FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Favona Small Business Loans
Tell me about the Favona Small Business Loans
Favona unsecured loans provides amounts of between $5,000 and $100,000, with terms ranging from 3 and 24 months, cash flow friendly repayments, which are either daily or weekly.
What makes the Unsecured Loan different from the traditional company loan?
Apply for the Small Business Loan in under 10 minutes via the internet or over the phone, receive a same day response and the funds could be in your account within 24 hours. Traditional business loans reference an annual rate of interest along with other charges and fees. The business loan is an upfront priced loan so you will be aware in advance of the amount you will have to pay, including any fees, interest or charges. This is then divided 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 virtually any business use, including control of cash flow company renovations, marketing to purchase inventory or new equipment, for general working capital and much more. The loan is not available for personal use.
About larger Favona Business Loans
What is the Larger Favona Business Loan?
The Larger Business Loan is a larger size loan to aid in company expansion opportunities. Loans range from $100,000 to $500,000 with a fixed-term up to 36 months. The repayments are made weekly or fortnightly, depending on your cash flow.
How is the Origination Fee calculated?
It is crucial to note that the Larger Business Loan has an Origination Fee, determined at 2.5 percentage of the amount of the loan.
Am I eligible for the Larger Business Loan?
To be eligible for a loan that is this large the company needs to have been in operation for at least 3 years and have an annual turnover of $700,000. It is necessary to be a New Zealand Citizen (or Permanent Resident) at least 18 years old or have a New Zealand business (with a valid NZBN/IRD) and be able of proving at least 12 months of trading.
How can the funding be utilised?
A large company loan can be used for nearly all business use, including business improvements, purchasing new equipment or inventory or as 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 can be done in the form of a charge against assets, which could also include registration through the PPSR or filing as a caveat.
A personal or director’s guarantee is a guarantee to pay off a credit line that is general in nature, rather than defining the security for a particular asset. The person who signs the ensure is personally accountable if the company lender is not able to make the repayment.
The Personal Property Securities Register (PPSR) is an online, central register run by the New Zealand Government. It contains security interests which are registered with respect to personal property (including objects or assets). The PPSR grants priority over personal property to be granted in accordance with the date on which a security interest that is registered.
Caveats are legal document filed to provide an official notice of a claim to a property.
What is a pre-approval minus Credit Check?
If you’re applying for a Larger Business Loan of more than $250K it is possible to offer an initial pre-approval to make the process. We may be able to make this decision without a credit check, and within 6 hours of your initial application. This pre-approval is made based on a preliminary assessment which includes the answer to a series of financial well-being checks. This is not an offer of credit or guarantee of funds. Acceptance without condition is subject to an assessment of your creditworthiness and any offer you receive could be on different terms.
Application process
Do I have the right to receive funds?
You can apply for an business loan if you;
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and have a New Zealand company (with a valid NZBN/IRD)
- can demonstrate at least 6 months worth of trade (for a unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The application process is quick and simple. Just fill out the online application in just a few minutes, and an experienced business credit specialist will call you to guide you through the process.
To be eligible for up to $100,000 you’ll need the right identification documents (valid Driver’s License), a valid NZBN/IRD and at least 6 months’ worth of bank statements.
If you’re looking for loans with larger sizes, you’ll need:
$100K – $250K: Application requirements, including credit approval, 6-12 months of bank statements, IRD statement (if you have a loan of more than $150K).
$250K – $500K: Application details including credit consent as well as 12 months of bank statements, IRD statements Last 2 years’ finalised financial statements, plus interim financials from the current financial year such as age-related payables and aged Receivables summaries.
How fast will I get an answer?
For an unsecured loan ($5K to $100K) we can often provide a response in one hour, provided you submit your request within quality company time and let us make use of the advanced bank verification system to instantly verify your bank’s information online. If you choose to upload copies of your banking statements , we’ll be able to provide an answer in just 1 company day.
For the Larger Business Loan ($100K up to $500,000) we might be capable of provide you with pre-approval conditional to your application in about 6 hours. After you’ve signed the pre-approval document, you will need to wait around 2-3 days for final approval. However, this may be quicker depending on the specifics of each application. Some deals have been approved in just 24 hours.
The quickest way to apply would be to make sure you apply during normal business hours. You can also permit us to use the modern bank verification link to verify your bank account information online. If you decide to send us duplicates of your banking statement, it takes a bit longer.
How fast will I get the cash?
For the Small Business Loan ($5K up to $100,000) we can often provide an answer within one hour – provided you make your application in standard business times and permit us to make use of the advanced bank verification system link to immediately verify your bank account information online. If you want to upload copies of your banking statement, we’ll offer the decision within one business day.
For the Larger Business Loans ($100K to $500K) we could be able to offer you with conditional pre-approval within about six hours. Once you’ve signed your pre-approval, turnaround times are about 2-3 days for final approval. However, this may be quicker depending on the particular circumstances of each application. Some agreements have been approved within 24 hours.
The fastest method would be to ensure you apply during normal business hours. Also, permit us to use the sophisticated bank verification link to instantly verify your bank account information online. If you decide to send us copies of your bank accounts, it can take a bit longer.
How much can I borrow?
We provide the loan amount between $5,000 and $500,000. When you submit an application for a certain amount, we look at a variety of elements for determining the health of the business and the level of the repayments your company is able to afford. The total amount of your loan will be contingent on the particular circumstances that are unique to your business.
If you apply for a set amount, we take into consideration a variety of elements to determine the health of the company and the level of payments your business can afford. The amount you receive from your loan will depend on the particulars that are unique to your business.
Fees & repayments
How much do you charge for the cost of a business loan?
When you apply for the company credit, we’ll assess the risk assessment the company and provide you with a tailored offer including the amount of loan, the term and the interest rates. A business loan is an upfront cost loan and you’ll be aware in advance of the total amount payable including any interest rates, fees or charges.
What determines the amount I will be charged?
The interest rates on company loans rates depend on several factors like the amount of money that is borrowed, what business assets the money will be used for and the sector the business is operating in, how long the business has been running and whether the business has sufficient cash flow to cover the loan, and overall well-being and creditworthiness of the business.
What are the cost?
There are no hidden fees with our business loans. You’ll know precisely what you’ll be required to pay and when, from the very first day. There’s no compounding and no extra fees (as long as you make your payments in time).
We don’t charge an Application Fee. You can get a cash loan without any upfront costs or any obligation to sign up.
The Origination Fee is the cost associated in establishing and managing the loan. This is only a fee if you decide to take the loan. The Origination Fee for us is 2.5 percent of the amount of loan.
Can I pay out the loan in advance?
You can choose to repay all of your loan at any point in time.
If you are deciding to take this route, please contact our helpful business loan experts. We will provide you with the details of your repayment as well as an early payout amount. This will be calculated as the total of the principal remaining and the accrued interest up to the time of early payout plus 1.5% of the principal remaining and any fees that remain unpaid.
How do repayments work?
To help you avoid missing due dates and also to be in line with your cash flow cycle we provide payments that are either weekly or daily. They are automatically deducted from your nominated company account.
Security & privacy
Will my data be protected?
The security of your personal information, as well as knowing how we collect data, process, exchange and ensure the security of your information is vital and is a crucial part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption techniques to protect your sensitive, personal as well as financial data. Our funders are ISO 27001 qualified for our commitment to customer security and security. We use an advanced bank verification system to immediately verify your bank account details online so we can provide quick responses.
About business loans
What exactly is an asset-based loan (a secured loan)?
Asset-based borrowing is when the business owner uses an asset they own to secure a loan. The asset can be either a personal asset like the family home, or it could be a company asset such as a truck as well as a piece of machine.
The majority of the lenders even the largest banks, are inclined to secure loans against an asset. If you have trouble paying back the loan, your asset may be offered for sale by the lender. In essence it is the process of securing new financing by taking advantage of the value of what you already own.
Do I require security to secure an company loan?
For loans of up to $150K, the requirement for asset security is not required upfront to access the money, however we require a personal guarantee. require a personal guarantee. As long as you follow your loan obligations (as stipulated in the loan contract) Asset security is not required. For loans that exceed $150,000, typically, you will need the option of a personal guarantee and security is provided in the form of a charge over assets.