FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Details of The Redbank Small Business Loans
Tell me what you think of the Redbank Small Business Loans
Redbank unsecured loans offers amounts between $5,000 and $100,000, with terms ranging from 3 and 24 months and cash flow friendly repayments that are either daily or weekly.
How is this Unsecured Loan different from a traditional company loan?
It is possible to apply for your Small Business Loan in under 10 minutes on the internet or over the phone, receive a same day response and have the funds in your account within 24 hours. Traditional business loans reference an interest rate per annum plus other fees and charges. Our business loan is a cash-based loan so you will be aware of the total amount to be paid, including any fees, interest or charges. Then, it is divided into a daily or weekly amount to be paid back.
What can the Small Business Loan be used for?
A Small Business Loan can be used to fulfill almost every company use, including cash flow management, business renovations, marketing to purchase inventory, new equipment, as general working capital and much more. The loan cannot be used for personal purposes.
Concerning Larger Redbank Business Loans
What is the Larger Redbank Business Loan?
The Larger Business Loan is a larger loan size to support business growth opportunities. The loan ranges from $100,000 to $500,000 over a fixed term for up to 36 months. Repayments are weekly or fortnightly in order to accommodate the flow of cash.
How’s the Origination Fee determined?
A Larger Business Loan has an Origination Fee, which is calculated at 2.5 percentage of the amount of the loan.
Am I eligible for the Larger Business Loan?
To qualify for a loan of this size the business needs to have been in operation for at least 3 years and have an annual turnover of $700,000. You must 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 minimum 12 months of business.
What can the funding be used for?
A larger company loan can be used for almost any business purpose including company remodeling, buying inventory or new equipment, as general working capital and so much more. The loan is not available for personal purposes.
Is the Larger Business Loan a secured loan?
Asset security is necessary for funding of more than $150,000. This can be done by way of charge on assets, which could also include registering this through the PPSR or making as a caveat.
A personal or director’s guarantee is a commitment to pay back a loan that is generally based rather than specifying security over an asset. The person who signs the guarantee is personally responsible if the company borrower is unable to repay the debt.
The Personal Property Securities Register (PPSR) is a central, national online register run by the New Zealand Government. It reflects security interests granted to individuals who own personal property (including items or assets). The PPSR permits preference over private property granted in accordance with the date on which a registration of a security interest.
An affidavit is an official document lodged to offer notice of a legal claim against a property.
What is a pre-approval minus Credit Check?
When you’re applying for a Larger Business Loan that is greater than $250,000 it’s possible to offer an initial pre-approval that will help make the process. It is possible to make this decision without a credit verification and within 6 hours of the initial application. This pre-approval is made based on an initial assessment that includes the answer to a series of financial well-being questions. This is not an offer or guarantee of financing. Unconditional approval is subject to an extensive credit evaluation and any offer that you receive could be subject to different terms.
The application process
Do I qualify for 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 company (with a valid NZBN/IRD)
- must show at least six months of business (for a 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 simple and simple. Just fill out the online application within a few minutes and a dedicated business expert in lending will call you to guide you through the process.
To apply for up to $100,000, you’ll require ID details (valid Driver’s License), a valid NZBN/IRD as well as at least six months of bank statements.
If you’re looking for loans with larger sizes, you’ll require:
$100K to $250K: Application details including credit consent, 6 – 12 months of bank statements, IRD statement (if loan above $150K).
$250K-$500K: Application details including credit consent twelve month bank accounts, the IRD statement and the last two years’ finalised financial statements, as well as interim financial statements for the current year as well as Aged Payables and Receivables summary.
How fast will I get a decision?
For an unsecured loan ($5K and up) we typically provide an answer within an hour, provided you apply in standard company time and let us utilise the bank verification system to instantly verify your bank’s information online. If you want to submit copies of your bank statements , we are able to provide an answer in just an company day.
For the Larger Business Loan ($100K to $500K) we may be likely to offer the conditional pre-approval within about six hours. Once you have signed the pre-approval document, you will need to wait between 2 and 3 days for the final approval. However, this can be quicker based on the circumstances of each application. Certain deals have been approved within 24 hours.
The most efficient method can be make sure you apply during standard business hours. Also, allow us to use the modern bank verification link to instantly verify your bank information online. If you send us duplicates of your banking statement, it takes a bit longer.
What is the time frame to receive the cash?
For the Small Business Loan ($5K and up) we usually offer an answer within one hour, provided you apply at standard business time and allow us to make use of the advanced bank verification system to immediately verify your bank account information online. If you want to upload copies of your bank statements, we’ll be able to offer the decision within the span of one business day.
For Larger Business Loans ($100K to $500K) we may be able to provide you with a conditional pre-approval within six hours. After you’ve signed the pre-approval, the turnaround time is around 2-3 days for final approval, however this could be shorter based upon the circumstances for each application. Some deals have been approved in 24 hours.
The most efficient method is to ensure you apply during normal business hours and allow us to use our sophisticated bank verification to check your bank’s information online. If you decide to send us the copies of bank statements it can take a bit longer.
How much can I borrow?
We provide loan amounts between $5,000 and $500,000. If you apply for a specific amount we consider a variety of factors for determining your health of your business as well as the amount of the repayments your business can support. The total amount of your loan will be contingent on the specifics of your company.
If you apply for a specific amount we will consider a number of factors to determine the health for your business and the extent of repayments your company will be able to support. The amount you receive from the loan will be determined by the specifics the business.
Fees & repayments
How much do you charge for the cost of a company loan?
When you apply for the business loans, we’ll assess the risk assessment of your business and provide you with a customised offer, including the amount of the loan, the duration and interest rates. This business loan is an upfront cost loan so you will be aware of the total amount payable including any interest rates, fees or charges.
What is the basis for the rate I’m charged?
The interest rates on company loans rates vary due to factors such as the amount that is borrowed, the company assets the funds are used to purchase, the industry the business operates in, the long the business has been operating as well as what percentage of the business has sufficient cash flow to pay for the loan, and also the overall well-being as well as creditworthiness business.
What are the cost?
There aren’t any hidden charges for our business loans. You’ll know precisely what you need to pay and at what time, from the day you sign up. There’s no compounding and no extra fees (as long as you make your payments on time).
We don’t charge an Application Fee. You are able to request a credit loan with absolutely no upfront cost and no any obligation to sign up.
The Origination Fee includes the expenses associated with setting up and managing the loan. It is only charged for this fee if you proceed with the loan. Our Origination Fee is 2.5 percentage of the amount of the loan.
Can I pay off the loan early?
You may choose to pay back the total amount of your loan at any point in time.
If you are deciding to take this route, please speak to our friendly business lending specialists. We will provide you with repayment details along with an early payout estimate. This is calculated as the sum of the principal amount remaining plus any accrued interest as of the date of early payout plus 1.5% of the principal amount remaining as well as any outstanding fees.
How do repayments work?
To help you avoid missing payments and to work your cash flow schedule, we offer repayments that are either weekly or daily. These are automatically withdrawn from your company account.
Security & privacy
Will my information be secure?
Making sure that your information is secure, and making it clear the ways we gather information, use it, and exchange it, as well as safeguard your data, 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 make use of industry-standard encryption standards to protect your sensitive, personal financial information and our funders are ISO 27001 certified for our dedication to the security of our customers as well as their privacy. We use an advanced bank verification system link to instantly verify the bank account details online to offer quick responses.
About business loans
What’s an asset-based borrow (a secured loan)?
Asset-based borrowing is when the business owner borrows from an asset that they own to obtain the loan. The asset can be either an individual asset, such as the family home, or it could be a company asset such as a vehicle as well as a piece of machine.
The vast majority of the lenders including the major banks, prefer to secure loans against an asset. If you have trouble paying back the loan then the asset could be offered for sale by the lender. In essence it is a way of securing new financing using the value of what you already have.
Should I need security to get an company loan?
For loans of up to $150K, it is not necessary to secure assets before you are able to access the money however, we require a personal guarantee. require the personal guarantee. As long as you follow your loan commitments (as stipulated in the loan contract) the security of assets is not needed. For loans of over $150K typically, you will need an individual ensure and security is provided in the form of charges on assets.