FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
More about the Karaka Small Business Loans
Let me know about the Karaka Small Business Loans
Karaka unsecured loans provides amounts between $5,000 and $100,000 with terms between 3 and 24 month and cash flow-friendly repayments, which are either daily or weekly.
What is this Unsecured Loan different from a traditional company loan?
The application to get the Small Business Loan in under 10 minutes online or by phone. You will receive an answer within the same day and the funds could be on your account within 24 hours. Traditional business loans refer to an interest rate per annum together with additional fees and charges. The company loan is a pre-paid loan so you will know ahead of time the total amount payable including the interest, fees and charges. This is then broken down into a daily or weekly installment amount.
What could the Small Business Loan be used for?
A Small Business Loan can be used for virtually every business use, including managing cash flows, business remodels and marketing, to purchase inventory or new equipment, for general working capital and much more. The loan cannot be used for personal reasons.
About larger Karaka Business Loans
What is the Larger Karaka Business Loan?
The Larger Business Loan is a larger loan size to support company growth opportunities. Loans are between $100,000 and $500,000 over a fixed term for up to 36 months. Repayments are weekly or fortnightly in order to accommodate your cash flow.
How’s the Origination Fee determined?
This Larger Business Loan has an Origination Fee, which is calculated at 2.5% of the amount of the loan.
Am I eligible for the Larger Business Loan?
To be eligible for a credit that is this large the business needs to have been operating for a minimum of 3 years with an annual turnover of $700K. You must be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old or have a New Zealand company (with a valid NZBN/IRD) and be able to prove at the least 12 months of operating.
How can the funding be utilised?
A Larger Business Loan can be used to fund almost any company use, including business renovations, purchase of inventory or new equipment as well as for general working capital and so much more. The loan cannot be used for personal reasons.
Is the Larger Business Loan one that requires security?
Asset security is necessary to obtain funding above $150,000. This is in the form of a charge against assets, which could also include the registration of this on the PPSR or registering a caveat.
A director’s or personal guarantee is a promise to repay a loan which is generally based rather than stating security over an asset. The person who signs the ensure is personally accountable if the business the borrower fails to repay 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 objects or assets). The PPSR permits priority over personal property to be assigned according to the date the security interest that is registered.
A caveat is a legal document filed to offer notice of a legal claim to a property.
What is a pre-approval without Credit Check?
If you’re applying for larger business loans that is greater than $250,000 we can offer an initial pre-approval in order to make the process. We might be able to do this without a credit verification and within 6 hours of your initial application. The pre-approval is based upon a preliminary assessment which includes answering a couple of financial well-being questions. It’s not an offer of credit or guarantee of credit. Unconditional approval is subject to a full credit assessment and any offer that you might receive could be on different conditions.
The application process
Can I be eligible for funding?
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 company (with a valid NZBN/IRD)
- you must demonstrate at minimum 6 months’ worth of transactions (for a unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K or $500K)
How do I apply?
The application process is quick and simple. Simply complete the online form within a few minutes and a dedicated business loan specialist will contact you to assist you.
To apply for up $100,000, you’ll need ID details (valid Driver’s License) along with a valid NZBN/IRD and at least six months worth of bank statements.
For larger loan sizes, you’ll need:
$100K to $250K: Application requirements, including credit consent, 6 – 12 months of bank statements, IRD statement (if credit is over $150K).
$250K-$500K: Details for application including credit consent twelve months of bank statements, IRD statements as well as the two most recent years’ financial statements, as well as interim current financial year financials as well as Aged Payables and Receivables summary.
How quickly will I receive an answer?
For an unsecured loan ($5K up to $100,000) we typically provide a response in one hour, provided you make your application within quality company timings and allow us to make use of the advanced bank verification system link to instantly verify your bank information online. If you want to submit copies of your bank statements we can provide an answer in as little as one company day.
For Larger Business Loans ($100K to $500K) we may be in a position to offer the conditional pre-approval within about 6 hours. Once you’ve signed the pre-approval form, it will take between 2 and 3 days for the final approval, however this could be shorter based upon the circumstances for each application. Some offers have been approved within just 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 our modern bank verification link to verify your bank account information online. If you decide to send us the copies of bank statements it takes a bit longer.
How soon will I receive the money?
For the Small Business Loan ($5K to $100K) we can often provide an answer within an hour if you make your application at standard business timings and you allow us to make use of the advanced bank verification system link to instantly verify your bank details online. If you decide to send us copies of your bank statement, we’ll provide a decision within one business day.
If you are applying for Larger Business Loans ($100K and up) we could be in a position to provide you with pre-approval conditional to your application within 6 hours. Once you’ve signed your pre-approval document, you will require to wait about 2-3 days for final approval. However, this could be shorter based on the specifics of each application. Some offers have been approved in less than 24 hours.
The quickest method would be to make sure you apply during standard business hours, and permit us to use the modern bank verification to confirm your bank details online. If you opt to upload duplicates of your banking statements it may take a bit longer.
How much can I borrow?
We offer the loan amount between $5,000 to $500,000. When you submit an application for a certain amount, we take into consideration a range of elements that determine what is the well-being of your company and the level of repayments your business will be able to support. The total amount of your loan will depend on the particular circumstances for your company.
If you apply for a certain amount, we take into consideration a variety of variables to determine how much we can lend you such as health of your business and the amount of payments your business is able to afford. The total amount of your loan will be contingent on the particulars of your company.
Fees & repayments
How much do you charge for an company loan?
When you apply for business loans with us business loan, we will assess the risk profile for your company and provide you with a customised proposal that includes loan amount, term and interest rates. It is a business loan is an upfront cost loan which means you be aware in advance of the total amount payable including any charges or interest.
What is the factor that determines the price I will be charged?
Business loan interest rates depend on several factors including the amount borrowed, what company assets the money are used to purchase in addition to the industry that the company is operating in, how long the business has been running for, whether the business has sufficient cash flow to pay for the loan, and also the overall well-being and creditworthiness of the business.
What are the fees?
There are no hidden fees with our business loans, and you’ll know precisely what you be required to pay, and when, starting from the first day. There’s no compounding interest and no additional fees (as as you make your payments punctually).
We do not charge an Application Fee. You are able to get a cash loan with no upfront cost or commitment to apply.
The Origination Fee includes the expenses associated with the setting up and management of the loan. It is only charged for this cost if you take out the loan. The Origination Fee for us is 2.5 percent of the loan amount.
Can I repay the loan earlier?
You may choose to pay back the total amount of your loan in full at any time.
If you are deciding to take this route, please speak to our friendly business loan specialists. The specialists will offer you with repayment details and an early payment figure. This is calculated as the total of the remaining principal amount plus any accrued interest as of the time of the early payout plus 1.5 percent of the principal amount remaining plus any outstanding fees.
What are the repayment methods?
To help you avoid missing payments and to work your cash flow cycle we provide payments that are either weekly or daily. They will be automatically deducted from your nominated business account.
Security & privacy
Will my information be secure?
Protecting your information, and being clear about how we collect data, process, exchange and protect your information, is crucial and is a crucial aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption protocols to safeguard your personal, sensitive financial and other data. Our funders are ISO 27001 certified for our dedication to security for our customers and privacy. We employ a highly sophisticated banking verification system to instantly verify your bank account details online. This allows us to offer rapid response.
About business loans
What’s an asset-based borrow (a secured loan)?
The term "asset-based" refers to borrowing where a business owner utilises an asset that they own to make a loan. The asset can be an individual asset, such as the family home or it could be a business asset such as a vehicle or piece or equipment.
The vast majority of lending institutions, not just the banks with the biggest size, prefer to make loans secured by assets. If you are having difficulty paying back the loan, then the asset might be transferred to the lender. In essence it is a way of securing new financing using the worth of the asset you already have.
Are I require security to secure an business loan?
For loans of up to $150,000, no asset security is required upfront to access the money however, we do require an individual guarantee. If you adhere to the loan terms (as stated in your loan contract document) and you are able to meet your obligations, asset security is not required. For loans over $150,000 generally, there is an individual ensure and security in the form a charge over assets.