FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
More about the Paddington Small Business Loans
Let me know about the Paddington Small Business Loans
Paddington unsecured loans provides amounts of between $5,000 and $100,000. The terms range between 3 and 24 month and cash flow friendly repayments that are either per day or weekly.
How is the Unsecured Loan different from an traditional business loan?
You can apply to get your Small Business Loan in under 10 minutes via the internet or over the phone, receive an answer within the same day and the money could be on your account within 24 hours. Traditional company loans reference an annual interest rate along with other charges and fees. This company loan is an upfront priced loan and you’ll be aware of the amount you will have to pay, including any fees, charges or charges. Then, it is broken down into a daily or weekly installment amount.
What can the Small Business Loan be used for?
The Small Business Loan can be used for virtually every company need, such as the management of cash flow, business remodels and marketing for purchasing inventory or new equipment, for general working capital, and much more. The loan is not available for personal use.
About the Larger Paddington Business Loans
What is the Larger Paddington Business Loan?
The Larger Business Loan is a larger size loan to aid in company expansion opportunities. The loan ranges from $100,000 to $500,000 with a term fixed up to 36 months. Repayments are either weekly or fortnightly depending on your cash flow.
How is the Origination Fee determined?
It is crucial to note that the Larger Business Loan has an Origination Fee, calculated at 2.5 percentage of the amount of the loan.
Am I eligible for the Larger Business Loan?
In order to be eligible for a loan that is this large, your business needs to be in operation for at least 3 years, and have an annual income of $700,000. You must be a New Zealand Citizen (or Permanent Resident) who is over the age of 18 as well as own a New Zealand business (with a valid NZBN/IRD) and be able demonstrate at least 12 months of trading.
How can the funds be used for?
A larger business loan can be used to fund almost every company need, including business remodeling, buying new equipment or inventory 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 required to obtain funding above $150,000. This is by taking a charge on assets, which could also be registered in the PPSR or making a caveat.
A personal or director’s guarantee is a guarantee to pay off a credit line that is general in nature, rather than specifying the security of a specific asset. The person signing the ensure is personally responsible if the business lender is not able to repay the debt.
The Personal Property Securities Register (PPSR) is a central, national online register run by the New Zealand Government. It lists security interests that are which are registered with respect to personal property (including the assets or goods). The PPSR gives the priority of personal property assigned in accordance with the date on which a security interest was registered.
A caveat is a legal document lodged to offer the legal claim to property.
What is a pre-approval without Credit Check?
If you’re requesting the Larger Business Loan that exceeds $250K we can offer an initial pre-approval in order to simplify the process. We may be able to apply for this without credit checks and within six hours of your initial application. The pre-approval is based upon a preliminary assessment which includes answering a couple of financial health questions. It is in no way an offer, nor is it a guarantee of financing. The approval of a conditional loan is subject to an assessment of your creditworthiness and any offer that you are offered could be subject to different terms.
The 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 the age of 18 and have a New Zealand company (with a valid NZBN/IRD)
- you must demonstrate at minimum 6 months’ worth of transactions (for the unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is quick and easy. Just complete the online application within a couple minutes, and an experienced company expert in lending will call you to guide you through the process.
To be eligible for up to $100,000 you’ll require ID details (valid Driver’s License) as well as an NZBN/IRD that is valid and at least six months worth of bank statements.
Otherwise, for larger loan sizes, you’ll require:
$100K – $250K: Details of 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 and 12 months bank statement, an IRD statement as well as the two most recent years’ financial statements, and interim financials from the current financial year, Aged Payables and Aged Receivables summaries.
How fast will I get an answer?
For an unsecured loan ($5K to $100K) We can usually offer an answer within one hour, provided you submit your request during standard company times and let us utilise the advanced bank verification system to immediately verify your bank account information online. If you want to upload copies of your banking statements , we will be able to offer a decision in as little as an business day.
For the Larger Business Loan ($100K to $500K) we might be capable of provide you with a conditional pre-approval within six hours. Once you’ve signed the pre-approval document, you will require to wait between 2 and 3 days for the final approval, however this could be shorter based on the particular circumstances of each application. Some transactions have received approval within just 24 hours.
The fastest way would be to make sure you apply during normal business hours. You can also permit us to use the advanced bank verification system link to verify your bank account information online. If you choose to send us the copies of bank statements it may take a bit longer.
What is the time frame to receive the money?
For the Small Business Loan ($5K to $100K) we can often provide an answer within one hour – as long as you make your application in standard business hours and permit us to use the bank verification system link to instantly verify your bank information online. If you choose to send us copies of your bank statements, we are able to provide a decision within 1 business day.
If you are applying for Larger Business Loans ($100K or more) We may be capable of provide you with a conditional pre-approval within six hours. Once you’ve signed your pre-approval document, you will require to wait approximately 2-3 days to receive final approval. However, this may be quicker depending on the circumstances of each application. Certain agreements have been approved in just 24 hours.
The fastest way can be make sure you apply during standard business hours, and allow us to use the advance bank verification to verify your bank account information online. If you opt to upload duplicates of your banking statements it takes a bit longer.
What’s the minimum amount I can borrow?
We provide loan amounts between $5,000 and $500,000. When you submit an application for a particular amount, we take into consideration a range of factors that determine how much we can lend you health that is your business as well as the amount of payments your company is able to afford. The amount you receive from your loan will depend on the specific circumstances that are unique to your company.
When you apply for a specific amount we look at a range of variables to determine your health of your company and the level of payments your business can afford. The total amount of your loan will be contingent on the specifics the business.
Fees & repayments
How much should you charge for a business loan?
When you request business loans with us business financing, we’ll assess the risk assessment for your company and provide an individualised offer, including the amount of loan, the term and interest rates. This company loan is an upfront-priced loan which means you know the exact amount you will have to pay, including interest rates, fees or charges.
What is the factor that determines the price I am charged?
The interest rates on company loans rates depend on several factors like the amount of money of money borrowed, the business assets the funds will be used for and the sector the business is operating in, how long the business has been running for, whether the business has enough cash flow to fund the loan, as well as the overall well-being and creditworthiness of the business.
What are the cost?
There aren’t any hidden costs for our business loans. You’ll know exactly how much it is that you be required to pay, and when, starting from the very first day. There’s no 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 the obligation to take action.
The Origination Fee covers the costs associated with establishing and managing the loan. It is only charged for this cost if you take out the loan. Our Origination Fee is 2.5 percent of the amount of loan.
Can I pay out the loan early?
You can repay the total amount of your advance loan at any time.
If you choose to pursue this option, please speak to our friendly business credit experts. The specialists will offer you with the details of your repayment along with an early payout estimate. This will be calculated as the sum of the principal balance and any accrued interest at the time of the early payout and 1.5 percent of the principal balance and any outstanding fees.
How do repayments work?
To make sure you do not miss due dates and also to be in line your cash flow schedule, we offer repayments that are either weekly or daily. They are automatically deducted from your designated company account.
Security & privacy
Will my data be protected?
Making sure that your information is secure, and being upfront about the ways we gather data, process, exchange and ensure the security of your information is of paramount importance and a vital aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption standards to protect your personal, sensitive financial information and our funders are ISO 27001 certified for our dedication to the security of our customers as well as their security. We employ a highly sophisticated bank verification system to immediately verify the bank account details online. This allows us to offer quick responses.
About business loans
What exactly is an asset-based loan (a secured loan)?
An asset-based loan is when a company owner uses the assets they have to make a loan. The asset could be a personal asset like the family home, or an company asset like a truck or piece of equipment.
The vast majority of banks, not just the major banks, prefer to make loans secured by assets. If you are having difficulty paying back the loan then the asset could be offered for sale by the lender. In essence, it’s the process of securing additional financing using the worth of the asset you already own.
Do I require security to get a company loan?
For loans up to $150,000 the requirement for asset security is not required in advance to gain access to the funds however, we do need an individual guarantee. So long as you comply with your loan obligations (as stated in your loan contract document) the security of assets is not needed. For loans of over $150K typically, you will need an individual guarantee and security that is in the form charges on assets.