FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
More about the Red Hill Small Business Loans
Tell me more about Red Hill Small Business Loans
Red Hill unsecured loans provides amounts between $5,000 and $100,000. Terms range from 3 and 24 months and cash flow-friendly repayments which can be made daily or weekly.
What is this Unsecured Loan different from an traditional business loan?
The application to get the Small Business Loan in under 10 minutes via the internet or by phone. You will receive an instant response and have the funds available in just 24 hours. Traditional company loans are based on an annual rate of interest together with additional fees and charges. This company loan is a cash-based loan therefore you’ll be aware in advance of the total amount due, which includes the interest, fees and charges. Then, it is broken down into weekly or daily installment amount.
What could be the Small Business Loan be used for?
The Small Business Loan can be used for almost any business reason, such as the management of cash flow, business renovations, marketing to purchase inventory or new equipment, for general working capital and much more. The loan is not available to fund personal expenses.
Concerning Larger Red Hill Business Loans
What is the Larger Red Hill Business Loan?
The Larger Business Loan is a larger size loan to aid in business growth opportunities. Loans range from $100,000 to $500,000 over a fixed term for up to 36 months. Repayments are weekly or fortnightly to work with the flow of cash.
How is the Origination Fee calculated?
The Larger Business Loan has an Origination Fee, which is calculated at 2.5 percent of the loan amount.
Am I eligible for the Larger Business Loan?
To be eligible for a loan in this amount the business needs to have been in operation for at least 3 years with an annual turnover of $700K. The applicant must also be a New Zealand Citizen (or Permanent Resident) who is over the age of 18 as well as own a New Zealand company (with a valid NZBN/IRD) and be able of proving at the least 12 months of operating.
What can the funding be used for?
A Larger Business Loan can be used for nearly every company need, including company renovations, purchase of inventory or new equipment, as general working capital and much more. The loan is not available to fund personal expenses.
Is the Larger Business Loan one that requires security?
Asset security is necessary to obtain funding above $150,000. This is by taking a charge on assets, and may be registered through the PPSR or filing a caveat.
A director’s or personal ensure is a promise to repay credit that is general in nature, rather than specifying security over an asset. The person who signs the guarantee is personally liable in the event that the business borrower is unable to repay the debt.
The Personal Property Securities Register (PPSR) is a central, national online register that is operated by the New Zealand Government. It records security interests that have been registered in respect of personal property (including goods or assets). The PPSR permits preference over private property assigned in accordance with the date on which a security interest was registered.
Caveats are legal document lodged to provide notice of a legal claim against a property.
What is a pre-approval that does not require Credit Check?
If you’re seeking larger company loans of more than $250,000, we may offer an initial pre-approval that will help ease the process. We could be able to apply for this without a credit check and within 6 hours of the initial application. This pre-approval is based on a preliminary assessment which includes answering a couple of financial health checks. This is in no way an offer, nor is it a guarantee of credit. The approval of a conditional loan is subject to an extensive credit evaluation and any offer that you are offered could be on different terms.
Are I eligible for funding?
You may apply for an company loan if you;
- are a New Zealand Citizen (or Permanent Resident)
- are 18 years or older, own a New Zealand business (with a valid NZBN/IRD)
- must show at least six months of trading (for you to qualify for unsecured loan $5K – $100K) or 3 years of continuous trading (for the Larger Business Loan $100K or $500K)
How do I apply?
The process for applying is fast and easy. Just fill out the online application in few minutes and an experienced company lending specialist will contact you to assist you.
To apply for up $100,000 you’ll need identification details (valid Driver’s License), a valid NZBN/IRD as well as at least six months worth of bank statements.
Otherwise, for larger loan sizes, you’ll need:
$100K – $250K: Details of application, including credit consent, 6 – 12 months of IRD statements, bank statements (if loan above $150K).
$250K-$500K: Details of the application, including credit consent twelve months bank statement, an IRD statements, last 2 years finalised financial statements, plus interim current financial year financials such as age-related payables and aged Receivables Summary.
How fast will I get a decision?
For an unsecured loan ($5K to $100K) We can usually provide a response in one hour, provided you apply during standard business times and allow us to utilise the bank verification system to instantly verify your bank details online. If you opt to upload copies of your banking statements we can provide a decision within 1 company day.
For the Larger Business Loan ($100K to $500K) we might be able to offer you with a conditional pre-approval in about 6 hours. Once you’ve signed the pre-approval document, you will need to wait about 2-3 days for final approval, however it could be faster based upon the circumstances for each application. Some offers have been approved within just 24 hours.
The quickest way to apply for you to apply is make sure you apply during standard company hours and allow us to use our modern bank verification link to instantly verify your bank account information online. If you upload copies of your bank accounts, it takes a bit longer.
What is the time frame to receive the money?
For the Small Business Loan ($5K and up) we typically offer an answer in just one hour if you apply during standard business timings and you allow us to use the advanced bank verification system to instantly verify your bank’s information online. If you opt to submit copies of your bank statements, we’ll be able to offer an answer in as little as an business day.
If you are applying for Larger Business Loans ($100K up to $500,000) we might be likely to offer you with conditional pre-approval within six hours. After you’ve signed the pre-approval, turnaround times are between 2 and 3 days for the final approval, however this can be faster depending on the specifics of each application. Certain deals have been approved within just 24 hours.
The most effective method is to ensure you apply during normal business hours. Also, allow us to use the modern bank verification link to verify your bank account information online. If you choose to upload duplicates of your banking statements, it will take a little longer.
What is the maximum amount I can borrow?
We offer loans that range from $5,000 and $500,000. When you submit an application for a certain amount we look at a variety of aspects to determine the health that is your company and the amount of repayments your company can support. The amount you receive from your loan will be contingent on the specific circumstances the company.
When you submit an application for a set amount, we look at a range of aspects to assess how much we can lend you such as health of the company as well as the amount of the repayments your business is able to afford. The total amount of the loan will be determined by the particular circumstances the company.
Fees & repayments
What is the cost for an business loan?
If you decide to request our business loans, we’ll assess the risk profile for your company and provide you with a tailored proposal that includes loan amount, term and interest rates. It is a company loan is an upfront cost loan which means you be aware of the total amount due, which includes any interest rates, fees or charges.
What determines the amount I will be charged?
The interest rates on company loans rates depend on a variety of factors like the amount of money that is borrowed, what company assets the money will be used for, the industry the company is in, how long the company has been operating, how long the company has enough cash flow to pay for the loan, as well as the general well-being or creditworthiness of the business.
What are the costs?
There aren’t any hidden costs for our business loans. You’ll know precisely how much you’ll need to pay and when, right from the first day. There’s no compounding interest and no extra fees (as long as you are able to make your payments punctually).
We do not charge an application fee. You can apply for a loan with no upfront cost or any obligation to sign up.
The Origination Fee covers the expenses involved in establishing 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% of the amount of the loan.
Can I pay out the loan in advance?
You may choose to pay back the entire amount of the loan early at any time.
If you are deciding to take this route, please contact our helpful business credit specialists. We will provide you with details for repayment and an early payout figure. The figure will be calculated as the total of the principal remaining and the accrued interest up to the time of early payout in addition to 1.5% of the principal remaining as well as any outstanding fees.
What is the process for repayments?
To help you avoid missing payments and to work with your cash flow cycle we provide repayments either daily or weekly. These are automatically withdrawn from your nominated business account.
Security & privacy
Will my data be secure?
Security of your data, and making it clear the ways we gather the information we collect, use, share and ensure the security of your information is crucial and is a crucial 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 standards to secure your personal, sensitive and financial data and our funders are ISO 27001 certified for our commitment to protecting the security of customers and privacy. We utilise a sophisticated bank verification system link to immediately verify the bank account details online to offer rapid response.
About business loans
What exactly is an asset-based loan (a secured loan)?
The term “asset-based” refers to borrowing where an company owner uses an asset they own to secure a loan. The asset could be an individual property, such as the family home or it could be a business asset such as a vehicle or other piece of machinery.
The vast majority of lenders, including the major banks, prefer to guarantee loans against assets. If you’re having trouble paying back the loan, your assets could be taken over by the lender. In essence, it is means of securing new financing by using the value of what you already have.
Should I require security to secure an company loan?
For loans up to $150K no asset security is required before you can access the money however, we do require the personal guarantee. In the event that you fulfill your loan commitments (as stipulated in your loan contract document) Asset security is not required. For loans over $150,000 generally there is a personal guarantee and security is provided in the form of charges on assets.