FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Arakura Small Business Loans
Let me know about the Arakura Small Business Loans
Arakura unsecured loans offers amounts of between $5,000 and $100,000. The terms range between 3 and 24 months. They also offer cash flow-friendly repayments that are either daily or weekly.
What is this Unsecured Loan different from a traditional company loan?
Apply for the Small Business Loan in under 10 minutes online or over the phone, receive an answer within the same day and the money could be available in just 24 hours. Traditional business loans have an annual rate of interest along with other charges and fees. Our business loan is a cash-based loan and you’ll know ahead of time the amount you will have to pay, including any fees, charges or charges. Then, it is broken down into weekly or daily amount to be paid back.
What could be the Small Business Loan be used for?
It is a Small Business Loan can be used for nearly every company use, including managing cash flows, business remodels and marketing to purchase inventory or new equipment, to fund general working capital, and much more. The loan is not available for personal reasons.
About Larger Arakura Business Loans
What is the Larger Arakura Business Loan?
The Larger Business Loan is a larger loan size to support business growth opportunities. Loans range from $100,000 to $500,000 over a fixed term for up to 36 months. Repayments are scheduled weekly or fortnightly to work with the flow of cash.
How’s 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.
Do I qualify 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 generate an annual revenue of $700,000. It is necessary to be a New Zealand Citizen (or Permanent Resident) over 18 years as well as own a New Zealand company (with a valid NZBN/IRD) and be able to demonstrate at the least 12 months of operating.
What can I use the funding for?
A Business Loan of a larger size can be used for almost all company purpose including company improvements, purchasing inventory or new equipment or as general working capital and much more. The loan is not available for personal purposes.
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 registration on the PPSR or the registration of as a caveat.
A director’s or personal guarantee is a commitment to pay off a credit line that is general in nature rather than specifying the security for a particular asset. The person who is signing the guarantee is personally liable in the event that the company creditor is unable to repay the debt.
The Personal Property Securities Register (PPSR) is an online central register that is 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 permits priority over personal property to be granted according to the date a security interest that is registered.
Caveats are legal form of document to offer the public notice of a legal claim to property.
What is a pre-approval without Credit Check?
If you’re applying for an enterprise loan of $250K or more we can offer an initial pre-approval to smooth out the process. We may be able to make this decision without a credit check and within 6 hours of your initial application. The pre-approval process is based on an initial evaluation that involves you answering a few financial health checks. It is neither an offer nor a guarantee of financing. The approval of a conditional loan is subject to an extensive credit evaluation and any offer that you might receive could have different terms.
Do I qualify for funds?
You may be eligible for a company loan if you;
- are a New Zealand Citizen (or Permanent Resident)
- are at least 18 years old, own a New Zealand company (with a valid NZBN/IRD)
- can demonstrate at least 6 months of business (for the unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K or $500K)
How do I apply?
The application process is simple and simple. Simply complete the online form in few minutes and an experienced company credit specialist will contact you to guide you.
For a loan of up to $100,000 you’ll require proof of identity (valid Driver’s Licence) along with an NZBN/IRD that is valid and at least six months worth of bank statements.
Otherwise, for larger loan sizes, you’ll also need:
$100K to $250K: Details of application, including credit approval, 6-12 months of bank statements, IRD statement (if credit is over $150K).
$250K to $500K: Details of the application, including credit consent twelve months of bank records, IRD statement Last 2 years’ finalised financial statements, as well as interim current financial year financials as well as Aged Payables and Receivables reports.
What speed will I be able to get a decision?
For an unsecured loan ($5K up to $100,000) we usually offer an answer within one hour, provided you apply in standard business times and allow us to use the advanced bank verification system link to instantly verify your bank’s information online. If you opt to upload copies of your bank statements we can offer an answer within 1 business day.
For the Larger Business Loan ($100K up to $500,000) we might be likely to provide the conditional pre-approval within about 6 hours. After you’ve signed the pre-approval form, it will take between 2 and 3 days for the final approval, however this could be shorter based on the particular circumstances of each application. Some offers have been approved in 24 hours.
The most efficient method can be make sure you apply during standard company hours and let us use the advanced bank verification system link to instantly verify your bank information online. If you decide to upload documents from your account statement, it can take a bit longer.
How fast will I get the money?
For the Small Business Loan ($5K or more) we can often provide an answer in just one hour, provided you make your application at normal business times and permit us to use the advanced bank verification system to instantly verify your bank details online. If you want to submit copies of your bank statements, we’ll be able to provide a decision in just 1 business day.
If you are applying for Larger Business Loans ($100K or more) we might be capable of provide you with pre-approval conditional to your application within six hours. After you’ve signed the pre-approval document, you will need to wait around 2-3 days for final approval, however this could be shorter based on the specifics of each application. Some deals have been approved in the space of 24 hours.
The fastest way can be ensure you apply during standard business hours and allow us to use our sophisticated bank verification link to instantly check your bank’s information online. If you decide to upload documents from your account accounts, it will take a little longer.
What is the maximum amount I can borrow?
We provide loans that range from $5,000 and $500,000. If you apply for a specific amount we look at a variety of elements for determining what is the health of your company and the extent of repayments your business will be able to support. The total amount of your loan will be contingent on the specifics for your business.
When you submit an application for a set amount, we look at a range of elements to assess how much we can lend you such as health of your business and the amount of repayments your company can support. The amount you receive from your loan will be determined by the particular circumstances of your business.
Fees & repayments
How much do you charge for the cost of a company loan?
When you apply for the company credit, we will assess the risk assessment for your business and offer an individualised proposal that includes the loan amount, the terms and interest rates. The business loan is a loan that is priced upfront which means you know the exact amount due, which includes any charges, interest rates or fees.
What is the factor that determines the price I will be charged?
Interest rates for company loans rates depend on several factors including the amount borrowed, the business assets the money will be used for in addition to the industry that the business is in, how long the business has been operating, what percentage of the company has enough cash flow to support the loan, and also the general well-being as well as creditworthiness business.
What are the fees?
There aren’t any hidden costs with our business loans. You’ll know exactly how much it is that you need to pay and when, starting from day one. There’s not any compounding interest and no extra fees (as as long as you pay your payments on time).
We don’t charge an Application Fee. You are able to request a credit loan with no cost upfront or commitment to apply.
The Origination Fee covers the costs associated with the setting up and management of the loan. This is only a fee if you decide to take the loan. Our Origination Fee is 2.5% of the amount of the loan.
Can I pay off the loan in advance?
You may choose to pay back the total amount of your loan in full at any time.
If you choose to pursue this option, please speak to our friendly company lending experts. They will provide you with repayment details and an early payment figure. It will be calculated using the total of the principal amount remaining and the accrued interest up to the time of the early payout plus 1.5 percent of the remaining principal and any fees that remain unpaid.
How do repayments work?
To make sure you do not miss due dates and also to be in line with your cash flow standard, we offer repayments that are either daily or weekly. They are automatically deducted from your nominated company account.
Security & privacy
Will my data be protected?
Protecting your information, and being upfront about how we collect the information we collect, use, share and ensure the security of your information is crucial and a vital element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We make use of industry-standard 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 utilise a sophisticated bank verification system that allows you to instantly verify your bank account information online, allowing us to provide quick responses.
About business loans
What is asset-based borrowing (a secured loan)?
Asset-based borrowing occurs when a business owner utilises assets they own to make the loan. The asset can be an individual asset, such as the family home or a company asset such as a truck or piece or equipment.
The vast majority of lenders, including the largest banks, are inclined to secure loans against an asset. If you have trouble paying back the loan, then the asset could be offered for sale by the lender. In essence, it is an opportunity to secure new funding making use of the value of what you already have.
Should I require security for a business loan?
For loans that exceed $150,000, it is not necessary to secure assets upfront to access the money however, we do require a personal guarantee. As long as you follow your loan obligations (as detailed in your loan contract) and you are able to meet your obligations, asset security is not needed. If you take out loans in excess of $150K generally, you can get an individual ensure and security in the form the charge of assets.