FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Somerville Small Business Loans
Tell me about the Somerville Small Business Loans
Somerville unsecured loans provides amounts between $5,000 and $100,000, with terms ranging from 3 and 24 months. They also offer cash flow friendly repayments that are either per day or weekly.
How is how is the Unsecured Loan different from a traditional business loan?
It is possible to apply for the Small Business Loan in under 10 minutes on the phone. You’ll receive an instant response and funds may be in your account in 24 hours. Traditional business loans have an annual interest rate as well as other fees and charges. We offer a company loan is a loan that is priced upfront therefore you’ll know in advance the amount you will have to pay, including any fees, charges or charges. Then, it is divided into weekly or daily amount to be paid back.
What could be the Small Business Loan be used for?
It is a Small Business Loan can be used to fulfill almost any company need, such as the management of cash flow, company remodels and marketing, to purchase inventory or new equipment, as general working capital and so much more. The loan cannot be used for personal reasons.
About larger Somerville Business Loans
What is the Larger Somerville Business Loan?
The Larger Business Loan is a larger loan size to support company growth opportunities. Loans range between $100,000 and $500,000 for a fixed period of up to 36 months. Repayments are weekly or fortnightly, depending on the flow of cash.
How is the Origination Fee calculated?
The Larger Business Loan has an Origination Fee, which is determined at 2.5 percent of the amount of the loan.
Am I eligible for the Larger Business Loan?
In order 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 $700,000. The applicant must also be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old, own a New Zealand business (with a valid NZBN/IRD) and be able demonstrate at minimum 12 months of continuous trading.
How can the funding be used for?
A larger company loan can be used for nearly every company use, including company renovations, purchase of new equipment or inventory as well as for general working capital, and much more. The loan cannot be used for personal reasons.
Is the Larger Business Loan a secured loan?
Asset security is required to access funding over $150,000. This is by way of charge on assets and can include the registration of this in the PPSR or filing a caveat.
A personal or director’s ensure is a commitment to pay off a credit line that is generally based rather than defining security over a particular asset. The person signing the guarantee is personally accountable 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 lists security interests that are granted to individuals who own personal property (including goods or assets). The PPSR allows priority over personal property to be assigned in accordance with the date on which a security interest that is registered.
Caveats are legal document lodged to offer notice of a legal claim on a property.
What is a pre-approval minus Credit Check?
If you’re seeking a Larger Business Loan of $250K or more we may be able to provide an initial pre-approval to simplify the process. It is possible to apply for this without a credit check and within six hours of your initial application. The pre-approval is based upon an initial evaluation that involves you answering a few financial health checks. It’s not an offer or guarantee of funds. Unconditional approval is subject to an exhaustive credit evaluation, and any offer you might receive could have different conditions.
The application process
Do I have the right to receive funds?
You may apply for a business loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are over 18 years, own a New Zealand company (with a valid NZBN/IRD)
- must show at least six months’ worth of transactions (for for the unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The process for applying is fast and simple. Simply complete the online form in few minutes and a dedicated company credit specialist will call you to help you.
To be eligible for up to $100,000 you’ll need identification details (valid Driver’s License) as well as a valid NZBN/IRD as well as at least 6 months’ worth of bank statements.
Otherwise, for larger loan sizes, you’ll also need:
$100K to $250K: Information about the application including credit approval, 6-12 months of bank statements, IRD statement (if the loan is greater than $150K).
$250K to $500K: Information on the application including credit consent and 12 month bank accounts, the IRD statements and the last two years’ finalised financial statements, in addition to interim financials from the current financial year, Aged Payables and Aged Receivables summary.
How quickly will I receive a decision?
For an unsecured loan ($5K up to $100,000) we usually offer an answer within one hour – as long as you submit your request during quality business timings and permit us to utilise the bank verification system to immediately verify your bank account information online. If you choose to submit copies of your bank statements , we are able to provide the decision in just one business day.
For Larger Business Loans ($100K to $500K) we may be in a position to provide the conditional pre-approval in about 6 hours. After you’ve signed the pre-approval, the turnaround time is around 2-3 days for final approval, however this can be quicker based on the specifics of each application. Certain transactions have received approval within 24 hours.
The most effective method for you to apply is ensure you apply during standard company hours. Also, allow us to use our advance bank verification link to confirm your bank details online. If you opt to send us the copies of bank statements , it may take a bit longer.
How fast will I get the cash?
For the Small Business Loan ($5K or more) we can often provide a response in one hour – as long as you submit your request within standard business timings and allow us to use the advanced bank verification system to instantly verify your bank’s information online. If you decide to submit copies of your bank statements, we’ll be able to provide an answer in just an business day.
If you are applying for Larger Business Loans ($100K or more) We may be in a position to offer you with pre-approval conditional to your application in about six hours. Once you have signed the pre-approval document, you will need to wait around 2-3 days for final approval. However, this may be quicker depending upon the circumstances for each application. Certain deals have been approved within just 24 hours.
The most effective method would be to ensure you apply during standard business hours, and let us use the advanced bank verification system to instantly check your bank’s information online. If you choose to upload duplicates of your banking statement, it may take a bit longer.
How much can I borrow?
We offer the loan amount between $5,000 to $500,000. If you apply for a certain amount, we will consider a number of elements that determine the health of the company and the amount of repayments that your business will be able to support. The amount you receive from your loan will be contingent on the particular circumstances that are unique to your company.
When you apply for a specific amount we consider a variety of elements to assess how much we can lend you such as health of your company as well as the amount of repayments your business will be able to support. The total amount of the loan will be determined by the particular circumstances of your company.
Fees & repayments
How much should you charge for the cost of a company loan?
When you apply for business loans with us business loans, we will assess the risk profile of your company and offer you with a customised offer including the loan amount, the terms and the interest rates. This business loan is an upfront priced loan therefore you will be aware in advance of the total amount you will have to pay, including charges or interest.
What determines the amount I am charged?
Business loan interest rates depend on a variety of variables like the amount to be borrowed, what business assets the money are used to purchase as well as the field the business operates in, the long the company has been operating as well as in the event that the business has enough cash flow to cover the loan, as well as the overall health as well as creditworthiness business.
What are the charges?
There are no hidden fees for our company loans. You’ll know precisely how much you’ll need to pay, and when, starting from the very first day. There’s no compounding and the loan comes with no additional fees (as as long as you pay your payments punctually).
We do not charge an Application Fee. You are able to get a cash loan without any upfront costs or the obligation to take action.
The Origination Fee includes the expenses associated with setting up and managing the loan. It is only charged for 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 total amount of your loan early at any time.
If you choose to take this route, please talk to one of our helpful company loans professionals. We will offer you with the details of your repayment and an early payment figure. This will be calculated as the sum of the principal amount remaining and any accrued interest at the date of early payout and 1.5 percent of the principal balance and any fees that remain unpaid.
How do repayments work?
To ensure that you don’t miss payments and to work with your cash flow general, we offer repayments that are either weekly or daily. These are automatically deducted from your designated business account.
Security & privacy
Will my data be secure?
Protecting your information, and being clear about the ways we gather data, process, exchange and safeguard your data, is of huge importance and is an essential 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 protect your sensitive, personal financial and other data. Our funders are ISO 27001 certified for our dedication to the security of our customers as well as their privacy. We use an advanced bank verification system that allows you to immediately verify your bank account information online to offer quick responses.
About business loans
What’s an asset-based borrow (a secured loan)?
Asset-based borrowing is when an business owner utilises an asset they own to make the funds for a loan. The asset can be a personal asset like the family home, or an business asset like a truck or piece of equipment.
The vast majority of the lenders including the banks with the biggest size, prefer to guarantee loans against assets. If you’re having trouble paying back the loan then the asset might be sold by the lender. In essence it is means of securing new funding making use of the value of what you already have.
What do I need security for a business loan?
For loans of up to $150,000, the requirement for asset security is not required prior to the loan’s access however, we require a personal guarantee. require a personal guarantee. So long as you comply with the terms of your loan (as stipulated in your loan contract document) the security of assets will never be required. If you take out loans in excess of $150,000 generally, you can get personal guarantee and security that is in the form a charge over assets.