FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Details of The Favona Small Business Loans
Let me know about the Favona Small Business Loans
Favona unsecured loans provides the range of $5,000 to $100,000. The terms range between 3 and 24 months. They also offer cash flow friendly repayments, which are either daily or weekly.
What is what makes the Unsecured Loan different from the traditional company loan?
It is imaginable to apply for the Small Business Loan in under 10 minutes on the internet or over the phone. You’ll get an answer within the same day and the money could be in your account in 24 hours. Traditional business loans reference an interest rate per annum along with other charges and fees. Our company loan is a cash-based loan so you will be aware of the total amount to be paid, including any fees, interest or charges. This is then divided into weekly or daily payment amount.
What could you use the Small Business Loan be used for?
The Small Business Loan can be used for almost any company purpose including managing cash flows, company improvements, advertising, to purchase inventory or new equipment, for general working capital, and much more. The loan cannot be used to fund personal expenses.
Concerning Larger Favona Business Loans
What is the Larger Favona Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund company growth opportunities. The loan ranges from $100,000 to $500,000 with a fixed-term up to 36 months. Repayments are weekly or fortnightly to work with the flow of cash.
How’s the Origination Fee calculated?
The Larger Business Loan has an Origination Fee, calculated at 2.5 percentage of the amount of the loan.
Do I qualify for the Larger Business Loan?
To be eligible for a loan that is this large, your company needs to have been operating for a minimum of 3 years with an annual turnover of $700K. Your business must belong to a New Zealand Citizen (or Permanent Resident) over 18 years and have a New Zealand business (with a valid NZBN/IRD) and be able to demonstrate at minimum 12 months of business.
How can the funds be utilised?
A Larger Business Loan can be used for nearly all business purpose including business remodeling, buying inventory or new equipment for general working capital and so 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. It is usually by way of charge against assets and can include registration through the PPSR or the registration of as a caveat.
A director’s or personal ensure is a guarantee to pay back a loan that is generally in nature rather than specifying the security of a specific asset. The person signing the guarantee is personally liable in the event that the business borrower is unable to re-pay the debt.
The Personal Property Securities Register (PPSR) is an online central register that is operated by the New Zealand Government. It records security interests that have been that are registered for personal property (including the assets or goods). The PPSR permits the priority of personal property assigned according to the date the security interest was registered.
The caveat can be described as a formal document filed to offer the legal claim on a property.
What exactly is a preapproval without Credit Check?
If you’re applying for larger company loans that exceeds $250K we may be able to provide an initial pre-approval that will help ease the process. It is possible to do this without credit checks and within six hours of your initial application. The pre-approval process is based on an initial evaluation that involves the answer to a series of financial well-being questions. It’s neither an offer nor a guarantee of credit. Unconditional approval is subject to a full credit assessment and any offer you might receive could have different terms.
The application process
Do I qualify for funds?
You can apply for an company loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are at least 18 years old, have a New Zealand company (with a valid NZBN/IRD)
- you must demonstrate at minimum 6 months of trading (for for the unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K up to $500K)
How do I apply?
The application process is simple and simple. Just complete the online application in just a few minutes, and an experienced company expert in lending will be in touch to help you.
To apply for up $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.
For larger loan sizes, you’ll need:
$100K to $250K: Information about the application including credit consent, 6-12 months of IRD statements, bank statements (if loan above $150K).
$250K to $500K: Application details including credit consent twelve months of bank statements, IRD statement and the last two years’ finalised financial statements, in addition to interim financial statements for the current year such as age-related payables and aged Receivables Summary.
How soon will I hear a decision?
For an unsecured loan ($5K and up) We can usually offer an answer within an hour – as long as you submit your request in standard company timings and let us use 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 are able to offer a decision within one company day.
For the Larger Business Loan ($100K or more) we may be likely to provide you with a conditional pre-approval within about 6 hours. Once you’ve signed the pre-approval, turnaround times are about 2-3 days for final approval. However, this could be shorter based on the specifics of each application. Certain offers have been approved in just 24 hours.
The most effective method can be make sure you apply during normal business hours and allow us to use the advance bank verification to instantly verify your bank account information online. If you opt to upload documents from your account accounts, it may take a bit longer.
How fast will I get the money?
For the Small Business Loan ($5K or more) We can usually offer an answer within one hour, provided you make your application in normal business timings and let us use the bank verification system to immediately verify your bank account information online. If you want to upload copies of your bank statements, we will be able to offer the decision in just the span of one business day.
For the Larger Business Loans ($100K and up) we may be capable of provide you with conditional pre-approval within about six hours. Once you’ve 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. Some transactions have received approval within just 24 hours.
The quickest method would be to ensure you apply during standard business hours. You can also permit us to use the sophisticated bank verification link to instantly check your bank’s information online. If you upload the copies of bank statements, it can take a bit longer.
How much can I borrow?
We offer the loan amount between $5,000 to $500,000. If you apply for a certain amount, we take into consideration a range of variables for determining the well-being of the business and the extent of the repayments your business will be able to support. The amount you receive from your loan will depend on the particular circumstances of your business.
When you apply for a certain amount, we consider a variety of variables to determine how much we can lend you such as well-being that is your company and the level of repayments that your business will be able to support. The total amount of the loan will be determined by the specifics for your business.
Fees & repayments
How much should you charge for the cost of a company loan?
If you decide to request business loans with us company financing, we’ll assess the risk assessment the business and offer an individualised offer including loan amount, term and interest rates. It is a business loan is an upfront-priced loan and you’ll know the exact amount to be paid, including any charges or interest.
What determines the rate that I will be charged?
The interest rates on business loans rates differ based on various factors such as the amount that is borrowed, what business assets the money will be used for, the industry the company operates in, the long the company has been running, how long the company has enough cash flow to cover the loan, and also the general health or financial standing of the company.
What are the cost?
There aren’t any hidden costs with our business loans. You’ll know exactly how much it is that you be required to pay, and at what time, from the first day. There’s no compounding and the loan comes with no additional fees (as as long as you pay your payments on time).
We do not charge an application fee. You can make an application for loans with absolutely no upfront cost and no the obligation to take action.
The Origination Fee is the cost associated with setting up and managing the loan. The only way to pay this cost if you take out the loan. The Origination Fee for us is 2.5 percentage of the amount of the loan.
Can I pay out the loan earlier?
You can choose to repay all of your advance loan at any time.
If you choose to do this please speak to our friendly company credit professionals. We will provide you with the details of your repayment along with an early payout estimate. The figure will be calculated as the total of the principal remaining and any accrued interest at the time of the early payout and 1.5 percent of the principal remaining and any fees that remain unpaid.
What are the repayment methods?
In order to help you avoid missing payment dates and to align with your cash flow cycle we offer repayments either weekly or daily. These are automatically withdrawn from the nominated business account.
Security & privacy
Will my data be protected?
Protecting your information, and making it clear the ways we gather data, process, exchange and ensure the security of your information is crucial and is an essential aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We make use of industry-standard encryption techniques to protect your personal, sensitive and financial data and our funders are ISO 27001 qualified for our dedication to protecting the security of customers and privacy. We use an advanced bank verification system to immediately verify your bank account information online, allowing us to offer rapid response.
About business loans
What is asset-based borrowing (a secured loan)?
The term “asset-based” refers to borrowing where an company owner uses assets they own to make the funding. The asset can be either a personal asset like the family home or a business asset like a truck or piece of equipment.
The majority of banks, even the major banks, prefer to guarantee loans against assets. If you’re struggling to pay back the loan, your assets could be sold by the lender. In essence, it’s an opportunity to secure new financing by taking advantage of the value of what you already have.
What do I require security for a business loan?
For loans up to $150K the requirement for asset security is not required in advance to gain access to the funds however, we do need the personal guarantee. If you adhere to the loan terms (as detailed in your loan contract document), asset security is not required. For loans over $150,000 generally, you are able to get personal ensure and security in the form of charges on assets.