FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Paremata Small Business Loans
Let me know more about Paremata Small Business Loans
Paremata unsecured loans offers amounts between $5,000 and $100,000, with terms ranging from 3 and 24 months, cash flow-friendly repayments which can be made daily or weekly.
How is what makes the Unsecured Loan different from an traditional company loan?
Apply to get your Small Business Loan in under 10 minutes by phone. You will receive a same day response and the money could be in your account within 24 hours. Traditional company loans refer to an annual rate of interest together with additional fees and charges. Our business loan is a pre-paid loan so you will be aware of the total amount payable including any fees, charges or charges. Then, it is broken down into either a daily or weekly repayment figure.
What can the Small Business Loan be used for?
The Small Business Loan can be used for almost any company need, such as control of cash flow company remodels and marketing to purchase inventory or new equipment, or as general working capital and so much more. The loan cannot be used for personal reasons.
About the Larger Paremata Business Loans
What is the Larger Paremata Business Loan?
The Larger Business Loan is a larger loan size to support business expansion opportunities. The loan ranges from $100,000 to $500,000 with a term fixed with a maximum of 36 months. Repayments are either weekly or fortnightly depending on the flow of cash.
How’s the Origination Fee calculated?
The Larger Business Loan has an Origination Fee, calculated at 2.5 percent of the amount of the loan.
Am I eligible for the Larger Business Loan?
To be eligible for a loan of this size the company needs to have been in operation for at least 3 years and have an annual turnover of at least $700K. The applicant must also be a New Zealand Citizen (or Permanent Resident) over 18 years, own a New Zealand business (with a valid NZBN/IRD) and be able to demonstrate at minimum 12 months of continuous trading.
What can the funding be used for?
A Larger Business Loan can be used for nearly any company reason, such as business renovations, purchase of new equipment or inventory or as general working capital, and much more. The loan is not available to fund personal expenses.
Is the Larger Business Loan one that is secured?
Asset security is needed to obtain funding above $150,000. It is usually as a result of an charge on assets, and could include registration in the PPSR or making as a caveat.
A personal or director’s guarantee is a commitment to pay off a credit line that is generally based rather than stating security over a particular asset. The person who is signing the ensure is personally liable if the business creditor is unable to make the repayment.
The Personal Property Securities Register (PPSR) is a central, national online registry run by the New Zealand Government. It reflects security interests that are registered for personal property (including goods or assets). The PPSR allows prioritisation over property that is personal to be granted in accordance with the date on which a security interest that is registered.
Caveats are legal document lodged to offer an official notice of a claim to a property.
What is a pre-approval without Credit Check?
If you’re applying for an enterprise loan of $250,000 or more we can offer an initial pre-approval in order to simplify the process. It is possible to apply for this without a credit check, and within 6 hours of the initial application. This pre-approval is based on an initial evaluation that involves answering a couple of financial health questions. It is neither an offer nor a guarantee of credit. A conditional approval is subject an extensive credit evaluation and any offer you receive could have different terms.
Can I be eligible for funding?
You may apply for a business loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and own a New Zealand business (with a valid NZBN/IRD)
- you must prove at least 6 months worth of trade (for you to qualify for unsecured loan $5K – $100K) or 3 years of continuous trading (for the Larger Business Loan $100K up to $500K)
How do I apply?
The application process is simple and simple. Simply complete the online form in few minutes and an experienced business loan specialist will contact you to assist you.
To apply for up to $100,000, you’ll require ID details (valid Driver’s Licence), an NZBN/IRD that is valid and at least 6 months of bank statements.
If you’re looking for loans with larger sizes, you’ll need:
$100K – $250K: Details of application, including credit consent, 6 – 12 months of IRD statements, bank statements (if you have a loan of more than $150K).
$250K to $500K: Details of the application, including credit consent as well as 12 months of bank statements, IRD statement, last 2 years finalised financial statements, and interim current financial year financials, Aged Payables and Aged Receivables summaries.
What speed will I be able to get an answer?
For an unsecured loan ($5K or more) we typically provide an answer within an hour if you submit your request within quality business times and let us utilise the advanced bank verification system to instantly verify your bank’s information online. If you want to upload copies of your banking statement, we’ll provide the decision within an company day.
For the Larger Business Loan ($100K to $500K) we might be capable of offer the conditional pre-approval within 6 hours. After you’ve signed your pre-approval document, you will require to wait between 2 and 3 days for the final approval, however this may be quicker depending on the specifics of each application. Some deals have been approved within less than 24 hours.
The quickest way to apply would be to make sure you apply during standard company hours, and allow us to use our modern bank verification to instantly verify your bank information online. If you opt to upload copies of your bank accounts, it may take a bit longer.
How soon will I receive the cash?
For the Small Business Loan ($5K or more) we can often offer an answer within one hour if you make your application at normal business timings and allow us to use the bank verification system to immediately verify your bank account information online. If you decide to upload copies of your bank statements, we’ll be able to offer an answer within an business day.
If you are applying for Larger Business Loans ($100K or more) we could be likely to provide the conditional pre-approval within about six hours. After you’ve signed the pre-approval, turnaround times are between 2 and 3 days for the final approval. However, this may be quicker depending on the particular circumstances of each application. Some agreements have been approved in just 24 hours.
The fastest method can be ensure you apply during standard business hours and let us use the sophisticated bank verification to check your bank’s information online. If you upload duplicates of your banking statements it takes 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 certain amount, we look at a variety of variables for determining the health for your business and the level of repayments that your business can support. The amount you receive from the loan will be determined by the specific circumstances that are unique to your business.
If you apply for a set amount, we consider a variety of variables to assess the well-being that is your company and the level of repayments that your business can support. The total amount of your loan will depend on the particular circumstances of your company.
Fees & repayments
How much do you charge for a business loan?
When you request business loans with us business credit, we’ll assess the risk profile the business and provide you with a customised proposal that includes the amount of loan, the term and interest rates. It is a business loan is an upfront-priced loan therefore you will be aware of the total amount to be paid, including any charges, interest rates or fees.
What is the factor that determines the price I am charged?
The interest rates on company loans rates depend on several factors like the amount of money that is borrowed, what business assets the money are used to purchase, the industry the business operates in, how long the company has been operating as well as how long the company has enough cash flow to support the loan, and also the general well-being or financial standing of the company.
What are the charges?
There aren’t any hidden charges with our business loans, and you’ll know exactly how much it is that you be required to pay, and at what time, from day one. There’s no compounding interest and no additional fees (as as you make your payments on time).
We don’t charge an application fee. You are able to apply for a loan with without any upfront costs or commitment to apply.
The Origination Fee covers the expenses involved with establishing and managing the loan. This is only a cost if you take out the loan. Our Origination Fee is 2.5 percentage of the loan amount.
Can I pay out the loan earlier?
You can repay the entire amount of your loan in full at any time.
If you choose to take this route, please speak to our friendly business credit professionals. The professionals will provide you with details on repayment along with an early payout estimate. This is calculated as the sum of the principal balance and any accrued interest at the time of the early payout and 1.5 percent of the remaining principal and any outstanding fees.
What is the process for repayments?
In order to help you avoid missing payments and to work with your cash flow cycle we provide repayments either weekly or daily. They are automatically deducted from the nominated company account.
Security & privacy
Will my data be secure?
Security of your data, and making it clear the ways we gather information, use it, and exchange it, as well as ensure the security of your information is of huge importance 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 as well as financial data. Our funders are ISO 27001 certified for our dedication to security for our clients and privacy. We utilise a sophisticated bank verification system link to immediately verify your bank account details online. This allows us to offer an immediate response.
About business loans
What exactly is an asset-based loan (a secured loan)?
The term “asset-based” refers to borrowing where a company owner makes use of an asset that they own to get a loan. The asset can be either an individual property, such as the family home, or an business asset like a truck or piece of equipment.
The majority of lenders, even the major banks, prefer to make loans secured by an asset. If you’re struggling to pay back the loan then the asset could be sold by the lender. In essence it’s the process of securing new financing by taking advantage of the value of what you already own.
Should I require security to secure an company loan?
For loans that exceed $150K, it is not necessary to secure assets before you can access the money, however we do need the personal guarantee. So long as you comply with your loan obligations (as stipulated in the loan contract) Asset security is not needed. For loans that exceed $150,000, generally, there is an individual ensure and security that is in the form an asset charge.