FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Paremata Small Business Loans
Let me know what you think of the Paremata Small Business Loans
Paremata unsecured loans offers amounts between $5,000 and $100,000. Terms range from 3 and 24 months, cash flow friendly repayments, which are either daily or weekly.
What is how is the Unsecured Loan different from an traditional business loan?
You can apply to the Small Business Loan in under 10 minutes via the internet or over the phone. You’ll get a same day response and the money could be in your account in 24 hours. Traditional business loans are based on an interest rate per annum along with other charges and fees. We offer a company loan is a pre-paid loan therefore you’ll be aware in advance of the total amount payable including the interest, fees and charges. Then, it is broken down into either weekly or daily payment amount.
What can you use the Small Business Loan be used for?
The Small Business Loan can be used for virtually every business use, including managing cash flows, business improvements, advertising, to purchase inventory or new equipment, to fund general working capital and so much more. The loan is not available for personal purposes.
About the Larger Paremata Business Loans
What is the Larger Paremata Business Loan?
The Larger Business Loan is a larger size loan to aid in company growth opportunities. Loans range from $100,000 to $500,000 with a term fixed for up to 36 months. Repayments are either weekly or fortnightly in order to accommodate your cash flow.
How is the Origination Fee determined?
It is important to note that the Larger Business Loan has an Origination Fee, calculated at 2.5% of the amount of the loan.
Can I get the Larger Business Loan?
To be eligible for a loan in this amount the company needs to be in operation for at least 3 years and have an annual turnover of $700,000. Your business must belong to a New Zealand Citizen (or Permanent Resident) over 18 years and have a New Zealand company (with a valid NZBN/IRD) and be able to demonstrate at the least 12 months of operating.
What can the funding be used for?
A large business loan can be used for almost every company reason, such as company renovations, purchase of inventory or new equipment for general working capital, and much more. The loan is not available for personal purposes.
Is the Larger Business Loan one that is secured?
Asset security is required for accessing funds over $150,000. This is by way of charge on assets, and may include the registration of this in the PPSR or filing a caveat.
A personal or director’s ensure is a guarantee to repay credit that is generally based rather than stating security over a particular asset. The person signing the ensure is personally responsible if the business lender is not able to make the repayment.
The Personal Property Securities Register (PPSR) is an online central register operated by the New Zealand Government. It reflects security interests registered in respect of personal property (including the assets or goods). The PPSR allows preference over private property assigned according to the date a registration of a security interest.
A caveat is a legal document that is filed to offer notice of a legal claim to a property.
What is a pre-approval that does not require Credit Check?
When you’re applying for larger company loans that is greater than $250K we may be able to provide an initial pre-approval in order to simplify the process. We may be able to make this decision without a credit verification and within six hours of your initial application. The pre-approval is based upon an initial evaluation that involves answering a couple of financial well-being questions. This is in no way an offer, nor is it a guarantee of credit. The approval of a conditional loan is subject to an assessment of your creditworthiness and any offer that you might receive could be on different terms.
Do I qualify for funds?
You can apply for an business loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are 18 years or older, have a New Zealand company (with a valid NZBN/IRD)
- you must demonstrate at minimum 6 months’ worth of transactions (for for the unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is fast and simple. Just fill out the online application within a couple minutes, and an experienced company lending specialist will call you to assist you.
To be eligible for up to $100,000 you’ll require ID details (valid Driver’s Licence) and a valid NZBN/IRD and at least six months worth of bank statements.
Otherwise, for larger loan sizes, you’ll also require:
$100K-$250K: Application details including credit approval, 6-12 months of bank statements, IRD statement (if credit is over $150K).
$250K to $500K: Details of the application, including credit consent twelve months of bank statements, IRD statement Last 2 years’ finalised financial statements, in addition to interim financials for the current financial year including Aged Payables, Aged Receivables summaries.
What speed will I be able to get an answer?
For an unsecured loan ($5K or more) we typically offer an answer within one hour if you apply during quality business time and you allow us to utilise the advanced bank verification system link to instantly verify your bank’s information online. If you opt to upload copies of your banking statements , we are able to provide an answer in just one company day.
For the Larger Business Loan ($100K up to $500,000) we could be likely to provide the conditional pre-approval in about six hours. Once you have signed the pre-approval, the turnaround time is between 2 and 3 days for the final approval. However, this may be quicker depending upon the circumstances for each application. Certain deals have been approved in just 24 hours.
The quickest method is to make sure you apply during standard business hours and let us use the modern bank verification to instantly check your bank’s information online. If you upload documents from your account statements it will take a little longer.
How soon will I receive the funds?
For the Small Business Loan ($5K up to $100,000) we typically provide a response in one hour – as long as you make your application during standard business time and permit us to use the bank verification system link to instantly verify your bank’s information online. If you decide to upload copies of your banking statements, we’ll be able to provide the decision within the span of one business day.
If you are applying for Larger Business Loans ($100K or more) We may be likely to offer you with a conditional pre-approval in around six hours. Once you’ve signed the pre-approval, the turnaround time is around 2-3 days for final approval, however it could be faster based upon the circumstances for each application. Some deals have been approved within 24 hours.
The fastest way would be to make sure you apply during standard business hours. Also, allow us to use the modern bank verification link to verify your bank information online. If you decide to upload the copies of bank statements, it will take a little longer.
How much can I borrow?
We offer loans ranging from $5,000 and $500,000. If you apply for a particular amount, we look at a variety of aspects that determine what is the well-being of your business and the level of payments your business is able to afford. The total amount of your loan will depend on the particular circumstances for your company.
If you apply for a particular amount, we will consider a number of aspects to assess how much we can lend you such as well-being of your company and the level of repayments your business can afford. The amount you receive from your loan will be contingent on the particulars for your business.
Fees & repayments
How do you charge for a business loan?
When you request one of our business credit, we’ll assess the risk assessment for your business and offer an individualised offer, including the loan amount, the terms and interest rates. The company loan is an upfront priced loan therefore you will know in advance the total amount payable including any interest rates, fees or charges.
What is the basis for the rate I’m charged?
The interest rates on company loans rates depend on several factors such as the amount that is borrowed, the company assets the funds are used to purchase as well as the field the company operates in, the long the company has been operating for, how long the company has sufficient cash flow to fund the loan, and the overall health as well as creditworthiness business.
What are the cost?
There are no hidden costs for our company loans, and you’ll know precisely how much you’ll need to pay and at what time, from the first day. There’s no compounding and no additional fees (as as long as you pay your payments punctually).
We do not charge an Application Fee. You can get a cash loan with no cost upfront or any obligation to sign up.
The Origination Fee is the cost associated with the setting up and management of 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 amount of loan.
Can I pay out the loan earlier?
You can choose to repay all of your loan early at any time.
If you choose to do this please call our helpful company credit specialists. The specialists will offer you with details for repayment and an early payout figure. This will be calculated as the total of the principal remaining plus any accrued interest as of the time of the early payout in addition to 1.5 percent of the principal amount remaining and any outstanding fees.
What is the process for repayments?
To help you avoid missing payment dates and to align your cash flow schedule, we offer repayments either weekly or daily. They will be automatically deducted from the nominated business account.
Security & privacy
Will my information be secure?
Security of your data, and knowing how we collect the information we collect, use, share and safeguard your data, is crucial and an integral aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We use industry recognised encryption techniques to protect your personal, sensitive as well as financial data. Our funders are ISO 27001 certified for our dedication to customer security and privacy. We utilise a sophisticated bank verification system that allows you to immediately verify your bank account information online. This allows us to provide rapid response.
About business loans
What’s an asset-based borrow (a secured loan)?
Asset-based borrowing is when an company owner makes use of assets they own to get the loan. The asset may be a personal asset like the family home, or a business asset such as a vehicle as well as a piece of machine.
The majority of banks, including the banks with the biggest size, prefer to secure loans against assets. If you’re struggling to pay back the loan then the asset might be taken over by the lender. In essence it is means of securing new funding using the value of what you already have.
Are I require security to secure an business loan?
For loans that exceed $150,000, there is no requirement for asset security prior to the loan’s access however, we do require an individual guarantee. In the event that you fulfill the terms of your loan (as detailed in your loan contract), asset security is not required. For loans over $150K generally, you can get personal ensure and security is provided in the form of charges on assets.