FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Aotea Small Business Loans
Tell me how you can avail the Aotea Small Business Loans
Aotea unsecured loans offers amounts of between $5,000 and $100,000 with terms between 3 and 24 months and cash flow-friendly repayments which can be made daily or weekly.
What is the Unsecured Loan different from the traditional company loan?
Apply for the Small Business Loan in under 10 minutes on the phone. You’ll receive a same day response and funds may be on your account within 24 hours. Traditional company loans refer to an annual interest rate as well as other fees and charges. The business loan is a cash-based loan therefore you’ll be aware in advance of the amount you will have to pay, including the interest, fees and charges. Then, it is broken down into weekly or daily amount to be paid back.
What could the Small Business Loan be used for?
It is a Small Business Loan can be used for virtually every business need, such as the management of cash flow, business renovations, marketing for purchasing inventory or new equipment, to fund general working capital and much more. The loan is not available for personal purposes.
Concerning Larger Aotea Business Loans
What is the Larger Aotea Business Loan?
The Larger Business Loan is a larger loan size to support company expansion opportunities. Loans range between $100,000 and $500,000 over a fixed term that can last up to 36 months. The repayments are made weekly or fortnightly to work with your cash flow.
How is the Origination Fee calculated?
A Larger Business Loan has an Origination Fee, calculated at 2.5% of the loan amount.
Am I eligible for the Larger Business Loan?
To qualify for a loan in this amount the business needs to have been operating for a minimum of 3 years and have an annual turnover of at least $700K. It is necessary to be a New Zealand Citizen (or Permanent Resident) over 18 years as well as own a New Zealand business (with a valid NZBN/IRD) and be able demonstrate at minimum 12 months of business.
What can I use the funds for?
A larger company loan can be used for almost any business use, including business improvements, purchasing inventory or new equipment, as general working capital and much more. The loan cannot be used for personal reasons.
Is the Larger Business Loan a secured loan?
Asset security is needed for funding of more than $150,000. It’s by taking a charge on assets, and may include registration with the PPSR or the registration of as a caveat.
A personal or director’s guarantee is a promise to repay credit that is general in nature, rather than specifying the security of a specific asset. The person signing the guarantee is personally accountable if the business borrower is unable to repay the debt.
The Personal Property Securities Register (PPSR) is a central, national online registry run by the New Zealand Government. It contains security interests which are registered with respect to personal property (including goods or assets). The PPSR gives the priority of personal property granted in accordance with the date on which a registration of a security interest.
An affidavit is an official document filed to provide the public notice of a legal claim to property.
What is a pre-approval that does not require Credit Check?
If you’re applying for larger business loans of more than $250,000, we may offer an initial pre-approval to make the process. It is possible to make this decision without a credit verification and within 6 hours of the initial application. This pre-approval is made based on a preliminary assessment which includes you answering a few financial well-being questions. It’s in no way an offer, nor is it a guarantee of funds. The approval of a conditional loan is subject to an exhaustive credit evaluation, and any offer that you are offered could be subject to different conditions.
Can I be eligible for funding?
You may be eligible for a company loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and own a New Zealand business (with a valid NZBN/IRD)
- can demonstrate at least 6 months worth of trade (for a unsecured loan $5K – $100K) or 3 years of continuous trading (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is fast and simple. Just complete the online application in just a few minutes, and an experienced business expert in lending will contact you to help you.
For a loan of up to $100,000, you’ll need the right identification documents (valid Driver’s Licence) as well as an active NZBN/IRD, and at least six months worth of bank statements.
Otherwise, for larger loan sizes, you’ll require:
$100K – $250K: Information about the application including credit consent, 6 – 12 months of bank statements, IRD statement (if loan above $150K).
$250K – $500K: Details of the application, including credit consent twelve months bank statement, an IRD statements and the last two years’ finalised financial statements, as well as interim financials for the current financial year, Aged Payables and Aged Receivables Summary.
What speed will I be able to get an answer?
For an unsecured loan ($5K up to $100,000) we usually offer an answer within an hour if you submit your request within standard business timings and permit us to use the advanced bank verification system link to immediately verify your bank account information online. If you opt to upload copies of your bank statement, we’ll provide an answer within just one company day.
For Larger Business Loans ($100K and up) we may be able to provide you with conditional pre-approval in about six hours. After you’ve signed your pre-approval form, it will take about 2-3 days for final approval. However, this can be quicker based on the circumstances of each application. Some agreements have been approved within less than 24 hours.
The most effective method is to make sure you apply during standard company hours, and allow us to use our modern bank verification link to verify your bank account information online. If you send us copies of your bank statement, it may take a bit longer.
How fast will I get the funds?
For the Small Business Loan ($5K and up) we typically offer an answer within one hour – as long as you apply within standard business hours and permit us to use the advanced bank verification system to instantly verify your bank information online. If you want to upload copies of your bank statements, we’ll be able to offer a decision in just the span of one business day.
If you are applying for Larger Business Loans ($100K up to $500,000) we may be in a position to provide you with pre-approval conditional to your application in around six hours. Once you have signed the pre-approval, turnaround times are between 2 and 3 days for the final approval, however this could be shorter based on the particular circumstances of each application. Certain offers have been approved in just 24 hours.
The quickest method is to ensure you apply during normal business hours. You can also permit us to use the advance bank verification link to verify your bank information online. If you decide to upload duplicates of your banking statements, it will take a little longer.
What is the maximum amount I can borrow?
We offer loans ranging from $5,000 and $500,000. When you submit an application for a specific amount we take into consideration a range of elements for determining your well-being that is your company and the level of repayments that your company will be able to support. The total amount of the loan will be determined by the specific circumstances that are unique to your business.
When you apply for a particular amount, we will consider a number of variables to determine your well-being that is your business as well as the amount of repayments that your company will be able to support. The total amount of your loan will be contingent on the particular circumstances the business.
Fees & repayments
How much do you charge for a business loan?
When you request one of our business loans, we’ll assess the risk assessment for your business and offer you with a customised proposal that includes loan amount, term and the interest rates. A business loan is a loan that is priced upfront and you’ll be aware in advance of the total amount payable including any costs, fees, or interest rates.
What is the basis for the rate I am charged?
Business loan interest rates vary due to factors such as the amount that is borrowed, the company assets the funds will be used for in addition to the industry that the business operates in, the long the company has been operating for, in the event that the business has sufficient cash flow to cover the loan, and overall health and creditworthiness of the company.
What are the fees?
There aren’t any hidden charges with our business loans. You’ll know precisely how much you’ll be required to pay and at what time, from the very first day. There’s no compounding interest, and no additional fees (as long as you make your payments punctually).
We do not charge an Application Fee. You are able to request a credit loan with no upfront cost or commitment to apply.
The Origination Fee includes the expenses associated with the setting up and management of the loan. The only way to pay this fee if you decide to take the loan. The Origination Fee for us is 2.5 percent of the amount of loan.
Can I repay the loan early?
You can decide to repay all of your loan at any point in time.
If you do decide to do this please call our helpful company credit experts. They’ll provide you with details on repayment as well as an early payout amount. This will be calculated as the sum of the principal remaining plus any accrued interest as of the time of early payout, plus 1.5 percent of the principal remaining and any outstanding fees.
How do repayments work?
To make sure that you don’t miss payments and to work with your cash flow cycle we provide payments that are either weekly or daily. They are automatically deducted from your nominated business account.
Security & privacy
Will my information be secure?
The security of your personal information, as well as being clear about how we collect information, use it, and exchange it, as well as protect your information, is crucial and a vital aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption standards to protect your sensitive, personal financial information and our funders are ISO 27001 certified for our commitment to the security of our clients as well as their security. We employ an exceptionally sophisticated bank verification system that allows you to immediately verify the bank account details online, allowing us to provide an immediate response.
About business loans
What’s an asset-based borrow (a secured loan)?
The term “asset-based” refers to borrowing where the company owner uses an asset they own to obtain the loan. The asset can be either an asset belonging to the personal, like the family home or a business property like a truck or other piece of machinery.
The majority of lending institutions, not just the major banks, prefer to make loans secured by assets. If you’re struggling to pay back the loan then your assets could be transferred to the lender. In essence, it is an opportunity to secure new funding using the worth of the asset you already have.
Are I need security to get a business loan?
For loans that exceed $150K, no asset security is required before you can access the money, however we do require an individual guarantee. So long as you comply with the loan terms (as stated in your loan contract) the security of assets is not required. For loans that exceed $150K, generally, you can get personal ensure and security in the form an asset charge.