FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Karawara Small Business Loans
Let me know what you think of the Karawara Small Business Loans
Karawara unsecured loans provides amounts between $5,000 and $100,000, with terms ranging from 3 and 24 month and cash flow friendly repayments that are either daily or weekly.
How is the Unsecured Loan different from the traditional business loan?
The application to your Small Business Loan in under 10 minutes on the internet or over the phone. You’ll get an answer within the same day and have the funds in your account in 24 hours. Traditional business loans reference an interest rate per annum along with other charges and fees. Our business loan is an upfront priced loan so you will be aware in advance of the amount you will have to pay, including any fees, charges or charges. Then, it is divided into a daily or weekly payment amount.
What could be the Small Business Loan be used for?
The Small Business Loan can be used for virtually any business purpose including the management of cash flow, company remodels and marketing to purchase inventory or new equipment, as general working capital, and much more. The loan cannot be used for personal use.
About the Larger Karawara Business Loans
What is the Larger Karawara Business Loan?
The Larger Business Loan is a larger size loan to aid in company growth opportunities. Loans are between $100,000 and $500,000 over a fixed term with a maximum of 36 months. Repayments are scheduled weekly or fortnightly depending on you cashflow.
How is the Origination Fee determined?
It is important to note that the Larger Business Loan has an Origination Fee, determined at 2.5% of the loan amount.
Can I get the Larger Business Loan?
To be eligible for a credit in this amount the company needs to be operating for a minimum of 3 years, and have an annual income of at least $700,000. Your company must belong to a New Zealand Citizen (or Permanent Resident) at least 18 years old and have a New Zealand business (with a valid NZBN/IRD) and be able demonstrate at minimum 12 months of continuous trading.
How can the funding be utilised?
A Business Loan of a larger size can be used for nearly any company purpose including business improvements, purchasing equipment or inventory or as general working capital and so much more. The loan cannot be used for personal purposes.
Is the Larger Business Loan one that is secured?
Asset security is needed to access funding over $150,000. This can be done in the form of a charge on assets, which could also include registration in the PPSR or making a caveat.
A director’s or personal ensure is a commitment to repay a loan which is generally in nature rather than stating the security of a specific asset. The person who is signing the guarantee is personally accountable if the company lender is not able to pay back the debt.
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 registered in respect of personal property (including objects or assets). The PPSR allows the priority of personal property assigned according to the date a security interest has been registered.
The caveat can be described as a formal document lodged to provide the public notice of a legal claim on a property.
What is a pre-approval minus Credit Check?
If you’re seeking a Larger Business Loan that is greater than $250K, we may offer an initial pre-approval to smooth out the process. It is possible to make this decision without credit checks and within six hours of your initial application. This pre-approval is based on an initial assessment, which involves you answering some financial well-being checks. This is neither an offer nor a guarantee of credit. A conditional approval is subject an extensive credit evaluation and any offer you receive could be subject to different conditions.
The application process
Do I have the right to receive funds?
You may apply for a business loan if you;
- are a New Zealand Citizen (or Permanent Resident)
- are 18 years or older, own a New Zealand company (with a valid NZBN/IRD)
- you must prove at least 6 months worth of trade (for the unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K to $500K)
How do I apply?
The process for applying is fast and simple. Just complete the online application in just a few minutes, and a dedicated business expert in lending will contact you to guide you through the process.
To apply for up to $100,000 you’ll need proof of identity (valid Driver’s License) as well as an active NZBN/IRD, and at least six months of bank statements.
In addition, for larger loan sizes, you’ll require:
$100K – $250K: Information about the application including credit consent, 6 – 12 months of IRD statements, bank statements (if loan above $150K).
$250K to $500K: Details of the application, including credit consent and 12 months bank statement, an IRD statement and the last two years’ finalised financial statements, in addition to interim current financial year financials as well as Aged Payables and Receivables summary.
How fast will I get a decision?
For an unsecured loan ($5K up to $100,000) We can usually offer a response in one hour – as long as you make your application during standard business time and permit us to make use of the advanced bank verification system link to instantly verify your bank’s information online. If you want to submit copies of your bank statement, we’ll offer the decision in as little as an company day.
For the Larger Business Loan ($100K to $500K) we might be in a position to provide you with a conditional pre-approval within about six hours. Once you have signed the pre-approval, turnaround times are around 2-3 days for final approval. However, this can be quicker based upon the circumstances for each application. Some agreements have been approved within just 24 hours.
The quickest way to apply would be to make sure you apply during normal company hours and permit us to use the advance bank verification to verify your bank information online. If you upload duplicates of your banking statements it will take a little longer.
How quickly will I receive the cash?
For the Small Business Loan ($5K and up) we usually offer an answer in just one hour, provided you submit your request in normal business hours and allow us to use the advanced bank verification system link to immediately verify your bank account information online. If you opt to upload copies of your bank statement, we’ll offer the decision in as little as 1 business day.
If you are applying for Larger Business Loans ($100K or more) we might be likely to provide you with pre-approval conditional to your application within about six hours. Once you have 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 circumstances of each application. Some deals have been approved in the space of 24 hours.
The fastest method can be ensure you apply during standard business hours. Also, permit us to use the modern bank verification link to instantly check your bank’s information online. If you send us the copies of bank statements, it will take a little longer.
How much can I borrow?
We offer loans ranging from $5,000 to $500,000. If you apply for a particular amount, we take into consideration a range of aspects to determine how much we can lend you well-being of the company and the level of payments your company can support. The total amount of the loan will be determined by the specifics of your company.
If you apply for a certain amount, we look at a range of variables to determine the health of the company and the amount of repayments that your business will be able to support. The amount you receive from your loan will depend on the specifics for your company.
Fees & repayments
What is the cost for the cost of a business loan?
When you request one of our company financing, we’ll assess the risk assessment the company and offer an individualised proposal that includes the amount of loan, the term and the interest rates. This company loan is a loan that is priced upfront so you will know in advance the total amount to be paid, including any charges or interest.
What is the factor that determines the price I pay?
The interest rates on company loans rates differ based on various variables like the amount to be borrowed, the company assets the money are used to purchase as well as the field the company operates in, how long the business is in operation and whether the company has enough cash flow to cover the loan, as well as the overall health and creditworthiness of the company.
What are the fees?
There are no hidden costs with our business loans. You’ll know precisely how much you be required to pay and at what time, from the first day. There’s not any compounding interest and no additional fees (as as long as you pay your payments on time).
We don’t charge an application fee. You are able to make an application for loans with no cost upfront or 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 cost if you take out the loan. The Origination Fee for us is 2.5% of the amount of loan.
Can I repay the loan in advance?
You may choose to pay back the total amount of your loan early at any time.
If you choose to do this please speak to our friendly business loan specialists. They will offer you with the details of your repayment and an early payment figure. This is calculated as the sum of the principal amount remaining and accrued interest to the time of early payout, plus 1.5% of the principal amount remaining as well as any outstanding fees.
How do you make repayments work?
To help you avoid missing repayments and to fit in your cash flow cycle we offer repayments that are either daily or weekly. These are automatically withdrawn from your designated business account.
Security & privacy
Will my information be protected?
The security of your personal information, as well as making it clear the ways we gather the information we collect, use, share and secure your information, is of paramount importance and an integral aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption protocols to safeguard your sensitive, personal financial and other data. Our funders are ISO 27001 qualified for our dedication to the security of our clients as well as their security. We use an advanced bank verification system to immediately verify your bank account information online so we can provide rapid response.
About business loans
What is asset-based borrowing (a secured loan)?
An asset-based loan is when an business owner makes use of the assets they have to get a loan. The asset can be an individual asset, such as the family home or a company asset such as a truck or piece of equipment.
The vast majority of lenders, including the banks with the biggest size, prefer to secure loans against assets. If you’re having trouble paying back the loan, then the asset might be sold by the lender. In essence, it’s means of securing new financing taking advantage of the value of what you already own.
Do I require security for a business loan?
Up to $150K in loans the requirement for asset security is not required in advance to gain access to the funds However, we require a personal guarantee. need a personal guarantee. As long as you follow your loan obligations (as stated in your loan contract) the security of assets will never be required. For loans over $150K typically, you will need a personal guarantee and security in the form of the charge of assets.