FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Carabooda Small Business Loans
Let me know about the Carabooda Small Business Loans
Carabooda unsecured loans provides amounts of between $5,000 and $100,000. The terms range between 3 and 24 months and cash flow friendly repayments that are either daily or weekly.
What makes the Unsecured Loan different from the traditional business loan?
It is imaginable to apply to your Small Business Loan in under 10 minutes on the phone. You’ll receive a same day response and the money could be on your account within 24 hours. Traditional business loans are based on an interest rate per annum along with other charges and fees. We offer a business loan is a cash-based loan therefore you’ll be aware in advance of the amount you will have to pay, including the interest, fees and charges. This is then broken down into either weekly or daily installment amount.
What can be the Small Business Loan be used for?
It is a Small Business Loan can be used for virtually any company purpose including cash flow management, business remodels and marketing to purchase inventory, new equipment, for general working capital and so much more. The loan is not available for personal use.
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 business growth opportunities. The loan ranges from $100,000 to $500,000 for a fixed period of up to 36 months. Repayments are scheduled weekly or fortnightly, depending on you cashflow.
How’s the Origination Fee calculated?
The Larger Business Loan has an Origination Fee that is determined at 2.5 percent of the loan amount.
Am I eligible for the Larger Business Loan?
To qualify for a loan that is this large the business needs to be operating for at least three years, and have an annual income of at least $700,000. The applicant must also be a New Zealand Citizen (or Permanent Resident) who is over the age of 18 as well as own a New Zealand company (with a valid NZBN/IRD) and be able to prove at minimum 12 months of continuous trading.
How can the funding be utilised?
A large company loan can be used for almost all company reason, such as company improvements, purchasing inventory or new equipment as well as for general working capital and much more. The loan is not available for personal reasons.
Is the Larger Business Loan a secured loan?
Asset security is necessary for funding of more than $150,000. It is usually by way of charge over assets, and could include the registration of this on the PPSR or the registration of a caveat.
A director’s or personal guarantee is a guarantee to pay off a credit line that is general in nature, rather than specifying security over a particular asset. The person who signs the guarantee is personally liable in the event that the company lender is not able to repay the debt.
The Personal Property Securities Register (PPSR) is an online, central register operated by the New Zealand Government. It records security interests that have been registered in respect of personal property (including goods or assets). The PPSR grants prioritisation over property that is personal to be assigned according to the date the registration of a security interest.
Caveats are legal document lodged to provide notice of a legal claim against a property.
What is a pre-approval that does not require Credit Check?
When you’re applying for an enterprise loan of more than $250,000, we may offer a preliminary pre-approval to help ease the process. We may be able to apply for this without a credit verification and within 6 hours of your initial application. This pre-approval is based on an initial assessment, which involves you answering a few financial well-being checks. It is in no way an offer, nor is it a guarantee of financing. Unconditional approval is subject to an exhaustive credit evaluation, and any offer you might receive could be based on different conditions.
Application process
Can I be eligible for funding?
You may apply for a company loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are over 18 years, own a New Zealand business (with a valid NZBN/IRD)
- you must demonstrate at minimum 6 months of trading (for you to qualify for unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The application process is quick and easy. Just complete the online application within a few minutes and a dedicated business credit specialist will contact you to guide you through the process.
To be eligible for up to $100,000, you’ll need proof of identity (valid Driver’s Licence) as well as an active NZBN/IRD, and at least 6 months’ worth of bank statements.
Otherwise, for larger loan sizes, you’ll need:
$100K – $250K: Information about the application including credit approval, 6-12 months of IRD statements, bank statements (if credit is over $150K).
$250K to $500K: Information on the application including credit consent, 12 months of bank statements, IRD statements and the last two years’ finalised financial statements, and interim financials from the current financial year including Aged Payables, Aged Receivables summaries.
How fast will I get an answer?
For an unsecured loan ($5K up to $100,000) we can often provide an answer in just one hour, provided you submit your request during quality business times and let us utilise the bank verification system to instantly verify your bank details online. If you choose to upload copies of your banking statements , we’ll be able to offer an answer in just an company day.
For Larger Business Loans ($100K or more) we could be able to offer you with pre-approval conditional to your application in about six hours. After you’ve signed the pre-approval form, it will take about 2-3 days for final approval. However, this may be quicker depending upon the circumstances for each application. Some deals have been approved within less than 24 hours.
The most effective method would be to ensure you apply during standard company hours. Also, permit us to use the advance bank verification link to confirm your bank details online. If you choose to upload copies of your bank accounts, it may take a bit longer.
How fast will I get the money?
For the Small Business Loan ($5K to $100K) we typically offer a response in one hour, provided you make your application during standard business time and let us use the bank verification system link to immediately verify your bank account information online. If you decide to upload copies of your banking statements, we are able to offer a decision in as little as 1 business day.
For the Larger Business Loans ($100K and up) we could be able to provide you with conditional pre-approval within 6 hours. Once you’ve signed the pre-approval, turnaround times are between 2 and 3 days for the final approval. However, it could be faster based on the circumstances of each application. Certain offers have been approved within less than 24 hours.
The quickest method for you to apply is make sure you apply during standard business hours, and allow us to use the advance bank verification link to check your bank’s information online. If you choose to send us documents from your account accounts, it can take a bit longer.
What is the maximum amount I can borrow?
We provide loans ranging from $5,000 to $500,000. If you apply for a certain amount we will consider a number of factors for determining how much we can lend you health of your business and the amount of repayments your company can afford. The total amount of the loan will be determined by the specifics of your company.
When you make an application for a certain amount, we consider a variety of aspects to determine the health of the company and the amount of repayments your company can afford. The amount you receive from your loan will be contingent on the particulars of your company.
Fees & repayments
What is the cost for an business loan?
When you request the business financing, we will assess the risk profile for your business and provide you with a customised offer including the loan amount, the terms and interest rates. The business loan is a loan that is priced upfront therefore you will know the exact amount you will have to pay, including charges or interest.
What is the factor that determines the price I will be charged?
Interest rates for business loans rates depend on a variety of factors including the amount borrowed, the company assets the money are used to purchase and the sector the business is in, how long the business has been in operation, in the event that the company has enough cash flow to cover the loan, and also the general health and creditworthiness of the company.
What are the costs?
There aren’t any hidden charges for our company loans. You’ll know exactly how much you’ll need to pay and when, from the day you sign up. There’s not any compounding interest and no extra fees (as as you make your payments on time).
We don’t charge an Application Fee. You are able to apply for a loan absolutely no upfront cost and no commitment to apply.
The Origination Fee covers the costs associated with establishing and managing the loan. It is only charged for this fee if you choose to proceed with the loan. The Origination Fee for us is 2.5 percentage of the amount of loan.
Can I pay off the loan in advance?
You can choose to repay all of your loan early at any time.
If you do decide to do this please talk to one of our helpful business credit specialists. They will offer you with repayment details along with an early payout estimate. It will be calculated using the total of the principal balance and the accrued interest up to the time of early payment plus 1.5% of the principal remaining and any outstanding fees.
How do repayments work?
To ensure you do not miss payments and to work your cash flow schedule, we offer repayments that are either daily or weekly. They are automatically deducted from your designated business account.
Security & privacy
Will my information be protected?
Making sure that your information is secure, and being transparent about how we collect the information we collect, use, share and safeguard your data, is of paramount importance and is a crucial element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption standards to secure your personal, sensitive as well as financial data. Our funders are ISO 27001 qualified for our dedication to customer security and security. We make use of an advanced banking verification system to instantly verify your bank account information online to provide a fast response.
About business loans
What exactly is an asset-based loan (a secured loan)?
An asset-based loan is when the company owner uses an asset that they own to get the loan. The asset can be either an individual asset, such as the family home, or a business property like a truck or piece of equipment.
The vast majority of lending institutions, not just the largest banks, are inclined to secure loans against an asset. If you’re having trouble paying back the loan, then the asset could be offered for sale by the lender. In essence, it’s a way of securing additional financing taking advantage of the value of what you already have.
Do I need security to get a business loan?
For loans of up to $150K, no asset security is required in advance to gain access to the funds but we do require an individual guarantee. As long as you follow your loan commitments (as detailed in your loan contract) Asset security is not required. If you take out loans in excess of $150,000 generally, you can get a personal guarantee and security is provided in the form of charges on assets.