FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Ararimu Small Business Loans
Tell me how you can avail the Ararimu Small Business Loans
Ararimu unsecured loans offers amounts between $5,000 and $100,000, with terms ranging from 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?
You can apply for the Small Business Loan in under 10 minutes via the internet or over the phone, receive a same day response and have the funds in your account in 24 hours. Traditional company loans are based on an interest rate per annum as well as other fees and charges. This business loan is a pre-paid loan which means you know in advance the total amount payable including any fees, interest or charges. Then, it is divided into a daily or weekly repayment figure.
What can you use the Small Business Loan be used for?
It is a Small Business Loan can be used to fulfill almost every company use, including managing cash flows, business renovations, marketing, to purchase inventory or new equipment, to fund general working capital, and much more. The loan cannot be used for personal purposes.
About the Larger Ararimu Business Loans
What is the Larger Ararimu Business Loan?
The Larger Business Loan is a larger size loan to aid in business growth opportunities. Loans range between $100,000 and $500,000 with a fixed-term that can last up to 36 months. The repayments are made weekly or fortnightly, depending on your cash flow.
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% of the amount of the loan.
Am I eligible for the Larger Business Loan?
In order to be eligible for a loan that is this large, your business needs to be operating for at least three years and have an annual turnover of at least $700,000. You must be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old, own a New Zealand company (with a valid NZBN/IRD) and be able to prove at minimum 12 months of business.
How can the funding be utilised?
A larger business loan is a great option for almost any business need, including company remodeling, buying inventory or new equipment, as 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 for accessing funds over $150,000. It’s in the form of a charge over assets, which could also include registration with the PPSR or registering a caveat.
A personal or director’s ensure is a commitment to repay a loan which is generally based rather than stating the security for a particular asset. The person signing the guarantee is personally responsible if the business the borrower fails to pay back the debt.
The Personal Property Securities Register (PPSR) is a central, national online registry run by the New Zealand Government. It reflects security interests registered in respect of personal property (including goods or assets). The PPSR gives priority over personal property to be assigned in accordance with the date on which a registration of a security interest.
A caveat is a legal document filed to offer an official notice of a claim on a property.
What is a pre-approval without Credit Check?
If you’re requesting the Larger Business Loan that exceeds $250K, we may offer a preliminary pre-approval to help simplify the process. It is possible to make this decision without credit checks and within 6 hours of your initial application. The pre-approval process is based on an initial evaluation that involves answering a couple of financial well-being checks. It is not an offer or guarantee of credit. Acceptance without condition is subject to an assessment of your creditworthiness and any offer you are offered could have different conditions.
Are I eligible for funding?
You can apply for an company 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 worth of trade (for a unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K up to $500K)
How do I apply?
The process for applying is fast and simple. Complete the online form within a couple minutes, and an experienced company lending specialist will call you to assist you.
To apply for up $100,000, you’ll need identification details (valid Driver’s Licence) and an active NZBN/IRD, and at least 6 months’ worth of bank statements.
If you’re looking for loans with larger sizes, you’ll need:
$100K to $250K: Application details including credit consent, 6 – 12 months of IRD statements, bank statements (if loan above $150K).
$250K – $500K: Information on the application including credit consent, 12 month bank accounts, the IRD statement Last 2 years’ finalised financial statements, plus interim current financial year financials as well as Aged Payables and Receivables summaries.
How fast will I get a decision?
For an unsecured loan ($5K up to $100,000) we typically provide an answer in just one hour if you apply in quality company time and allow us to utilise the advanced bank verification system to instantly verify your bank’s information online. If you choose to submit copies of your bank statement, we’ll provide an answer in just an company day.
If you are applying for a Larger Business Loan ($100K and up) we may be likely to offer you with pre-approval conditional to your application within 6 hours. After you’ve signed your pre-approval, turnaround times are 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 quickest method is to ensure you apply during standard business hours, and allow us to use our advanced bank verification system to instantly verify your bank information online. If you decide to upload documents from your account accounts, it can take a bit longer.
How soon will I receive the cash?
For the Small Business Loan ($5K to $100K) We can usually offer a response in one hour – as long as you apply in normal business times and permit us to use the advanced bank verification system link to instantly verify your bank’s information online. If you decide to submit copies of your bank statement, we’ll offer an answer in just one business day.
For Larger Business Loans ($100K or more) we might be capable of provide you with pre-approval conditional to your application within about six hours. Once you have signed the pre-approval document, you will require to wait about 2-3 days for final approval, however this could be shorter based on the circumstances of each application. Certain deals have been approved in less than 24 hours.
The most efficient method can be ensure you apply during normal business hours, and allow us to use our sophisticated bank verification to confirm your bank details online. If you upload duplicates of your banking statement, it may take a bit longer.
What’s the minimum amount I can borrow?
We provide loan amounts between $5,000 and $500,000. When you make an application for a specific amount we consider a variety of factors for determining how much we can lend you well-being that is your company and the extent of payments your business is able to afford. The total amount of the loan will be determined by the particular circumstances the business.
When you apply for a set amount, we look at a range of aspects to assess how much we can lend you such as health of the business and the amount of repayments that your business can afford. The amount you receive from your loan will depend on the particulars the company.
Fees & repayments
How much should you charge for an business loan?
When you request one of our company loans, we’ll assess the risk assessment that you have for your business and offer you with a customised offer that includes the amount of the loan, the duration and the interest rates. The company loan is an upfront-priced loan so you will know the exact amount payable including any charges or interest.
What is the factor that determines the price I am charged?
Interest rates for business loans rates differ based on various variables like the amount to be borrowed, what business assets the funds will be used for, the industry the business is in, how long the business has been running for, whether the company has enough cash flow to support the loan, and general well-being or financial standing of the company.
What are the fees?
There aren’t any hidden charges for our company loans. You’ll know precisely how much it is that you be required to pay and at what time, from the 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 apply for a loan with with no upfront cost or commitment to apply.
The Origination Fee is the cost associated with setting up and managing the loan. You are only charged this cost if you take out the loan. The Origination Fee for us is 2.5 percent of the loan amount.
Can I pay off the loan in advance?
You can decide to repay the entire amount of your loan in full at any time.
If you are deciding to pursue this option, please call our helpful business credit specialists. We will offer you with repayment details and an early payout figure. This will be calculated as the total of the principal balance and accrued interest to the time of early payout, plus 1.5 percent of the principal balance and any fees that remain unpaid.
What are the repayment methods?
To make sure that you don’t miss payments and to work with your cash flow general, we offer repayments either daily or weekly. These are automatically withdrawn from your company account.
Security & privacy
Will my information be secure?
Making sure that your information is secure, and knowing how we collect data, process, exchange and secure your information, is of huge importance and an integral part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We make use of industry-standard encryption standards to protect your personal, sensitive and financial data and our funders are ISO 27001 certified for our dedication to security for our clients and privacy. We make use of an advanced bank verification system to immediately verify your bank account details online. This allows us to offer quick responses.
About business loans
How do you define asset-based lending (a secured loan)?
Asset-based borrowing is when the company owner borrows from assets they own to get the loan. The asset can be either an individual asset, such as the family home, or an company asset such as a vehicle or piece or equipment.
The vast majority of lenders, not just the largest banks, are inclined to make loans secured by an asset. If you are having difficulty paying back the loan, your assets could be offered for sale by the lender. In essence it’s means of securing additional financing using the value of what you already have.
Do I require security to get an company loan?
For loans of up to $150,000, it is not necessary to secure assets in advance to gain access to the funds However, we do need an individual guarantee. If you adhere to your loan commitments (as specified in your loan contract document), asset security is not required. For loans over $150K generally, there is an individual ensure and security that is in the form a charge over assets.