FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Details of The Carabooda Small Business Loans
Let me know more about Carabooda Small Business Loans
Carabooda unsecured loans offers amounts of between $5,000 and $100,000, with terms ranging from 3 and 24 months. They also offer cash flow-friendly repayments that are either per day or weekly.
What is the Unsecured Loan different from an traditional business loan?
The application to this Small Business Loan in under 10 minutes over the phone, receive an instant response and the money could be in your account within 24 hours. Traditional business loans are based on an annual rate of interest along with other charges and fees. The company loan is a loan that is priced upfront and you’ll be aware of the amount you will have to pay, including any interest, fees or charges. This is then broken down into either weekly or daily repayment figure.
What can be the Small Business Loan be used for?
A Small Business Loan can be used for almost every business purpose including cash flow management, business improvements, advertising for purchasing inventory or new equipment, or as general working capital, and much more. The loan is not available for personal purposes.
About larger Carabooda Business Loans
What is the Larger Carabooda Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund company growth opportunities. Loans range between $100,000 and $500,000 for a fixed period of that can last up to 36 months. Repayments are weekly or fortnightly, depending on your situation.
How’s the Origination Fee determined?
This Larger Business Loan has an Origination Fee, determined at 2.5 percent of the loan amount.
Can I get the Larger Business Loan?
To qualify for a loan of this size, your business needs to be operating for at least three years and generate an annual revenue of at least $700,000. The applicant must also be a New Zealand Citizen (or Permanent Resident) over 18 years and have a New Zealand company (with a valid NZBN/IRD) and be able of proving at least 12 months of trading.
How can the funding be used for?
A large business loan is a great option for almost any business reason, such as company renovations, to purchase new equipment or inventory for general working capital, and much more. The loan is not available for personal use.
Is the Larger Business Loan one that is secured?
Asset security is necessary to obtain funding above $150,000. It is usually by way of charge against assets, and could include the registration of this through the PPSR or filing a caveat.
A personal or director’s ensure is a guarantee to pay back a loan that is general in nature, rather than stipulating the security for a particular asset. The person who is signing the ensure is personally liable in the event that the company borrower is unable to make the repayment.
The Personal Property Securities Register (PPSR) is a central, national online register operated by the New Zealand Government. It reflects security interests which are registered with respect to personal property (including the assets or goods). The PPSR gives priority over personal property to be assigned according to the date a security interest has been registered.
A caveat is a legal form of document to provide the public notice of a legal claim on a property.
What is a pre-approval that does not require Credit Check?
If you’re seeking an enterprise loan that is greater than $250,000 we may be able to provide an initial pre-approval in order to make the process. We might be able to do this without a credit check and within 6 hours of your initial application. This pre-approval is based on a preliminary assessment which includes you answering a few financial well-being questions. It’s neither an offer nor a guarantee of financing. Unconditional approval is subject to an extensive credit evaluation and any offer that you might receive could be on 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 at least 18 years old, own a New Zealand business (with a valid NZBN/IRD)
- you must demonstrate at minimum 6 months’ worth of transactions (for you to qualify for unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K or $500K)
How do I apply?
The application process is quick and simple. Complete the online form within a couple minutes, and a dedicated company loan specialist will call you to help you.
To apply for up to $100,000 you’ll require identification details (valid Driver’s License) as well as a valid NZBN/IRD and at least six months of bank statements.
Otherwise, for larger loan sizes, you’ll also need:
$100K to $250K: Information about the application including credit consent, 6 – 12 months of bank statements, IRD statement (if credit is over $150K).
$250K-$500K: Details of the application, including credit consent twelve months of bank records, IRD statements and the last two years’ finalised financial statements, as well as interim financials for the current financial year as well as Aged Payables and Receivables reports.
How quickly will I receive a decision?
For an unsecured loan ($5K to $100K) we typically offer a response in one hour, provided you apply within quality company time and you allow us to use the advanced bank verification system to immediately verify your bank account information online. If you choose to upload copies of your banking statements , we are able to offer the decision in as little as the span of one company day.
If you are applying for a Larger Business Loan ($100K and up) we may be likely to provide you with pre-approval conditional to your application in around six hours. After you’ve signed the pre-approval, turnaround times are approximately 2-3 days to receive final approval. However, this could be shorter based on the specifics of each application. Some offers have been approved within less than 24 hours.
The most efficient method 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 instantly confirm your bank details online. If you choose to send us duplicates of your banking statements it takes a bit longer.
How fast will I get the funds?
For the Small Business Loan ($5K or more) we usually provide an answer in just one hour – provided you submit your request within normal business time and let us use the bank verification system to immediately verify your bank account information online. If you want to upload copies of your bank statements, we will be able to provide a decision in just 1 business day.
For the Larger Business Loans ($100K or more) We may be in a position to offer the conditional pre-approval in about six hours. Once you’ve signed your pre-approval document, you will need to wait between 2 and 3 days for the final approval, however it could be faster based upon the circumstances for each application. Certain offers have been approved in the space of 24 hours.
The most effective method would be to ensure you apply during normal business hours. You can also allow us to use the sophisticated bank verification link to check your bank’s information online. If you send us documents from your account statements it will take a little longer.
What’s the minimum amount I can borrow?
We offer loan amounts between $5,000 to $500,000. When you submit an application for a particular amount, we take into consideration a range of factors in order to assess what is the health of your company and the level of the repayments your business is able to afford. The amount you receive from your loan will be contingent on the specifics that are unique to your company.
When you apply for a set amount, we take into consideration a variety of elements to determine how much we can lend you such as health that is your business and the amount of the repayments your business can afford. The amount you receive from your loan will depend on the specifics of your business.
Fees & repayments
How much should you charge for an company loan?
If you decide to make an application for one of our company financing, we will assess the risk profile of your business and provide an individualised offer, including the amount of the loan, the duration and the interest rates. A company loan is an upfront-priced loan which means you know the exact amount to be paid, including any charges, interest rates or fees.
What determines the rate that I will be charged?
The interest rates on company loans rates differ based on various variables like the amount to be borrowed, the company assets the funds are used to purchase in addition to the industry that the business is in, how long the business has been operating and whether the business has sufficient cash flow to support the loan, and also the overall health and creditworthiness of the business.
What are the charges?
There are no hidden fees for our business loans. You’ll know precisely how much it is that you need to pay, and when, from day one. There’s no compounding interest and there are no additional charges (as as you make your payments punctually).
We don’t charge an application fee. You can request a credit loan no cost upfront or commitment to apply.
The Origination Fee covers the expenses involved with establishing and managing the loan. This is only a fee if you choose to proceed with the loan. Our Origination Fee is 2.5% of the loan amount.
Can I repay the loan earlier?
You can choose to repay all of your loan in full at any time.
If you are deciding to pursue this option, please call our helpful business loans experts. We will provide you with details on repayment and an early payout figure. It will be calculated using the sum of the remaining principal amount plus any accrued interest as of the date of early payout, plus 1.5% of the principal balance and any fees that remain unpaid.
What is the process for repayments?
To ensure you do not miss repayments and to fit in with your cash flow general, we provide repayments either daily or weekly. These are automatically withdrawn from your nominated company account.
Security & privacy
Will my information be secure?
Protecting your information, and knowing the ways we gather, use, exchange and ensure the security of your information is of paramount importance and is an essential element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption protocols to safeguard your sensitive, personal financial and other data. Our funders are ISO 27001 qualified for our dedication to security for our clients and privacy. We make use of an advanced bank verification system that allows you to immediately confirm your bank account information online, allowing us to offer a fast response.
About business loans
What’s an asset-based borrow (a secured loan)?
Asset-based borrowing occurs when the company owner uses assets they own to get the funding. The asset may be a personal asset like the family home or a company property like a truck or piece of equipment.
The majority of lending institutions, even the banks with the biggest size, prefer to secure loans against assets. If you have trouble paying back the loan, the asset could be sold by the lender. In essence, it’s means of securing new financing by using the worth of the asset you already have.
Do I require security to get a business loan?
For loans of up to $150K, there is no requirement for asset security prior to the loan’s access However, we require a personal guarantee. need an individual guarantee. So long as you comply with the terms of your loan (as stated in your loan contract document) the security of assets is not needed. If you take out loans in excess of $150K generally, there is personal guarantee and security in the form of charges on assets.