FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Darra Small Business Loans
Tell me about the Darra Small Business Loans
Darra unsecured loans offers the range of $5,000 to $100,000 with terms between 3 and 24 months and cash flow-friendly repayments that are either per day or weekly.
What makes what makes the Unsecured Loan different from a traditional business loan?
You can apply to get the Small Business Loan in under 10 minutes over the phone, receive an answer within the same day and funds may be on your account within 24 hours. Traditional business loans have an interest rate per annum together with additional fees and charges. The business loan is an upfront priced loan therefore you’ll be aware in advance of the total amount to be paid, including any interest, fees or charges. This is then broken down into either weekly or daily installment amount.
What can be the Small Business Loan be used for?
The Small Business Loan can be used for almost every company need, such as managing cash flows, company remodels and marketing to purchase inventory, new equipment, or as general working capital and so much more. The loan cannot be used to fund personal expenses.
About Larger Darra Business Loans
What is the Larger Darra 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 over a fixed term that can last up to 36 months. Repayments are either 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.
Am I eligible for the Larger Business Loan?
To be eligible for a loan that is this large, your company needs to be operating for a minimum of 3 years, and have an annual income of $700,000. You must be a New Zealand Citizen (or Permanent Resident) over 18 years or have a New Zealand business (with a valid NZBN/IRD) and be able demonstrate at minimum 12 months of business.
How can the funds be utilised?
A Larger Business Loan can be used for almost any company reason, such as company renovations, purchase of new equipment or inventory as well as for general working capital and so much more. The loan is not available to fund personal expenses.
Is the Larger Business Loan one that requires security?
Asset security is needed for accessing funds over $150,000. This is by way of charge on assets, and may be registered in the PPSR or filing as a caveat.
A director’s or personal guarantee is a promise to pay back a loan that is generally based rather than stipulating security over a particular asset. The person who is signing the ensure is personally liable if the company lender is not able to make the repayment.
The Personal Property Securities Register (PPSR) is an online central register that is operated by the New Zealand Government. It lists security interests that are granted to individuals who own personal property (including objects or assets). The PPSR allows preference over private property assigned in accordance with the date on which a security interest that is registered.
Caveats are legal document that is filed to provide the public notice of a legal claim on a property.
What is a pre-approval that does not require Credit Check?
If you’re seeking the Larger Business Loan of more than $250,000, we may offer an initial pre-approval to simplify the process. We could be able to get this done without a credit verification 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 well-being questions. This is in no way an offer, nor is it a guarantee of financing. The approval of a conditional loan is subject to an extensive credit evaluation and any offer that you receive could be on different terms.
Application process
Do I have the right to receive funds?
You can apply for an company 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 of business (for a unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K or $500K)
How do I apply?
The process for applying is fast and simple. Complete the online form in few minutes and an experienced business credit specialist will call you to guide you.
For a loan of up to $100,000 you’ll require ID details (valid Driver’s Licence) along with a valid NZBN/IRD as well as at least 6 months of bank statements.
In addition, for larger loan sizes, you’ll need:
$100K-$250K: Information about the application including credit consent, 6-12 months of IRD statements, bank statements (if loan above $150K).
$250K – $500K: Details of the application, including credit consent twelve month bank accounts, the IRD statement as well as the two most recent years’ financial statements, as well as interim financials from the current financial year such as age-related payables and aged Receivables reports.
How soon will I hear an answer?
For an unsecured loan ($5K to $100K) we typically provide a response in one hour if you make your application in quality business times and you allow us to utilise the bank verification system to instantly verify your bank information online. If you choose to submit copies of your bank statements we can offer a decision within just one company day.
For the Larger Business Loan ($100K or more) we could be capable of provide you with conditional pre-approval within about six hours. After you’ve signed your pre-approval form, it will take between 2 and 3 days for the final approval, however it could be faster based on the circumstances of each application. Certain agreements have been approved in less than 24 hours.
The quickest method is to ensure you apply during standard company hours and permit us to use the advance bank verification link to check your bank’s information online. If you decide to send us copies of your bank statements , it can take a bit longer.
What is the time frame to receive the funds?
For the Small Business Loan ($5K up to $100,000) we usually provide an answer in just one hour – as long as you apply during standard business times and you allow us to use the advanced bank verification system to instantly verify your bank’s information online. If you choose to submit copies of your bank statement, we’ll provide a decision within one business day.
For Larger Business Loans ($100K up to $500,000) we may be in a position to offer you with a conditional pre-approval within about 6 hours. Once you’ve signed your pre-approval document, you will need to wait about 2-3 days for final approval, however this may be quicker depending on the specifics of each application. Some transactions have received approval in 24 hours.
The fastest method would be to ensure you apply during standard business hours, and allow us to use our advance bank verification to instantly verify your bank account information online. If you opt to upload documents from your account statements, it will take a little longer.
What’s the minimum amount I can borrow?
We provide loans that range from $5,000 and $500,000. When you submit an application for a certain amount we look at a variety of aspects to determine what is the health for your company and the level of repayments your company will be able to support. The amount you receive from your loan will be contingent on the particular circumstances of your business.
When you make an application for a particular amount, we consider a variety of elements to determine how much we can lend you such as well-being that is your business as well as the amount of repayments your company can afford. The amount you receive from the loan will be determined by the specific circumstances of your business.
Fees & repayments
What is the cost for the cost of a business loan?
If you decide to request the business loans, we will assess the risk assessment the business and offer you with a tailored offer that includes the amount of the loan, the duration and interest rates. This business loan is an upfront-priced loan and you’ll be aware in advance of the total amount you will have to pay, including interest rates, fees or charges.
What is the basis for the rate I pay?
Business loan interest rates depend on a variety of variables like the amount to be of money borrowed, the business assets the funds will be used for, the industry the business is operating in, how long the business has been running as well as how long the business has enough cash flow to cover the loan, as well as the overall health or financial standing of the company.
What are the charges?
There are no hidden fees for our business loans. You’ll know precisely what you’ll need to pay and when, right from the very first day. There’s not any compounding interest and no extra fees (as as you make your payments in time).
We don’t charge an Application Fee. You are able to apply for a loan with no upfront cost or the obligation to take action.
The Origination Fee covers the expenses involved in establishing and managing the loan. The only way to pay this fee if you decide to take the loan. Our Origination Fee is 2.5 percentage of the amount of loan.
Do I have the option of paying off the loan earlier?
You can decide to repay the entire amount of the loan in full at any time.
If you are deciding to take this route, please speak to our friendly company credit specialists. They’ll provide you with details for repayment and an early payout figure. It will be calculated using the sum of the principal balance and the accrued interest up to the time of early payout, plus 1.5 percent of the principal remaining plus any outstanding fees.
What are the repayment methods?
In order to help you avoid missing payment dates and to align your cash flow schedule, we provide payments that are either daily or weekly. These are automatically withdrawn from your designated business account.
Security & privacy
Will my information be protected?
Protecting your information, and making it clear how we collect data, process, exchange and protect your information, is of huge importance and a vital part of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We use industry recognised encryption protocols to safeguard your sensitive, personal financial information and our funders are ISO 27001 qualified for our dedication to protecting the security of clients and privacy. We use an advanced bank verification system that allows you to immediately verify your bank account information online so we can offer rapid response.
About business loans
What exactly is an asset-based loan (a secured loan)?
Asset-based borrowing is when an business owner utilises assets they own to secure a loan. The asset may be an individual property, such as the family home, or it could be a business asset such as a truck as well as a piece of machine.
The majority of lenders, including the major banks, prefer to secure loans against assets. If you’re having trouble paying back the loan, the asset might be transferred to the lender. In essence, it’s the process of securing new funding using the worth of the asset you already own.
Should I require security to get an business loan?
For loans up to $150,000 it is not necessary to secure assets in advance to gain access to the funds, however we do need a personal guarantee. As long as you follow the terms of your loan (as stated in the loan contract) Asset security will never be needed. For loans over $150K generally, you are able to get the option of a personal ensure and security is provided in the form of a charge over assets.