund business growth opportunities. Loans range from $100,000 to $500,000 with a fixed-term that can last up to 36 months. Repayments are either weekly or fortnightly to work with the flow of cash.
How is the Origination Fee calculated?
A Larger Business Loan has an Origination Fee that is determined at 2.5 percentage of the amount of the loan.
Am I eligible for the Larger Business Loan?
In order to be eligible for a loan in this amount the business needs to be operating for a minimum of 3 years and generate an annual revenue of $700,000. Your company must belong to a New Zealand Citizen (or Permanent Resident) at least 18 years old as well as own a New Zealand business (with a valid NZBN/IRD) and be able of proving at least 12 months of trading.
How can the funding be utilised?
A Larger Business Loan is a great option for almost any company need, including business renovations, purchase of equipment or inventory, as general working capital and much more. The loan cannot be used to fund personal expenses.
Is the Larger Business Loan one that is secured?
Asset security is necessary for accessing funds over $150,000. This is by taking a charge on assets, and could include the registration of this with the PPSR or the registration of a caveat.
A personal or director’s guarantee is a guarantee to pay off a credit line that is general in nature, rather than stipulating the security of a specific asset. The person signing the guarantee is personally responsible if the business borrower is unable to make the repayment.
The Personal Property Securities Register (PPSR) is a central, national online register run by the New Zealand Government. It lists security interests that are granted to individuals who own personal property (including the assets or goods). The PPSR gives priority over personal property to be assigned in accordance with the date on which a security interest that is registered.
A caveat is a legal document that is filed to offer notice of a legal claim to property.
What exactly is a preapproval without Credit Check?
When you’re applying for an enterprise loan that exceeds $250K it’s possible to offer an initial pre-approval to ease the process. We may be able to do this without a credit verification and within six hours of your initial application. This pre-approval is made based on an initial assessment, which involves the answer to a series of financial well-being checks. It is not an offer or guarantee of credit. Unconditional approval is subject to an extensive credit evaluation and any offer that you may receive may be subject to different terms.
The application process
Do I have the right to receive funds?
You may apply for an 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)
- you must prove at least 6 months of trading (for you to qualify for unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is fast and easy. Just complete the online application within a couple minutes, and an experienced business credit specialist will be in touch to guide you through the process.
For a loan of up to $100,000 you’ll require proof of identity (valid Driver’s Licence) along with a valid NZBN/IRD and at least 6 months of bank statements.
Otherwise, for larger loan sizes, you’ll require:
$100K – $250K: Application requirements, including credit consent, 6 – 12 months of IRD statements, bank statements (if you have a loan of more than $150K).
$250K-$500K: Application details including credit consent, 12 months bank statement, an IRD statements as well as the two most recent years’ financial statements, in addition to interim financials from the current financial year as well as Aged Payables and Receivables reports.
How quickly will I receive a decision?
For an unsecured loan ($5K or more) we can often provide an answer in just one hour, provided you apply within quality business time and you allow us to make use of the advanced bank verification system to instantly verify your bank information online. If you want to upload copies of your banking statements , we’ll be able to provide an answer in as little as an company day.
If you are applying for a Larger Business Loan ($100K or more) we may be likely to offer you with a conditional pre-approval within about six hours. After you’ve signed the pre-approval form, it will take approximately 2-3 days to receive final approval. However, this may be quicker depending on the specifics of each application. Certain agreements have been approved in less than 24 hours.
The most efficient method can be make sure you apply during standard business hours. Also, permit us to use the advanced bank verification system to check your bank’s 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 to $100K) we usually offer an answer in just one hour – provided you submit your request at normal business time and let us utilise the advanced bank verification system link to immediately verify your bank account information online. If you decide to upload copies of your banking statements we can provide an answer within 1 business day.
For the Larger Business Loans ($100K and up) we may be capable of provide you with conditional pre-approval in about six hours. After you’ve signed the pre-approval document, you will require to wait around 2-3 days for final approval. However, this can be faster depending on the specifics of each application. Some deals have been approved in just 24 hours.
The quickest method for you to apply is make sure you apply during standard business hours and allow us to use the sophisticated bank verification link to confirm your bank details online. If you opt to upload the copies of bank statement, it may take a bit longer.
What’s the minimum amount I can borrow?
We offer loan amounts between $5,000 and $500,000. When you make an application for a certain amount we will consider a number of elements for determining what is the well-being that is your company as well as the amount of payments your business can afford. The total amount of your loan will depend on the specific circumstances of your company.
If you apply for a particular amount, we look at a range of aspects to determine the health that is your company and the level of repayments your company can support. The amount you receive from your loan will depend on the specific circumstances that are unique to your company.
Fees & repayments
How much do you charge for a business loan?
If you decide to make an application for business loans with us business credit, we will assess the risk assessment that you have for your business and offer an individualised offer that includes loan amount, term and the interest rates. A company loan is a loan that is priced upfront which means you know the exact amount due, which includes any charges or interest.
What is the basis for the rate I will be charged?
Business loan interest rates vary due to factors including the amount borrowed, what business assets the funds are used to purchase in addition to the industry that the company is operating in, how long the business has been in operation, whether the business has sufficient cash flow to fund the loan, and general health or financial standing of the company.
What are the costs?
There aren’t any hidden costs with our company loans, and you’ll know exactly how much you’ll be required to pay and when, right from the very first day. There’s no compounding interest and there are no additional charges (as long as you make your payments in time).
We do not charge an application fee. You can apply for a loan with absolutely no upfront cost and no commitment to apply.
The Origination Fee is the cost associated with establishing and managing the loan. It is only charged for this fee if you decide to take the loan. Our Origination Fee is 2.5% of the amount of the loan.
Can I repay the loan early?
You may choose to pay back the entire amount of your loan at any point in time.
If you decide to do this please talk to one of our helpful business loans experts. They will offer you with details on repayment along with an early payout estimate. This is calculated as the sum of the principal remaining and the accrued interest up to the time of the early payout in addition to 1.5% of the principal amount remaining and any outstanding fees.
What is the process for repayments?
To make sure that you don’t miss payment dates and to align with your cash flow standard, we provide payments that are either weekly or daily. They are automatically deducted from your company account.
Security & privacy
Will my data be secure?
Security of your data, and being clear about the ways we gather information, use it, and exchange it, as well as safeguard your data, is of paramount importance and is an essential part of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We use industry recognised encryption techniques to protect your personal, sensitive as well as financial data. Our funders are ISO 27001 certified for our dedication to protecting the security of clients and privacy. We use an advanced bank verification system that allows you to immediately verify your bank account details online so we can offer quick responses.
About business loans
What exactly is an asset-based loan (a secured loan)?
Asset-based borrowing occurs when an company owner borrows from assets they own to obtain the funding. The asset can be an asset belonging to the personal, like the family home or a business asset like a truck as well as a piece of machine.
The majority of lenders, not just the banks with the biggest size, prefer to guarantee loans against an asset. If you have trouble paying back the loan, then the asset could be taken over by the lender. In essence it is means of securing new financing using the value of what you already own.
What do I require security for an business loan?
For loans up to $150,000 it is not necessary to secure assets upfront to access the money, however we do require the personal guarantee. If you adhere to your loan commitments (as specified in your loan contract document) the security of assets will never be required. For loans that exceed $150K, generally there is personal ensure and security is provided in the form of charges on assets.
