FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Details of The Somerville Small Business Loans
Tell me what you think of the Somerville Small Business Loans
Somerville unsecured loans offers amounts of between $5,000 and $100,000. The terms range between 3 and 24 months. They also offer cash flow-friendly repayments that are either per day or weekly.
How is this Unsecured Loan different from a traditional business loan?
It is imaginable to apply to your Small Business Loan in under 10 minutes over the phone, receive an answer within the same day and funds may be in your account within 24 hours. Traditional company loans are based on an annual interest rate plus other fees and charges. We offer a company loan is a pre-paid loan which means you know ahead of time the total amount to be paid, including any fees, charges or charges. Then, it is broken down into either a daily or weekly amount to be paid back.
What could be the Small Business Loan be used for?
A Small Business Loan can be used for almost any company purpose including managing cash flows, business renovations, marketing to purchase inventory, new equipment, to fund general working capital and much more. The loan cannot be used for personal reasons.
Concerning Larger Somerville Business Loans
What is the Larger Somerville Business Loan?
The Larger Business Loan is a larger amount of loan to help business expansion opportunities. Loans are between $100,000 and $500,000 with a fixed-term that can last up to 36 months. Repayments are scheduled weekly or fortnightly to work with your situation.
How’s the Origination Fee calculated?
This Larger Business Loan has an Origination Fee which is determined at 2.5 percentage of the amount of the loan.
Do I qualify for the Larger Business Loan?
To qualify for a loan that is this large the company needs to be in operation for at least 3 years and generate an annual revenue of $700K. The applicant must also be a New Zealand Citizen (or Permanent Resident) at least 18 years old, own a New Zealand business (with a valid NZBN/IRD) and be able of proving at minimum 12 months of continuous trading.
What can the funding be used for?
A large business loan can be used for nearly every company need, including company remodeling, buying new equipment or inventory for general working capital and so much more. The loan is not available for personal reasons.
Is the Larger Business Loan one that is secured?
Asset security is necessary for accessing funds over $150,000. This is by way of charge on assets, which could also be registered on the PPSR or the registration of a caveat.
A director’s or personal ensure is a commitment to repay credit that is general in nature, rather than specifying the security for a particular asset. The person who is signing the ensure is personally accountable if the business lender is not able to pay back the debt.
The Personal Property Securities Register (PPSR) is an online, central register operated by the New Zealand Government. It contains security interests granted to individuals who own personal property (including items or assets). The PPSR allows the priority of personal property assigned according to the date the registration of a security interest.
A caveat is a legal form of document to provide notice of a legal claim on a property.
What is a pre-approval that does not require Credit Check?
When you’re applying for the Larger Business Loan that exceeds $250,000 we may be able to provide an initial pre-approval that will help make the process. We might be able to do this without credit checks and within 6 hours of the initial application. The pre-approval is based upon an initial evaluation that involves you answering some financial health questions. This is not an offer or guarantee of financing. The approval of a conditional loan is subject to an exhaustive credit evaluation, and any offer you are offered could be based on different terms.
Do I have the right to receive funds?
You may apply for an company loan if you;
- are a New Zealand Citizen (or Permanent Resident)
- are over 18 years, own a New Zealand business (with a valid NZBN/IRD)
- can demonstrate at least 6 months worth of trade (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 simple and easy. Just fill out the online application in few minutes and a dedicated company loan specialist will contact you to guide you through the process.
To apply for up to $100,000 you’ll require proof of identity (valid Driver’s License), an NZBN/IRD that is valid and at least six months worth of bank statements.
For larger loan sizes, you’ll also require:
$100K – $250K: Application details including credit approval, 6-12 months of IRD statements, bank statements (if you have a loan of more than $150K).
$250K to $500K: Details for application including credit consent, 12 month bank accounts, the IRD statement and the last two years’ finalised financial statements, in addition to interim financial statements for the current year including Aged Payables, Aged Receivables Summary.
What speed will I be able to get a decision?
For an unsecured loan ($5K to $100K) We can usually provide an answer in just one hour – as long as you submit your request during standard company times and permit us to utilise the advanced bank verification system to instantly verify your bank’s information online. If you want to upload copies of your bank statement, we’ll offer an answer in just an company day.
If you are applying for a Larger Business Loan ($100K up to $500,000) we could be in a position to offer you with pre-approval conditional to your application in around 6 hours. After you’ve signed the 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 particular circumstances of each application. Certain offers have been approved in less than 24 hours.
The quickest way to apply would be to make sure you apply during standard company hours. Also, allow us to use our advance bank verification to instantly verify your bank account information online. If you send us copies of your bank accounts, it may take a bit longer.
What is the time frame to receive the money?
For the Small Business Loan ($5K up to $100,000) we can often offer an answer in just one hour if you apply in normal business time and permit us to utilise the advanced bank verification system link to instantly verify your bank details online. If you want to upload copies of your bank statements we can offer a decision within an business day.
If you are applying for Larger Business Loans ($100K to $500K) We may be able to provide the conditional pre-approval within about 6 hours. Once you’ve signed your pre-approval document, you will require to wait around 2-3 days for final approval. However, this could be shorter based upon the circumstances for each application. Certain offers have been approved within 24 hours.
The fastest way is to make sure you apply during normal business hours. You can also let us use the modern bank verification link to check your bank’s information online. If you decide to upload duplicates of your banking accounts, it may take a bit longer.
What’s the minimum amount I can borrow?
We provide loan amounts between $5,000 to $500,000. When you make an application for a particular amount, we consider a variety of variables to determine the health that is your business and the amount of repayments your business can afford. The amount you receive from your loan will be contingent on the particular circumstances for your company.
When you make an application for a set amount, we take into consideration a variety of elements to assess how much we can lend you such as well-being that is your company and the extent of payments your company can support. The total amount of your loan will depend on the specific circumstances for your business.
Fees & repayments
How much do you charge for the cost of a business loan?
If you decide to request business loans with us company financing, we’ll assess the risk assessment for your business and provide an individualised offer that includes the amount of loan, the term and interest rates. The company loan is an upfront cost loan therefore you will be aware of the total amount payable including any charges, interest rates or fees.
What determines the rate that I’m charged?
Interest rates for company loans rates depend on a variety of factors like the amount of money borrowed, the business assets the funds are used to purchase in addition to the industry that the business operates in, the long the business has been running and how long the company has enough cash flow to cover the loan, as well as the overall health and creditworthiness of the business.
What are the charges?
There aren’t any hidden charges with our business loans, and you’ll be aware of the amount you’ll need to pay and when, starting from the first day. There’s no compounding interest, and there are no additional charges (as as long as you pay your payments on time).
We don’t charge an Application Fee. You are able to request a credit loan absolutely no upfront cost and no the obligation to take action.
The Origination Fee covers the costs associated with the setting up and management of the loan. It is only charged for this fee if you decide to take the loan. Our Origination Fee is 2.5% of the loan amount.
Can I repay the loan early?
You can choose to repay the entire amount of your loan early at any time.
If you decide to take this route, please contact our helpful business loans experts. The professionals will provide you with details for repayment and an early payment figure. The figure will be calculated as the total of the principal balance and any accrued interest at the time of the early payout in addition to 1.5% of the remaining principal and any fees that remain unpaid.
How do repayments work?
In order to help you avoid missing due dates and also to be in line your cash flow cycle we provide payments that are either weekly or daily. These are automatically deducted from the nominated company account.
Security & privacy
Will my information be secure?
Security of your data, and being clear about how we collect the information we collect, use, share and ensure the security of your information is of paramount importance and a vital element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption techniques to protect your personal, sensitive as well as financial data. Our funders are ISO 27001 certified for our commitment to security for our customers and security. We utilise a sophisticated bank verification system that allows you to instantly verify your bank account details online. This allows us to provide an immediate response.
About business loans
What’s an asset-based borrow (a secured loan)?
An asset-based loan is when a business owner utilises the assets they have to make the loan. The asset may be an asset belonging to the personal, like the family home, or a company asset like a truck as well as a piece of machine.
The vast majority of banks, including the major banks, prefer to make loans secured by assets. If you are having difficulty paying back the loan, your asset may be sold by the lender. In essence it’s means of securing additional financing using the value of what you already own.
What do I need security to secure a company loan?
Up to $150,000 in loans there is no requirement for asset security prior to the loan’s access however, we do need an individual guarantee. If you adhere to the loan terms (as detailed in your loan contract document) and you are able to meet your obligations, asset security will never be needed. For loans that exceed $150K, generally there is a personal ensure and security that is in the form the charge of assets.