FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
More about the Hongoeka Small Business Loans
Let me know what you think of the Hongoeka Small Business Loans
Hongoeka unsecured loans offers amounts of between $5,000 and $100,000, with terms ranging from 3 and 24 months, cash flow friendly repayments that are either per day or weekly.
What is how is the Unsecured Loan different from a traditional company loan?
The application for the Small Business Loan in under 10 minutes on the internet or on the phone. You’ll receive an immediate response, and the money could be on your account within 24 hours. Traditional company loans are based on an annual interest rate along with other charges and fees. We offer a company loan is a pre-paid loan so you will be aware in advance of the total amount due, which includes any interest, fees or charges. Then, it is broken down into a daily or weekly repayment figure.
What can you use the Small Business Loan be used for?
The Small Business Loan can be used for nearly every business purpose including cash flow management, company remodels and marketing for purchasing inventory or new equipment, for general working capital, and much more. The loan cannot be used for personal use.
About Larger Hongoeka Business Loans
What is the Larger Hongoeka Business Loan?
The Larger Business Loan is a larger size loan to aid in company growth opportunities. Loans range from $100,000 to $500,000 for a fixed period of with a maximum of 36 months. The repayments are made weekly or fortnightly in order to accommodate you cashflow.
How’s the Origination Fee calculated?
This 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?
To be eligible for a loan of this size the company needs to be operating for a minimum of 3 years and have an annual turnover of $700,000. 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 to prove at minimum 12 months of business.
How can the funds be utilised?
A large company loan can be used to fund almost all business reason, such as business improvements, purchasing inventory or new equipment or as general working capital and much more. The loan cannot be used to fund personal expenses.
Is the Larger Business Loan one that is secured?
Asset security is necessary for accessing funds over $150,000. This can be done by way of charge over assets, which could also include the registration of this in the PPSR or the registration of as a caveat.
A director’s or personal ensure is a commitment to pay off a credit line that is generally in nature rather than stipulating the security for a particular asset. The person signing the ensure is personally liable in the event that the business lender is not able to re-pay the debt.
The Personal Property Securities Register (PPSR) is an online, central register run by the New Zealand Government. It records security interests that have been registered in respect of personal property (including items or assets). The PPSR permits preference over private property assigned in accordance with the date on which a security interest that is registered.
Caveats are legal document filed to offer the public notice of a legal claim against a property.
What is a pre-approval minus Credit Check?
When you’re applying for the Larger Business Loan that exceeds $250,000, we may offer a preliminary pre-approval to help ease the process. It is possible to apply for this without credit checks and within six hours of your initial application. This pre-approval is made based on an initial assessment, which involves you answering a few financial health checks. It is not an offer of credit or guarantee of funds. A conditional approval is subject an extensive credit evaluation and any offer that you receive could be on different terms.
Application process
Are I eligible for funding?
You may apply for an 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)
- can demonstrate at least 6 months worth of trade (for you to qualify for unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is fast and easy. Just complete the online application in just a few minutes, and a dedicated business expert in lending will be in touch to assist you.
To apply for up $100,000 you’ll require ID details (valid Driver’s License) as well as a valid NZBN/IRD as well as at least six months worth of bank statements.
If you’re looking for loans with larger sizes, you’ll also require:
$100K-$250K: Application requirements, including credit consent, 6 – 12 months of IRD statements, bank statements (if the loan is greater than $150K).
$250K to $500K: Details for application including credit consent and 12 months of bank records, IRD statements, last 2 years finalised financial statements, and interim current financial year financials such as age-related payables and aged Receivables summaries.
How fast will I get a decision?
For an unsecured loan ($5K or more) we usually offer an answer within one hour if you make your application within standard business timings and you allow us to make use of the advanced bank verification system link to instantly verify your bank information online. If you opt to upload copies of your banking statements , we’ll be able to offer an answer in as little as an business day.
If you are applying for a Larger Business Loan ($100K to $500K) we could be able to offer you with conditional pre-approval in about six hours. Once you have signed the pre-approval, turnaround times are approximately 2-3 days to receive final approval. However, this could be shorter based on the circumstances of each application. Some deals have been approved within less than 24 hours.
The fastest way for you to apply is make sure you apply during normal company hours, and permit us to use the modern bank verification link to confirm your bank details online. If you opt to send us duplicates of your banking statement, it takes a bit longer.
What is the time frame to receive the funds?
For the Small Business Loan ($5K up to $100,000) we usually offer an answer within an hour – as long as you make your application at standard business timings and let us utilise the advanced bank verification system link to instantly verify your bank details online. If you choose to upload copies of your bank statements, we are able to provide a decision within the span of one business day.
If you are applying for Larger Business Loans ($100K or more) we could be capable of provide you with conditional pre-approval within six hours. Once you’ve signed your pre-approval, the turnaround time is around 2-3 days for final approval, however this can be faster depending upon the circumstances for each application. Some deals have been approved in 24 hours.
The fastest method is to make sure you apply during standard business hours. Also, permit us to use the sophisticated bank verification link to check your bank’s information online. If you choose to upload the copies of bank statements it will take a little longer.
How much can I borrow?
We offer loans that range from $5,000 to $500,000. When you make an application for a certain amount, we take into consideration a range of factors in order to assess the well-being of your company and the amount of the repayments your company is able to afford. The total amount of your loan will be contingent on the specifics for your business.
When you submit an application for a certain amount, we look at a range of variables to determine your well-being that is your business and the amount of the repayments your company will be able to support. The amount you receive from your loan will be determined by the specifics the business.
Fees & repayments
How do you charge for the cost of a business loan?
When you apply for the business loan, we will assess the risk assessment of your company and provide you with a tailored offer that includes the amount of the loan, the duration and the interest rates. This company loan is an upfront priced loan so you will be aware in advance of the total amount you will have to pay, including charges, interest rates or fees.
What determines the rate that I’m charged?
The interest rates on business loans rates depend on several factors like the amount of money of money borrowed, the company assets the money are used to purchase and the sector the company operates in, how long the company has been in operation for, whether the business has enough cash flow to pay for the loan, and general well-being or financial standing of the business.
What are the fees?
There aren’t any hidden costs for our company loans, and you’ll know exactly how much you’ll need to pay, and when, from day one. There’s no compounding and no extra fees (as long as you are able to make your payments on time).
We don’t charge an Application Fee. You are able to get a cash loan with no upfront cost or obligation to proceed.
The Origination Fee is the cost associated with setting up and managing the loan. You are only charged this cost if you take out the loan. The Origination Fee for us is 2.5 percent of the amount of loan.
Can I repay the loan in advance?
You can repay all of your loan at any point in time.
If you do decide to take this route, please call our helpful business lending experts. They’ll offer you with repayment details as well as an early payout amount. This is calculated as the sum of the principal balance and the accrued interest up to the time of the early payout and 1.5% of the remaining principal as well as any outstanding fees.
How do you make repayments work?
To help you avoid missing payments and to work with your cash flow standard, we offer repayments that are either daily or weekly. These are automatically withdrawn from your company account.
Security & privacy
Will my data be secure?
The security of your personal information, as well as being transparent about how we collect, use, exchange and protect 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 use industry recognised encryption techniques to protect your personal, sensitive financial and other data. Our funders are ISO 27001 certified for our commitment to customer security and privacy. We use an advanced bank verification system to immediately verify your bank account details online, allowing us to provide an immediate response.
About business loans
How do you define asset-based lending (a secured loan)?
The term "asset-based" refers to borrowing where an business owner utilises an asset that they own to get the loan. The asset can be an individual property, such as the family home, or a company asset like a truck or other piece of machinery.
The vast majority of the lenders not just the big banks, tend to guarantee loans against assets. If you’re having trouble paying back the loan, the asset could be taken over by the lender. In essence it’s means of securing new financing taking advantage of the value of what you already have.
Should I need security to secure an company loan?
For loans up to $150K there is no requirement for asset security prior to the loan’s access However, we require a personal guarantee. require the personal guarantee. So long as you comply with your loan obligations (as specified in the loan contract) the security of assets is not needed. If you take out loans in excess of $150K typically, you will need a personal ensure and security that is in the form an asset charge.