FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Karawara Small Business Loans
Tell me about the Karawara Small Business Loans
Karawara unsecured loans offers amounts of between $5,000 and $100,000. The terms range between 3 and 24 months and cash flow friendly repayments which can be made daily or weekly.
How is how is the Unsecured Loan different from an ordinary company loan?
The application to the Small Business Loan in under 10 minutes via the internet or by phone. You will receive an immediate response, and the funds could be available in just 24 hours. Traditional business loans have an annual interest rate plus other fees and charges. The company loan is a pre-paid loan therefore you’ll know in advance the total amount due, which includes any fees, interest or charges. This is then broken down into either a daily or weekly installment amount.
What can you use the Small Business Loan be used for?
It is a Small Business Loan can be used for nearly every company purpose including cash flow management, company improvements, advertising to purchase inventory, new equipment, or as general working capital and so much more. The loan is not available for personal use.
Concerning Larger Karawara Business Loans
What is the Larger Karawara Business Loan?
The Larger Business Loan is a larger amount of loan to help business growth opportunities. The loan ranges from $100,000 to $500,000 for a fixed period of that can last up to 36 months. The repayments are made weekly or fortnightly, depending on the flow of cash.
How’s the Origination Fee determined?
The Larger Business Loan has an Origination Fee which is calculated at 2.5% of the loan amount.
Can I get the Larger Business Loan?
To be eligible for a credit of this size, your company needs to be operating for at least three years and generate an annual revenue of $700K. It is necessary to be a New Zealand Citizen (or Permanent Resident) at least 18 years old as well as own a New Zealand business (with a valid NZBN/IRD) and be able to prove at least 12 months of trading.
What can I use the funds for?
A larger company loan can be used to fund almost any business reason, such as company improvements, purchasing inventory or new equipment for general working capital, and much more. The loan is not available for personal reasons.
Is the Larger Business Loan one that requires security?
Asset security is necessary to obtain funding above $150,000. This can be done by taking a charge against assets, which could also include registering this in the PPSR or making as a caveat.
A director’s or personal guarantee is a commitment to pay back a loan that is generally in nature rather than stating the security of a specific asset. The person who signs the guarantee is personally responsible if the company creditor is unable to make the repayment.
The Personal Property Securities Register (PPSR) is an online, central register run by the New Zealand Government. It contains security interests granted to individuals who own personal property (including the assets or goods). The PPSR allows priority over personal property to be assigned according to the date the registration of a security interest.
A caveat is a legal document that is filed to offer the legal claim to property.
What is a pre-approval without Credit Check?
If you’re seeking an enterprise loan that exceeds $250,000 we may be able to provide a preliminary pre-approval to help simplify the process. We might be able to apply for this without a credit check, and within 6 hours of the initial application. The pre-approval process is based on an initial evaluation that involves answering a couple of financial well-being checks. This is not an offer or guarantee of funds. A conditional approval is subject an exhaustive credit evaluation, and any offer you receive could have different terms.
The application process
Do I have the right to receive funds?
You are eligible to apply for an company loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are 18 years or older, own a New Zealand business (with a valid NZBN/IRD)
- you must prove at least 6 months worth of trade (for for the unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K - $500K)
How do I apply?
The application process is quick and simple. Just complete the online application in few minutes and a dedicated business loan specialist will be in touch to assist you.
To be eligible for up to $100,000 you’ll require proof of identity (valid Driver’s License) and an active NZBN/IRD, and at least six months of bank statements.
Otherwise, for larger loan sizes, you’ll also need:
$100K to $250K: Details of application, including credit approval, 6-12 months of bank statements, IRD statement (if credit is over $150K).
$250K – $500K: Application details including credit consent as well as 12 months bank statement, an IRD statements 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.
What speed will I be able to get a decision?
For an unsecured loan ($5K and up) we typically offer a response in one hour if you submit your request during quality company times and you allow us to utilise the bank verification system to instantly verify your bank details online. If you want to submit copies of your bank statements , we are able to provide an answer within the span of one business day.
If you are applying for a Larger Business Loan ($100K or more) we could be capable of provide you with pre-approval conditional to your application in about 6 hours. Once you have signed the pre-approval form, it will take approximately 2-3 days to receive final approval. However, this can be quicker based on the specifics of each application. Certain offers have been approved in 24 hours.
The quickest way to apply is to make sure you apply during normal business hours. Also, allow us to use our modern bank verification link to verify your bank information online. If you send us copies of your bank statement, it will take a little longer.
What is the time frame to receive the money?
For the Small Business Loan ($5K or more) we typically offer an answer within one hour, provided you apply during normal business timings and allow us to use the bank verification system to instantly verify your bank information online. If you decide to submit copies of your bank statement, we’ll offer an answer in just the span of one business day.
For Larger Business Loans ($100K up to $500,000) We may be likely to provide you with conditional pre-approval in about six hours. After you’ve signed the pre-approval form, it will take about 2-3 days for final approval, however this can be faster depending on the particular circumstances of each application. Some offers have been approved in 24 hours.
The most effective method for you to apply is make sure you apply during standard business hours and permit us to use the sophisticated bank verification link to verify your bank information online. If you opt to upload the copies of bank statement, it may take a bit longer.
What is the maximum amount I can borrow?
We provide loan amounts between $5,000 and $500,000. If you apply for a certain amount we will consider a number of elements for determining what is the well-being for your business as well as the amount of the repayments your company can support. The amount you receive from your loan will depend on the specific circumstances that are unique to your company.
When you apply for a certain amount, we consider a variety of aspects to determine the well-being for your business and the amount of payments 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 the cost of a business loan?
When you make an application for our company financing, we will assess the risk profile of your company and provide you with a customised offer, including loan amount, term and the interest rates. This company loan is an upfront cost loan and you’ll know in advance the total amount payable including any interest rates, fees or charges.
What determines the amount I’m charged?
The interest rates on business loans rates depend on several factors including the amount of money borrowed, the business assets the funds will be used for, the industry the business operates in, how long the company has been operating, how long the business has enough cash flow to support the loan, as well as the general well-being and creditworthiness of the business.
What are the cost?
There aren’t any hidden charges with our company loans, and you’ll know precisely how much you’ll need to pay, and at what time, from the very first day. There’s not any compounding interest and no extra fees (as long as you are able to make your payments in time).
We do not charge an Application Fee. You are able to apply for a loan with without any upfront costs or any obligation to sign up.
The Origination Fee covers the costs associated with setting up and managing the loan. This is only a fee if you proceed with the loan. The Origination Fee for us is 2.5% of the amount of the loan.
Can I repay the loan early?
You may choose to pay back all of your advance loan at any time.
If you choose to do this please call our helpful business lending specialists. They’ll provide you with details on repayment as well as an early payout amount. This is calculated as the total of the principal balance plus any accrued interest as of the time of early payout plus 1.5 percent of the principal balance and any fees that remain unpaid.
What are the repayment methods?
To help you avoid missing payment dates and to align your cash flow cycle we offer repayments that are either weekly or daily. These are automatically withdrawn from your designated company account.
Security & privacy
Will my information be protected?
Protecting your information, and knowing how we collect information, use it, and exchange it, as well as ensure the security of your information is of huge importance and an integral part 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 personal, sensitive financial information and our funders are ISO 27001 certified for our commitment to protecting the security of clients and privacy. We utilise a sophisticated bank verification system link to instantly verify your bank account details online, allowing us to provide a fast response.
About business loans
What is asset-based borrowing (a secured loan)?
Asset-based borrowing occurs when an company owner borrows from the assets they have to obtain the funds for a loan. The asset can be either a personal asset like the family home, or it could be a business property like a truck or other piece of machinery.
The majority of lenders, including the big banks, tend to guarantee loans against an asset. If you’re struggling to pay back the loan, your assets could be sold by the lender. In essence it is the process of securing new financing by using the value of what you already have.
What do I need security to get a business loan?
For loans up to $150,000 no asset security is required in advance to gain access to the funds but we require a personal guarantee. need the personal guarantee. So long as you comply with the terms of your loan (as detailed in your loan contract) Asset security will never be needed. For loans over $150,000 generally there is the option of a personal guarantee and security in the form of charges on assets.