FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The New Zealand Small Business Loans
Tell me about the New Zealand Small Business Loans
New Zealand unsecured loans offers amounts of between $5,000 and $100,000. Terms range from 3 and 24 months. They also offer cash flow friendly repayments that are either per day or weekly.
What is the Unsecured Loan different from an ordinary company loan?
It is imaginable to apply for this Small Business Loan in under 10 minutes via the internet or by phone. You will receive an answer within the same day and the funds could be on your account within 24 hours. Traditional business loans have an annual interest rate as well as other fees and charges. Our company loan is an upfront priced loan and you’ll be aware in advance of the amount you will have to pay, including any interest, fees or charges. This is then divided into a daily or weekly payment amount.
What could the Small Business Loan be used for?
The Small Business Loan can be used for virtually every company need, such as managing cash flows, business renovations, marketing to purchase inventory or new equipment, to fund general working capital and so much more. The loan is not available for personal use.
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 business expansion opportunities. Loans range from $100,000 to $500,000 with a term fixed up to 36 months. Repayments are either weekly or fortnightly in order to accommodate the flow of cash.
How is the Origination Fee determined?
It is important to note that the Larger Business Loan has an Origination Fee that is calculated at 2.5 percent of the amount of the loan.
Can I get the Larger Business Loan?
To be eligible for a loan in this amount, your business needs to be in operation for at least 3 years and generate an annual revenue of $700K. The applicant must also be a New Zealand Citizen (or Permanent Resident) at least 18 years old as well as own a New Zealand company (with a valid NZBN/IRD) and be able to demonstrate at minimum 12 months of continuous trading.
What can I use the funding for?
A Business Loan of a larger size is a great option for almost every business purpose including business renovations, purchase of inventory or new equipment as well as for general working capital, and much more. The loan cannot be used for personal reasons.
Is the Larger Business Loan one that requires security?
Asset security is needed to obtain funding above $150,000. It’s by taking a charge over assets, and could include registration with the PPSR or filing as a caveat.
A personal or director’s guarantee is a guarantee to repay credit that is general in nature rather than defining the security for a particular asset. The person who is signing the ensure is personally responsible if the business creditor is unable to re-pay the debt.
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 items or assets). The PPSR grants the priority of personal property granted in accordance with the date on which a security interest was registered.
Caveats are legal form of document to offer the legal claim to a property.
What exactly is a preapproval without Credit Check?
If you’re applying for the Larger Business Loan that is greater than $250K, we may offer a preliminary pre-approval to help simplify the process. We could be able to do this without a credit check, and within 6 hours of the initial application. This pre-approval is based on an initial assessment, which involves the answer to a series of financial well-being questions. This is not an offer of credit or guarantee of financing. The approval of a conditional loan is subject to an exhaustive credit evaluation, and any offer you receive could be on different conditions.
Application process
Are I eligible for funding?
You may be eligible for an business loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are over 18 years, own a New Zealand company (with a valid NZBN/IRD)
- can demonstrate at least 6 months worth of trade (for for the unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is quick and easy. Just complete the online application in just a few minutes, and an experienced business credit specialist will contact you to assist you.
To be eligible for up to $100,000, you’ll need identification details (valid Driver’s License), an active NZBN/IRD, and at least 6 months’ worth of bank statements.
In addition, for larger loan sizes, you’ll also need:
$100K – $250K: Information about the application including credit consent, 6 – 12 months of bank statements, IRD statement (if credit is over $150K).
$250K-$500K: Information on the application including credit consent, 12 months bank statement, an IRD statements Last 2 years’ finalised financial statements, in addition to interim current financial year financials, Aged Payables and Aged Receivables Summary.
What speed will I be able to get a decision?
For an unsecured loan ($5K to $100K) We can usually offer an answer within one hour – as long as you make your application within quality company timings and permit us to use the advanced bank verification system link to immediately verify your bank account information online. If you decide to send us copies of your bank statements we can provide a decision in as little as one company day.
If you are applying for a Larger Business Loan ($100K and up) we could be capable of provide you with conditional pre-approval within six hours. Once you’ve signed the pre-approval document, you will need to wait approximately 2-3 days to receive final approval, however this could be shorter based on the circumstances of each application. Certain transactions have received approval within less than 24 hours.
The fastest way would be to make sure you apply during standard business hours and permit us to use the advance bank verification link to instantly check your bank’s information online. If you opt to send us documents from your account statements it can take a bit longer.
How quickly will I receive the funds?
For the Small Business Loan ($5K and up) we typically offer a response in one hour, provided you submit your request within standard business times and permit us to use the advanced bank verification system link to immediately verify your bank account information online. If you decide to send us copies of your bank statements we can offer a decision in just one business day.
If you are applying for Larger Business Loans ($100K to $500K) We may be able to offer you with pre-approval conditional to your application within about six hours. Once you’ve signed your pre-approval form, it will take around 2-3 days for final approval. However, this can be faster depending on the circumstances of each application. Some deals have been approved in the space of 24 hours.
The most effective method for you to apply is ensure you apply during standard business hours and let us use the advance bank verification to instantly check your bank’s information online. If you send us duplicates of your banking statements it takes a bit longer.
What is the maximum amount I can borrow?
We offer loan amounts between $5,000 and $500,000. If you apply for a certain amount, we will consider a number of elements for determining how much we can lend you health of your business as well as the amount of payments your company will be able to support. The total amount of your loan will be contingent on the particular circumstances for your company.
When you apply for a set amount, we will consider a number of variables to determine how much we can lend you such as well-being of the company and the level of repayments that your business is able to afford. The total amount of the loan will be determined by the specific circumstances for your business.
Fees & repayments
How much should you charge for the cost of a business loan?
If you decide to make an application for the business credit, we will assess the risk profile of your business and offer an individualised proposal that includes loan amount, term and interest rates. The company loan is an upfront priced loan so you will know the exact amount you will have to pay, including charges, interest rates or fees.
What is the factor that determines the price I’m charged?
Business loan interest rates depend on several factors including the amount of money borrowed, the business assets the funds are used to purchase, the industry the business operates in, how long the business has been operating and in the event that the company has sufficient cash flow to cover the loan, and also the general health and creditworthiness of the business.
What are the fees?
There aren’t any hidden charges for our business loans. You’ll be aware of the amount it is that you be required to pay, and when, starting from day one. There’s no compounding interest, and no extra fees (as long as you are able to make your payments punctually).
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 covers the costs associated with setting up and managing the loan. You are only charged this fee if you choose to proceed with the loan. Our Origination Fee is 2.5 percent of the amount of the loan.
Do I have the option of paying off the loan earlier?
You can decide to repay the entire amount of your loan at any point in time.
If you decide to do this please call our helpful business lending specialists. The specialists will provide you with details for repayment along with an early payout estimate. The figure will be calculated as the total of the principal remaining and accrued interest to the time of early payout plus 1.5 percent of the principal balance and any outstanding fees.
What is the process for repayments?
To ensure you do not miss payment dates and to align your cash flow cycle we provide repayments either daily or weekly. They are automatically deducted from your designated business account.
Security & privacy
Will my information be secure?
Protecting your information, and making it clear the ways we gather data, process, exchange and ensure the security of your information is vital and is a crucial part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption protocols to safeguard your sensitive, personal and financial data and our funders are ISO 27001 qualified for our dedication to security for our clients and security. We utilise a sophisticated bank verification system to immediately verify the bank account details online. This allows us to provide quick responses.
About business loans
How do you define asset-based lending (a secured loan)?
The term "asset-based" refers to borrowing where the business owner borrows from assets they own to get the loan. The asset may be an asset belonging to the personal, like the family home, or an company asset such as a truck or piece of equipment.
The vast majority of lending institutions, not just the big banks, tend to make loans secured by assets. If you’re having 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 worth of the asset you already own.
Do I require security for an company loan?
For loans that exceed $150,000, no asset security is required upfront to access the money but we require a personal guarantee. need an individual guarantee. In the event that you fulfill the loan terms (as specified in the loan contract) and you are able to meet your obligations, asset security is not needed. If you take out loans in excess of $150K typically, you will need a personal guarantee and security that is in the form a charge over assets.
