FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Red Hill Small Business Loans
Let me know how you can avail the Red Hill Small Business Loans
Red Hill unsecured loans provides amounts of between $5,000 and $100,000, with terms ranging from 3 and 24 month and cash flow-friendly repayments, which are either daily or weekly.
What is what makes the Unsecured Loan different from an traditional company loan?
You can apply to the Small Business Loan in under 10 minutes over the phone. You’ll get an immediate response, and the funds could be in your account in 24 hours. Traditional business loans are based on an annual rate of interest together with additional fees and charges. The business loan is a pre-paid loan therefore you’ll be aware in advance of the amount you will have to pay, including the interest, fees and charges. Then, it is broken down into either a daily or weekly amount to be paid back.
What could you use the Small Business Loan be used for?
It is a Small Business Loan can be used for virtually every business purpose including managing cash flows, business renovations, marketing, to purchase inventory or new equipment, for general working capital, and much more. The loan is not available to fund personal expenses.
About the Larger Red Hill Business Loans
What is the Larger Red Hill Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund business expansion 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 depending on you cashflow.
How is the Origination Fee calculated?
It is important to note that the Larger Business Loan has an Origination Fee, which is determined at 2.5% of the loan amount.
Am I eligible for the Larger Business Loan?
In order to be eligible for a loan in this amount the business needs to have been trading for at least 3 years and have an annual turnover of $700,000. It is necessary to be a New Zealand Citizen (or Permanent Resident) at least 18 years old or have a New Zealand company (with a valid NZBN/IRD) and be able to demonstrate at the least 12 months of operating.
What can I use the funds for?
A large company loan is a great option for almost any business use, including company remodeling, buying equipment or inventory or as general working capital and much more. The loan cannot be used for personal use.
Is the Larger Business Loan one that requires security?
Asset security is necessary to obtain funding above $150,000. This can be done by way of charge against assets and can include registering this on the PPSR or registering as a caveat.
A director’s or personal guarantee is a commitment to repay credit that is generally based rather than defining security over an asset. The person who is signing the guarantee is personally liable if the business creditor is unable to re-pay the debt.
The Personal Property Securities Register (PPSR) is an online central register run by the New Zealand Government. It contains security interests registered in respect of personal property (including the assets or goods). The PPSR allows preference over private property assigned according to the date the security interest was registered.
An affidavit is an official document lodged to offer an official notice of a claim to property.
What exactly is a preapproval without Credit Check?
When you’re applying for a Larger Business Loan that is greater than $250K it’s possible to offer a preliminary pre-approval to help make the process. We might be able to get this done without a credit verification and within 6 hours of your initial application. This pre-approval is based on an initial evaluation that involves the answer to a series of financial well-being questions. It’s not an offer or guarantee of funds. Unconditional approval is subject to an assessment of your creditworthiness and any offer you receive could have different terms.
The application process
Are I eligible for funding?
You may apply for an company loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and own a New Zealand company (with a valid NZBN/IRD)
- you must prove at least 6 months worth of trade (for you to qualify for unsecured loan $5K – $100K) or 3 years of continuous 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 in few minutes and a dedicated business expert in lending will be in touch to guide you.
To be eligible for up to $100,000, you’ll require proof of identity (valid Driver’s Licence) and a valid NZBN/IRD as well as at least 6 months’ worth of bank statements.
Otherwise, for larger loan sizes, you’ll require:
$100K to $250K: Information about the application including credit consent, 6 – 12 months of bank statements, IRD statement (if you have a loan of more than $150K).
$250K to $500K: Application details including credit consent twelve months of bank statements, IRD statements, last 2 years finalised financial statements, plus interim financial statements for the current year including Aged Payables, Aged Receivables summary.
How soon will I hear a decision?
For an unsecured loan ($5K or more) we can often provide a response in one hour – as long as you make your application during quality business time and allow us to utilise the advanced bank verification system to instantly verify your bank’s information online. If you want to upload copies of your bank statements we can offer an answer within just one company day.
If you are applying for a Larger Business Loan ($100K up to $500,000) we may be capable of provide you with pre-approval conditional to your application in around six hours. Once you have signed the pre-approval, turnaround times are about 2-3 days for final approval, however this could be shorter based on the specifics of each application. Certain agreements have been approved in less than 24 hours.
The quickest way to apply is to ensure you apply during normal company hours, and let us use the modern bank verification link to instantly confirm your bank details online. If you send us duplicates of your banking statements , it will take a little longer.
How fast will I get the cash?
For the Small Business Loan ($5K up to $100,000) We can usually offer an answer in just one hour, provided you apply within standard business hours and you allow us to use the advanced bank verification system to instantly verify your bank details online. If you opt to upload copies of your bank statement, we’ll offer a decision within one business day.
For the Larger Business Loans ($100K or more) we may be able to provide you with pre-approval conditional to your application in about 6 hours. After you’ve signed the pre-approval, the turnaround time is between 2 and 3 days for the final approval. However, this could be shorter based on the particular circumstances of each application. Certain agreements have been approved in less than 24 hours.
The most effective method for you to apply is ensure you apply during normal business hours and allow us to use the modern bank verification to confirm your bank details online. If you decide to upload duplicates of your banking accounts, it will take a little longer.
What’s the minimum amount I can borrow?
We offer loans that range from $5,000 to $500,000. When you submit an application for a certain amount, we take into consideration a range of variables that determine your well-being of your company and the amount of repayments that your company can support. The amount you receive from your loan will be contingent on the particular circumstances the company.
If you apply for a set amount, we consider a variety of aspects to determine the well-being for your company and the amount of repayments that your company is able to afford. The amount you receive from your loan will be determined by the particular circumstances of your company.
Fees & repayments
How much should you charge for the cost of a company loan?
When you apply for business loans with us company loans, we’ll assess the risk assessment of your business and offer an individualised proposal that includes loan amount, term and interest rates. It is a business loan is an upfront priced loan and you’ll be aware in advance of the total amount payable including any charges, interest rates or fees.
What is the factor that determines the price I am charged?
The interest rates on business loans rates differ based on various variables like the amount to be that is borrowed, what business assets the money are used to purchase in addition to the industry that the company is in, how long the company is in operation for, what percentage of the business has enough cash flow to fund the loan, and also the general well-being and creditworthiness of the company.
What are the costs?
There aren’t any hidden costs for our business loans. You’ll be aware of the amount you’ll be required to pay and at what time, from day one. There’s no compounding interest and no additional fees (as long as you are able to make your payments punctually).
We do not charge an Application Fee. You are able to get a cash loan with with no upfront cost or the obligation to take action.
The Origination Fee covers the costs associated with the setting up and management of the loan. The only way to pay this fee if you choose to proceed with the loan. Our Origination Fee is 2.5% of the amount of loan.
Can I repay the loan early?
You may choose to pay back the entire amount of your loan early at any time.
If you do decide to take this route, please speak to our friendly company loans experts. The experts will offer you with details on repayment and an early payment figure. This is calculated as the sum of the principal remaining and the accrued interest up to the time of early payout plus 1.5% of the principal balance and any outstanding fees.
What are the repayment methods?
To help you avoid missing repayments and to fit in your cash flow cycle we provide repayments either weekly or daily. These are automatically deducted from your business account.
Security & privacy
Will my data be secure?
The security of your personal information, as well as knowing the ways we gather information, use it, and exchange it, as well as secure your information, is of huge importance and is an essential part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption protocols to safeguard your sensitive, personal and financial data and our funders are ISO 27001 certified for our dedication to security for our clients and security. We make use of an advanced bank verification system link to immediately verify your bank account information online so we can provide an immediate response.
About business loans
What is asset-based borrowing (a secured loan)?
The term "asset-based" refers to borrowing where the business owner utilises an asset they own to get the funds for a loan. The asset can be an individual asset, such as the family home or a company property like a truck or piece or equipment.
The majority of lenders, including the big banks, tend to secure loans against an asset. If you’re struggling to pay back the loan, your asset may be offered for sale by the lender. In essence it is means of securing additional financing making use of the value of what you already own.
What do I require security for an company loan?
For loans up to $150K it is not necessary to secure assets in advance to gain access to the funds However, we do need the personal guarantee. As long as you follow your loan obligations (as specified in the loan contract) the security of assets will never be needed. For loans of over $150K generally there is the option of a personal ensure and security in the form a charge over assets.