FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
More about the New Zealand Small Business Loans
Tell me how you are able to avail the New Zealand Small Business Loans
New Zealand unsecured loans offers amounts between $5,000 and $100,000, with terms ranging from 3 and 24 months. They also offer cash flow-friendly repayments which can be made daily or weekly.
What makes what makes the Unsecured Loan different from a traditional business loan?
You can apply for this Small Business Loan in under 10 minutes via the internet or over the phone. You’ll get an immediate response, and the money could be available in just 24 hours. Traditional company loans reference an annual rate of interest plus other fees and charges. Our business loan is a loan that is priced upfront therefore you’ll be aware of the total amount to be paid, including any fees, interest or charges. Then, it is broken down into weekly or daily amount to be paid back.
What can the Small Business Loan be used for?
It is a Small Business Loan can be used for nearly every business need, such as managing cash flows, business improvements, advertising to purchase inventory, new equipment, as general working capital and so much more. The loan cannot be used for personal purposes.
About larger New Zealand Business Loans
What is the Larger New Zealand Business Loan?
The Larger Business Loan is a larger loan size to support business growth opportunities. The loan ranges from $100,000 to $500,000 for a fixed period of for up to 36 months. The repayments are made weekly or fortnightly, depending on you cashflow.
How’s the Origination Fee determined?
A Larger Business Loan has an Origination Fee that is determined at 2.5% of the amount of the loan.
Am I eligible for the Larger Business Loan?
To be eligible for a credit in this amount the company needs to have been operating for a minimum of 3 years with 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 company (with a valid NZBN/IRD) and be able of proving at minimum 12 months of continuous trading.
How can the funds be utilised?
A larger business loan can be used to fund almost all company reason, such as business improvements, purchasing inventory or new equipment, as general working capital, and much more. The loan is not available for personal use.
Is the Larger Business Loan one that is secured?
Asset security is required to obtain funding above $150,000. It’s in the form of a charge over assets and can include registering this through the PPSR or making as a caveat.
A personal or director’s ensure is a guarantee to pay off a credit line that is generally based rather than stating security over an asset. The person who signs the guarantee is personally accountable if the company borrower is unable to re-pay the debt.
The Personal Property Securities Register (PPSR) is a central, national online register run by the New Zealand Government. It contains security interests registered in respect of personal property (including goods or assets). The PPSR grants the priority of personal property assigned in accordance with the date on which a security interest has been registered.
The caveat can be described as a formal form of document to offer notice of a legal claim on a property.
What is a pre-approval minus Credit Check?
If you’re applying for the Larger Business Loan of more than $250K we may be able to provide an initial pre-approval that will help smooth out the process. We may be able to apply for this without a credit verification and within six hours of your initial application. This pre-approval is based on a preliminary assessment which includes you answering some financial well-being questions. It’s not an offer or guarantee of credit. The approval of a conditional loan is subject to an exhaustive credit evaluation, and any offer you receive could be based on different terms.
The application process
Do I have the right to receive funds?
You are eligible to apply for an company loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are 18 years or older, own a New Zealand company (with a valid NZBN/IRD)
- can demonstrate 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 - $500K)
How do I apply?
The application process is fast and easy. Just fill out the online application within a few minutes and a dedicated business credit specialist will call you to guide you through the process.
To apply for up to $100,000, you’ll need ID details (valid Driver’s License) as well as a valid NZBN/IRD and at least 6 months of bank statements.
In addition, for larger loan sizes, you’ll require:
$100K-$250K: Details of application, including credit approval, 6-12 months of IRD statements, bank statements (if the loan is greater than $150K).
$250K – $500K: Application details including credit consent, 12 months of bank records, IRD statements and the last two years’ finalised financial statements, as well as interim financials from the current financial year, Aged Payables and Aged Receivables summaries.
How soon will I hear a decision?
For an unsecured loan ($5K up to $100,000) we usually offer an answer within one hour, provided you submit your request during standard business hours and allow us to utilise the advanced bank verification system to instantly verify your bank information online. If you choose to upload copies of your banking statements , we are able to offer the decision in as little as an company day.
For Larger Business Loans ($100K to $500K) we could be likely to offer you with pre-approval conditional to your application within about 6 hours. Once you’ve signed the pre-approval form, it will take around 2-3 days for final approval. However, this can be quicker based on the specifics of each application. Some transactions have received approval in the space of 24 hours.
The quickest way to apply for you to apply is make sure you apply during normal company hours, and allow us to use the advanced bank verification system link to confirm your bank details online. If you opt to upload copies of your bank statements , it can take a bit longer.
How soon will I receive the funds?
For the Small Business Loan ($5K and up) we can often offer an answer in just one hour – as long as you apply during standard business time and let us use the advanced bank verification system link to instantly verify your bank’s information online. If you want to submit copies of your bank statements, we are able to offer the decision within 1 business day.
For the Larger Business Loans ($100K and up) we might be likely to offer you with conditional pre-approval within 6 hours. Once you’ve signed the pre-approval, turnaround times are approximately 2-3 days to receive final approval, however this could be shorter based on the specifics of each application. Some agreements have been approved within just 24 hours.
The quickest method is to make sure you apply during standard business hours. Also, allow us to use our modern bank verification link to instantly check your bank’s information online. If you upload duplicates of your banking accounts, it may take a bit longer.
How much can I borrow?
We provide loan amounts between $5,000 to $500,000. If you apply for a certain amount we take into consideration a range of factors for determining your health of your company and the level of repayments your company will be able to support. The total amount of your loan will be contingent on the particular circumstances for your business.
When you submit an application for a specific amount we will consider a number of factors to assess the well-being of your company and the amount of repayments your business can support. The total amount of the loan will be determined by the specifics the company.
Fees & repayments
What is the cost for the cost of a business loan?
When you make an application for one of our company loan, we’ll assess the risk profile for your business and provide you with a tailored proposal that includes loan amount, term and the interest rates. This company loan is a loan that is priced upfront so you will know in advance the total amount payable including any interest rates, fees or charges.
What is the factor that determines the price I am charged?
Interest rates for business loans rates depend on a variety of factors including the amount borrowed, what company assets the funds will be used for in addition to the industry that the company operates in, the long the business has been in operation for, in the event that the company has sufficient cash flow to support the loan, and also the overall well-being and creditworthiness of the business.
What are the fees?
There are no hidden costs for our business loans. You’ll know precisely what you’ll need to pay and when, right from the very first day. There’s no compounding and no additional fees (as as you make your payments in time).
We do not charge an application fee. You are able to apply for a loan with no cost upfront or the obligation to take action.
The Origination Fee includes the expenses associated with setting up and managing the loan. This is only a fee if you choose to proceed with the loan. The Origination Fee for us is 2.5 percent of the amount of loan.
Can I pay off the loan early?
You may choose to pay back the entire amount of the loan at any point in time.
If you are deciding to pursue this option, please talk to one of our helpful business credit experts. They’ll provide you with details on repayment and an early payment figure. It will be calculated using the total of the principal remaining and any accrued interest at the date of early payout, plus 1.5% of the principal amount remaining 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 with your cash flow cycle we offer repayments that are either weekly or daily. They will be automatically deducted from your nominated company account.
Security & privacy
Will my information be protected?
The security of your personal information, as well as knowing the ways we gather information, use it, and exchange it, as well as ensure the security of your information is of paramount importance and is a crucial part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We make use of industry-standard encryption techniques to protect your sensitive, personal and financial data and our funders are ISO 27001 certified for our dedication to protecting the security of clients and privacy. We employ a highly sophisticated banking verification system to instantly verify the bank account details online so we can provide a fast response.
About business loans
How do you define asset-based lending (a secured loan)?
Asset-based borrowing occurs when the company owner utilises the assets they have to obtain the loan. The asset can be an individual asset, such as the family home or an business asset such as a vehicle or piece or equipment.
The vast majority of banks, not just the largest banks, are inclined to guarantee loans against assets. If you’re struggling to pay back the loan then your asset may be sold by the lender. In essence, it is the process of securing new financing using the value of what you already have.
Should I require security to secure an business loan?
For loans that exceed $150K, the requirement for asset security is not required upfront to access the money However, we require a personal guarantee. need an individual guarantee. As long as you follow your loan obligations (as detailed in the loan contract) the security of assets is not required. For loans over $150,000 generally there is a personal guarantee and security is provided in the form of a charge over assets.
