FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Details of The Papakowhai Small Business Loans
Let me know what you think of the Papakowhai Small Business Loans
Papakowhai unsecured loans provides amounts of between $5,000 and $100,000. The terms range between 3 and 24 months, cash flow-friendly repayments, which are either daily or weekly.
How is the Unsecured Loan different from the traditional business loan?
You can apply to get your Small Business Loan in under 10 minutes on the internet or over the phone. You’ll get an immediate response, and the funds could be on your account within 24 hours. Traditional company loans are based on an annual rate of interest along with other charges and fees. This company loan is an upfront priced loan and you’ll be aware in advance of the total amount due, which includes any fees, interest or charges. This is then broken down into weekly or daily repayment figure.
What can the Small Business Loan be used for?
A Small Business Loan can be used for almost every company purpose including the management of cash flow, business remodeling, marketing for purchasing inventory or new equipment, for general working capital, and much more. The loan cannot be used to fund personal expenses.
Concerning Larger Papakowhai Business Loans
What is the Larger Papakowhai 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 either weekly or fortnightly to work with you cashflow.
How’s the Origination Fee calculated?
This Larger Business Loan has an Origination Fee which is calculated at 2.5 percent of the loan amount.
Can I get the Larger Business Loan?
To be eligible for a credit of this size the business needs to have been trading for at least 3 years with an annual turnover of $700K. It is necessary to be a New Zealand Citizen (or Permanent Resident) over 18 years or have a New Zealand business (with a valid NZBN/IRD) and be able to demonstrate at least 12 months of trading.
What can I use the funds for?
A large business loan can be used to fund almost every company use, including business renovations, to purchase inventory or new equipment for general working capital, and much more. The loan is not available for personal reasons.
Is the Larger Business Loan a secured loan?
Asset security is necessary to access funding over $150,000. This is in the form of a charge over assets, which could also include registering this with the PPSR or the registration of a caveat.
A personal or director’s ensure is a commitment to repay credit that is general in nature rather than stating the security for a particular asset. The person who is signing the guarantee is personally responsible if the company borrower is unable to re-pay the debt.
The Personal Property Securities Register (PPSR) is an online central register operated by the New Zealand Government. It contains security interests that are registered for personal property (including the assets or goods). The PPSR gives prioritisation over property that is personal to be granted in accordance with the date on which a registration of a security interest.
A caveat is a legal document that is filed to offer notice of a legal claim on a property.
What is a pre-approval that does not require Credit Check?
If you’re requesting an enterprise loan that is greater than $250K it’s possible to offer an initial pre-approval to smooth out the process. It is possible to do this without a credit check and within six hours of your initial application. This pre-approval is based on an initial assessment that includes the answer to a series of financial well-being checks. This is not an offer of credit or guarantee of funds. Unconditional approval is subject to a full credit assessment and any offer that you are offered could be on different terms.
Do I qualify for funds?
You may apply for an business 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)
- must show at least six months’ worth of transactions (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 application process is simple and easy. Simply complete the online form in few minutes and an experienced company expert in lending will call you to help you.
To apply for up $100,000, you’ll require ID details (valid Driver’s Licence), a valid NZBN/IRD as well as at least 6 months of bank statements.
If you’re looking for loans with larger sizes, you’ll also require:
$100K to $250K: Information about the application including credit consent, 6 – 12 months of bank statements, IRD statement (if you have a loan of more than $150K).
$250K-$500K: Details for application including credit consent as well as 12 months bank statement, an IRD statement Last 2 years’ finalised financial statements, in addition to interim financials from the current financial year such as age-related payables and aged Receivables summaries.
How fast will I get a decision?
For an unsecured loan ($5K or more) we usually provide a response in one hour if you make your application during standard business hours and allow us to utilise the advanced bank verification system link to immediately verify your bank account information online. If you want to upload copies of your bank statements , we are able to offer a decision within an business day.
For Larger Business Loans ($100K up to $500,000) we might be in a position to offer you with a conditional pre-approval within 6 hours. After you’ve signed the pre-approval form, it will take about 2-3 days for final approval. However, it could be faster based on the specifics of each application. Some offers have been approved within less than 24 hours.
The most efficient method can be ensure you apply during normal company hours. You can also allow us to use our advanced bank verification system to instantly check your bank’s information online. If you opt to send us the copies of bank statements it will take a little longer.
How soon will I receive the money?
For the Small Business Loan ($5K and up) We can usually offer an answer within an hour, provided you apply at standard business time and let us use the advanced bank verification system link to immediately verify your bank account information online. If you opt to submit copies of your bank statement, we’ll offer the decision within one business day.
For the Larger Business Loans ($100K up to $500,000) we may be capable of provide the conditional pre-approval within six hours. Once you have signed the pre-approval, turnaround times are around 2-3 days for final approval. However, this can be faster depending on the specifics of each application. Certain deals have been approved in the space of 24 hours.
The fastest way is to make sure you apply during normal business hours. You can also let us use the sophisticated bank verification link to instantly verify your bank account information online. If you send us the copies of bank statements it will take a little longer.
How much can I borrow?
We offer loans that range from $5,000 to $500,000. When you submit an application for a specific amount we will consider a number of elements to determine how much we can lend you health of your company and the level of repayments that your business is able to afford. The total amount of your loan will be contingent on the particular circumstances the company.
When you apply for a specific amount we take into consideration a variety of factors to determine the health of your business and the amount of the repayments your company is able to afford. The total amount of your loan will depend on the particulars the company.
Fees & repayments
How much should you charge for the cost of a business loan?
If you decide to apply for one of our company loans, we’ll assess the risk profile for your company and offer an individualised proposal that includes loan amount, term and interest rates. The company loan is an upfront priced loan which means you know the exact amount due, which includes any costs, fees, or interest rates.
What determines the rate that I am charged?
Business loan interest rates depend on several factors like the amount of money of money borrowed, the business assets the funds are used to purchase and the sector the company is in, how long the business has been operating, whether the company has enough cash flow to cover the loan, and overall health or creditworthiness of the business.
What are the fees?
There are no hidden costs for our company loans, and you’ll know precisely what you need to pay, and when, starting from the day you sign up. There’s no compounding interest, and the loan comes with no additional fees (as long as you make your payments in time).
We don’t charge an Application Fee. You can make an application for loans without any upfront costs or commitment to apply.
The Origination Fee includes the expenses associated with establishing and managing the loan. This is only a fee if you choose to proceed with the loan. Our Origination Fee is 2.5 percent of the amount of the loan.
Can I pay off the loan in advance?
You can choose to repay all of your loan early at any time.
If you are deciding to take this route, please call our helpful company loan professionals. The experts will provide you with details for repayment and an early payout figure. This is calculated as the sum of the principal remaining and the accrued interest up to the time of early payment plus 1.5% of the remaining principal plus any outstanding fees.
How do you make repayments work?
To help you avoid missing repayments and to fit in with your cash flow cycle we offer repayments either daily or weekly. These are automatically deducted from your business account.
Security & privacy
Will my information be protected?
The security of your personal information, as well as being transparent about how we collect data, process, exchange and ensure the security of your information is of huge importance and is a crucial element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We use industry recognised encryption standards to secure your personal, sensitive financial and other data. Our funders are ISO 27001 qualified for our commitment to the security of our clients as well as their privacy. We use an advanced banking verification system to immediately confirm your bank account information online, allowing us to offer quick responses.
About business loans
How do you define asset-based lending (a secured loan)?
Asset-based borrowing is when an company owner uses the assets they have to make the loan. The asset could be an individual property, such as the family home, or a business asset like a truck or piece or equipment.
The majority of banks, even the largest banks, are inclined to secure loans against an asset. If you’re having trouble paying back the loan, your assets could be transferred to the lender. In essence, it is means of securing new financing using the value of what you already have.
What do I require security to secure an 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 require a personal guarantee. need a personal guarantee. In the event that you fulfill your loan commitments (as specified in the loan contract), asset security is not needed. For loans over $150,000 typically, you will need the option of a personal guarantee and security in the form an asset charge.