FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Morningside Small Business Loans
Let me know what you think of the Morningside Small Business Loans
Morningside unsecured loans provides amounts between $5,000 and $100,000 with terms between 3 and 24 months, cash flow friendly repayments, which are either daily or weekly.
How is how is the Unsecured Loan different from an ordinary business loan?
Apply to your Small Business Loan in under 10 minutes over the phone, receive a same day response and have the funds in your account in 24 hours. Traditional business loans have an annual rate of interest plus other fees and charges. Our business loan is a loan that is priced upfront and you’ll know ahead of time the total amount payable including any interest, fees or charges. Then, it is divided into a daily or weekly repayment figure.
What could be the Small Business Loan be used for?
The Small Business Loan can be used to fulfill almost any business purpose including cash flow management, business remodels and marketing for purchasing inventory or new equipment, as general working capital and much more. The loan cannot be used to fund personal expenses.
About the Larger Morningside Business Loans
What is the Larger Morningside Business Loan?
The Larger Business Loan is a larger amount of loan to help business growth opportunities. Loans range between $100,000 and $500,000 with a fixed-term for up to 36 months. Repayments are weekly or fortnightly to work with you cashflow.
How’s the Origination Fee determined?
The Larger Business Loan has an Origination Fee which is calculated at 2.5 percentage of the loan amount.
Am I eligible for the Larger Business Loan?
To be eligible for a loan in this amount the company needs to have been operating for a minimum of 3 years and have an annual turnover of $700,000. It is necessary to be a New Zealand Citizen (or Permanent Resident) who is over the age of 18 and have a New Zealand business (with a valid NZBN/IRD) and be able to prove at the least 12 months of operating.
How can the funds be used for?
A larger company loan can be used for almost every business need, including company improvements, purchasing inventory or new equipment or as general working capital, and much more. The loan is not available for personal reasons.
Is the Larger Business Loan one that requires security?
Asset security is necessary to access funding over $150,000. It is usually as a result of an charge against assets, and may include the registration of this on the PPSR or filing a caveat.
A director’s or personal guarantee is a commitment to pay back a loan that is generally based rather than specifying the security for a particular asset. The person who is signing the ensure is personally liable if the business the borrower fails to make the repayment.
The Personal Property Securities Register (PPSR) is an online central register run by the New Zealand Government. It records security interests that have been that are registered for personal property (including objects or assets). The PPSR grants prioritisation over property that is personal to be assigned according to the date the security interest has been registered.
A caveat is a legal document that is filed to offer the public notice of a legal claim on a property.
What is a pre-approval without Credit Check?
If you’re applying for a Larger Business Loan of $250K or more we may be able to provide an initial pre-approval to simplify the process. It is possible to do this without a credit check and within 6 hours of your initial application. The pre-approval process is based on an initial assessment, which involves the answer to a series of financial health checks. This is neither an offer nor a guarantee of funds. The approval of a conditional loan is subject to an assessment of your creditworthiness and any offer you may receive may be subject to different conditions.
The application process
Do I have the right to receive funds?
You are eligible to 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 business (with a valid NZBN/IRD)
- you must prove at least 6 months of business (for the unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The process for applying is fast and simple. Simply complete the online form in just a few minutes, and an experienced business lending specialist will be in touch to assist you.
To apply for up to $100,000, you’ll require ID details (valid Driver’s License), an active NZBN/IRD, and at least six months of bank statements.
For larger loan sizes, you’ll need:
$100K – $250K: Information about the application including credit approval, 6-12 months of IRD statements, bank statements (if you have a loan of more than $150K).
$250K to $500K: Details of the application, including credit consent as well as 12 months of bank statements, IRD statements, last 2 years finalised financial statements, plus interim financial statements for the current year, Aged Payables and Aged Receivables reports.
How fast will I get an answer?
For an unsecured loan ($5K and up) We can usually offer a response in one hour if you submit your request during quality business timings and let us utilise the bank verification system link to instantly verify your bank’s information online. If you choose to upload copies of your banking statements , we’ll be able to offer the decision within 1 company day.
If you are applying for a Larger Business Loan ($100K up to $500,000) we might be able to offer the conditional pre-approval within six hours. Once you’ve signed the pre-approval form, it will take between 2 and 3 days for the final approval, however this can be quicker based on the particular circumstances of each application. Some offers have been approved in the space of 24 hours.
The most effective method for you to apply is make sure you apply during normal company hours and permit us to use the modern bank verification link to instantly verify your bank information online. If you opt to send us copies of your bank statements it will take a little longer.
How quickly will I receive the funds?
For the Small Business Loan ($5K up to $100,000) We can usually offer an answer in just one hour – as long as you apply within normal business times and permit us to use the advanced bank verification system to instantly verify your bank information online. If you want to send us copies of your bank statements, we are able to offer the decision in just 1 business day.
If you are applying for Larger Business Loans ($100K to $500K) we might be likely to provide the conditional pre-approval within six hours. Once you’ve signed your pre-approval, the turnaround time is approximately 2-3 days to receive final approval. However, this can be faster depending on the specifics of each application. Certain deals have been approved in less than 24 hours.
The quickest method can be make sure you apply during normal business hours. Also, allow us to use our advance bank verification to instantly verify your bank information online. If you decide to upload copies of your bank statement, it takes a bit longer.
How much can I borrow?
We provide loan amounts between $5,000 and $500,000. When you submit an application for a certain amount, we will consider a number of variables for determining the health for your business as well as the amount of repayments that your business can afford. The total amount of your loan will depend on the particular circumstances the company.
When you submit an application for a set amount, we look at a range of aspects to assess your well-being that is your company and the amount of payments your company is able to afford. The amount you receive from your loan will be determined by the specific circumstances that are unique to your business.
Fees & repayments
How much should you charge for an business loan?
When you request the company financing, we’ll assess the risk profile the company and provide you with a tailored proposal that includes the amount of the loan, the duration and the interest rates. This company loan is a loan that is priced upfront so you will know in advance the total amount you will have to pay, including charges or interest.
What is the basis for the rate I pay?
The interest rates on company loans rates vary due to variables like the amount to be borrowed, the business assets the funds will be used for, the industry the business is operating in, how long the company has been in operation as well as whether the business has sufficient cash flow to fund the loan, and the overall well-being or financial standing of the company.
What are the fees?
There aren’t any hidden costs for our company loans, and you’ll know exactly how much it is that you be required to pay and when, starting from the day you sign up. There’s not any compounding interest and there are no additional charges (as long as you make your payments on time).
We do not charge an Application Fee. You can request a credit loan with without any upfront costs or any obligation to sign up.
The Origination Fee includes the expenses associated with establishing and managing the loan. This is only a fee if you proceed with the loan. Our Origination Fee is 2.5 percent of the amount of loan.
Do I have the option of paying off the loan earlier?
You can choose to repay the entire amount of the loan early at any time.
If you are deciding to do this please call our helpful business loans experts. They’ll provide you with repayment details along with an early payout estimate. The figure will be calculated as the total of the principal balance and the accrued interest up to the time of the early payout and 1.5 percent of the principal remaining as well as any outstanding fees.
What is the process for repayments?
To make sure that you don’t miss repayments and to fit in with your cash flow cycle we provide payments that are either weekly or daily. They will be automatically deducted from your designated business account.
Security & privacy
Will my information be secure?
Making sure that your information is secure, and being clear about how we collect data, process, exchange and ensure the security of your information is of paramount importance and a vital element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption standards to secure your sensitive, personal financial information and our funders are ISO 27001 qualified for our dedication to security for our customers and security. We make use of an advanced banking verification system to instantly verify your bank account details online so we can provide an immediate response.
About business loans
What’s an asset-based borrow (a secured loan)?
Asset-based borrowing is when an business owner utilises the assets they have to get the funds for a loan. The asset can be either a personal asset like the family home or an company asset such as a truck or piece of equipment.
The vast majority of lending institutions, including the banks with the biggest size, prefer to secure loans against assets. If you’re having trouble paying back the loan, then your asset may be sold by the lender. In essence, it’s a way of securing additional financing using the value of what you already own.
What do I need security to get an company loan?
For loans that exceed $150K, it is not necessary to secure assets upfront to access the money however, we do require a personal guarantee. As long as you follow the loan terms (as stated in your loan contract), asset security will never be required. If you take out loans in excess of $150K generally, there is the option of a personal ensure and security in the form the charge of assets.