FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Hongoeka Small Business Loans
Let me know how you are able to avail the Hongoeka Small Business Loans
Hongoeka unsecured loans provides amounts between $5,000 and $100,000. Terms range from 3 and 24 month and cash flow-friendly repayments that are either per day or weekly.
What makes how is the Unsecured Loan different from a traditional business loan?
Apply for your Small Business Loan in under 10 minutes over the phone, receive an instant response and funds may be in your account within 24 hours. Traditional business loans have an annual rate of interest together with additional fees and charges. Our business loan is an upfront priced loan which means you be aware in advance of the amount you will have to pay, including the interest, fees and charges. Then, it is broken down into a daily or weekly payment amount.
What can the Small Business Loan be used for?
It is a Small Business Loan can be used for virtually every company use, including cash flow management, company improvements, advertising, to purchase inventory or new equipment, or as general working capital, and much more. The loan is not available to fund personal expenses.
About the Larger Hongoeka Business Loans
What is the Larger Hongoeka Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund business growth opportunities. The loan ranges from $100,000 to $500,000 for a fixed period of that can last up to 36 months. Repayments are weekly or fortnightly, depending on your situation.
How is the Origination Fee calculated?
This Larger Business Loan has an Origination Fee that is determined at 2.5% of the amount of the loan.
Can I get the Larger Business Loan?
To qualify for a loan of this size the business needs to be operating for at least three years and generate an annual revenue of $700,000. The applicant must also be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old or have a New Zealand business (with a valid NZBN/IRD) and be able to prove at the least 12 months of operating.
How can the funding be utilised?
A large business loan can be used for nearly all business reason, such as company remodeling, buying new equipment or inventory as well as for general working capital, and much more. The loan cannot be used to fund personal expenses.
Is the Larger Business Loan a secured loan?
Asset security is needed to obtain funding above $150,000. This is by taking a charge on assets, and could include the registration of this with the PPSR or filing as a caveat.
A personal or director’s ensure is a commitment to pay off a credit line that is generally based rather than defining the security of a specific asset. The person signing the guarantee is personally liable if 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 records security interests that have been which are registered with respect to personal property (including objects or assets). The PPSR gives preference over private property assigned according to the date a security interest has been registered.
An affidavit is an official document filed to provide the legal claim on a property.
What is a pre-approval that does not require Credit Check?
If you’re requesting the Larger Business Loan of more than $250,000 we can offer an initial pre-approval that will help make the process. We may be able to make this decision without credit checks and within 6 hours of your initial application. This pre-approval is made based on a preliminary assessment which includes answering a couple of financial well-being checks. This is in no way an offer, nor is it a guarantee of finance. A conditional approval is subject an assessment of your creditworthiness and any offer you are offered could have different conditions.
The application process
Can I be eligible for funding?
You can apply for an business loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are 18 years or older, own a New Zealand company (with a valid NZBN/IRD)
- must show at least six months of trading (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 easy. Simply complete the online form in just a few minutes, and an experienced company loan specialist will be in touch to assist you.
For a loan of up to $100,000, you’ll need proof of identity (valid Driver’s Licence) as well as an active NZBN/IRD, and at least 6 months’ worth of bank statements.
For larger loan sizes, you’ll also need:
$100K – $250K: Application requirements, including credit consent, 6 – 12 months of IRD statements, bank statements (if you have a loan of more than $150K).
$250K – $500K: Application details including credit consent and 12 months of bank records, IRD statements, last 2 years finalised financial statements, in addition to interim current financial year financials, Aged Payables and Aged Receivables reports.
What speed will I be able to get a decision?
For an unsecured loan ($5K and up) We can usually provide an answer within one hour if you submit your request in quality business time and allow us to make use of the advanced bank verification system to instantly verify your bank information online. If you choose to submit copies of your bank statement, we’ll offer a decision in as little as one business day.
For the Larger Business Loan ($100K or more) we may be in a position to provide you with conditional pre-approval in about 6 hours. After you’ve signed your pre-approval document, you will need to wait between 2 and 3 days for the final approval. However, this could be shorter based on the specifics of each application. Some offers have been approved within less than 24 hours.
The quickest method is to ensure you apply during normal company hours, and allow us to use our advanced bank verification system link to instantly confirm your bank details online. If you opt to send us duplicates of your banking statement, it takes a bit longer.
How quickly will I receive the funds?
For the Small Business Loan ($5K to $100K) We can usually offer an answer within an hour if you apply at normal business hours and you allow us to use the bank verification system link to instantly verify your bank details online. If you decide to upload copies of your bank statements, we are able to provide a decision in just one business day.
If you are applying for Larger Business Loans ($100K or more) We may be capable of provide you with a conditional pre-approval within six hours. Once you’ve signed the pre-approval, turnaround times are between 2 and 3 days for the final approval, however it could be faster based upon the circumstances for each application. Certain transactions have received approval in just 24 hours.
The fastest way for you to apply is make sure you apply during standard business hours and let us use the sophisticated bank verification to instantly check your bank’s information online. If you choose to send us copies of your bank statements it can take a bit longer.
How much can I borrow?
We offer loans ranging from $5,000 to $500,000. When you make an application for a specific amount we take into consideration a range of elements to determine how much we can lend you well-being that is your business and the level of repayments your company is able to afford. The total amount of your loan will depend on the specifics for your company.
When you make an application for a specific amount we look at a range of variables to determine the well-being that is your company and the amount of repayments that your business will be able to support. The total amount of your loan will depend on the particulars for your business.
Fees & repayments
How much should you charge for the cost of a company loan?
When you make an application for our business loans, we’ll assess the risk profile that you have for your company and offer you with a customised offer including loan amount, term and the interest rates. The business loan is an upfront cost loan therefore you will know the exact amount you will have to pay, including costs, fees, or interest rates.
What determines the rate that I am charged?
Interest rates for business loans rates differ based on various factors including the amount borrowed, the business assets the funds are used to purchase in addition to the industry that the company operates in, the long the business has been in operation as well as whether the company has enough cash flow to pay for the loan, and also the general well-being or financial standing of the business.
What are the charges?
There aren’t any hidden charges with our business loans, and you’ll know precisely how much it is that you be required to pay, and when, from the first day. There’s not any compounding interest and there are no additional charges (as as long as you pay your payments on time).
We do not charge an application fee. You are able to request a credit loan with absolutely no upfront cost and no commitment to apply.
The Origination Fee includes the expenses associated with setting up and managing the loan. The only way to pay this fee if you decide to take the loan. Our Origination Fee is 2.5% of the loan amount.
Can I pay out the loan earlier?
You can repay the entire amount of the advance loan at any time.
If you choose to pursue this option, please talk to one of our helpful company lending professionals. They will provide you with details on repayment and an early payout figure. This is calculated as the total of the principal balance plus any accrued interest as of the time of the early payout in addition to 1.5% of the principal amount remaining and any outstanding fees.
How do you make repayments work?
To make sure that you don’t miss payment dates and to align your cash flow schedule, we offer repayments either weekly or daily. These are automatically deducted from the nominated business account.
Security & privacy
Will my information be protected?
Security of your data, and being clear about how we collect information, use it, and exchange it, as well as secure your information, is crucial and is a crucial element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption protocols to safeguard your personal, sensitive financial information and our funders are ISO 27001 qualified for our dedication to protecting the security of customers and security. We use an advanced banking verification system to instantly verify your bank account information online to offer rapid response.
About business loans
How do you define asset-based lending (a secured loan)?
Asset-based borrowing is when the company owner uses an asset that they own to make the loan. The asset may be an individual property, such as the family home or it could be a business asset like a truck or piece or equipment.
The majority of banks, including the big banks, tend to make loans secured by an asset. If you’re struggling to pay back the loan, the asset could be offered for sale by the lender. In essence it’s means of securing new financing by taking advantage of the value of what you already own.
What do I require security for a company loan?
For loans of up to $150,000, no asset security is required in advance to gain access to the funds but we require a personal guarantee. require a personal guarantee. If you adhere to your loan commitments (as stipulated in your loan contract document) and you are able to meet your obligations, asset security is not needed. For loans over $150,000 typically, you will need personal ensure and security in the form charges on assets.