FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
More about the Karrakatta Small Business Loans
Let me know about the Karrakatta Small Business Loans
Karrakatta unsecured loans offers amounts of between $5,000 and $100,000, with terms ranging from 3 and 24 months and cash flow-friendly repayments which can be made daily or weekly.
What is what makes the Unsecured Loan different from a traditional company loan?
You can apply for this Small Business Loan in under 10 minutes by phone. You will receive an answer within the same day and the money could be on your account within 24 hours. Traditional business loans are based on an annual interest rate together with additional fees and charges. The business loan is an upfront priced loan which means you be aware of the total amount to be paid, including any fees, charges or charges. This is then broken down into either weekly or daily repayment figure.
What can the Small Business Loan be used for?
The Small Business Loan can be used for almost every business purpose including the management of cash flow, company renovations, marketing for purchasing inventory or new equipment, for general working capital, and much more. The loan is not available for personal use.
About the Larger Karrakatta Business Loans
What is the Larger Karrakatta Business Loan?
The Larger Business Loan is a larger amount of loan to help company expansion opportunities. Loans range between $100,000 and $500,000 with a term fixed with a maximum of 36 months. Repayments are weekly or fortnightly, depending on your situation.
How is the Origination Fee determined?
A Larger Business Loan has an Origination Fee which is determined at 2.5 percentage of the amount of the loan.
Am I eligible for the Larger Business Loan?
To be eligible for a loan in this amount the business needs to be operating for at least three years and have an annual turnover of $700K. You must be a New Zealand Citizen (or Permanent Resident) over 18 years and have a New Zealand business (with a valid NZBN/IRD) and be able of proving at the least 12 months of operating.
What can I use the funding for?
A larger business loan is a great option for almost any business use, including company remodeling, buying equipment or inventory as well as for general working capital and so much more. The loan is not available for personal use.
Is the Larger Business Loan one that requires security?
Asset security is necessary for funding of more than $150,000. It’s in the form of a charge on assets, and could include registering this through the PPSR or making a caveat.
A director’s or personal guarantee is a guarantee to repay a loan which is general in nature rather than specifying security over a particular asset. The person signing the ensure is personally liable in the event that the business lender is not able to repay the debt.
The Personal Property Securities Register (PPSR) is a central, national online registry run by the New Zealand Government. It lists security interests that are registered in respect of personal property (including the assets or goods). The PPSR gives priority over personal property to be assigned depending on the date that a security interest that is registered.
A caveat is a legal form of document to offer the public notice of a legal claim to a property.
What exactly is a preapproval without Credit Check?
If you’re requesting a Larger Business Loan that exceeds $250K we can offer a preliminary pre-approval to help make the process. We might be able to apply for this without a credit check, and within 6 hours of your initial application. The pre-approval is based upon an initial assessment that includes you answering a few financial well-being checks. It is not an offer or guarantee of credit. Unconditional approval is subject to a full credit assessment and any offer you receive could be subject to different terms.
The application process
Are I eligible for funding?
You may apply for a 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 demonstrate at minimum 6 months of business (for you to qualify for unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K or $500K)
How do I apply?
The application process is quick and simple. Simply complete the online form within a few minutes and an experienced business lending specialist will be in touch to help you.
To be eligible for up to $100,000, you’ll require ID details (valid Driver’s Licence), a valid NZBN/IRD and at least 6 months of bank statements.
If you’re looking for loans with larger sizes, you’ll need:
$100K – $250K: Details of application, including credit approval, 6-12 months of IRD statements, bank statements (if credit is over $150K).
$250K – $500K: Information on the application including credit consent, 12 months of bank statements, IRD statement and the last two years’ finalised financial statements, in addition to interim current financial year financials, Aged Payables and Aged Receivables reports.
How fast will I get an answer?
For an unsecured loan ($5K or more) we typically provide an answer within an hour if you submit your request at quality business times and permit us to utilise the bank verification system link to instantly verify your bank’s information online. If you choose to send us copies of your bank statements , we are able to offer a decision within an company day.
For the Larger Business Loan ($100K and up) we may be in a position to provide you with a conditional pre-approval within 6 hours. After you’ve signed your pre-approval, turnaround times are between 2 and 3 days for the final approval, however this can be quicker based upon the circumstances for each application. Certain agreements have been approved within the space of 24 hours.
The quickest way to apply is to ensure you apply during standard company hours. You can also allow us to use our modern bank verification link to check your bank’s information online. If you opt to send us the copies of bank accounts, it can take a bit longer.
How quickly will I receive the funds?
For the Small Business Loan ($5K to $100K) We can usually offer an answer in just one hour, provided you submit your request at normal business times and allow us to use the advanced bank verification system link to instantly verify your bank’s information online. If you want to upload copies of your banking statements, we will be able to provide the decision in just one business day.
If you are applying for Larger Business Loans ($100K and up) we could be capable of provide you with conditional pre-approval in around six hours. After you’ve signed the pre-approval form, it will take between 2 and 3 days for the final approval, however it could be faster based on the circumstances of each application. Certain transactions have received approval within just 24 hours.
The fastest way can be make sure you apply during normal business hours, and allow us to use the modern bank verification link to instantly verify your bank information online. If you opt to upload duplicates of your banking statements it takes a bit longer.
What is the maximum amount I can borrow?
We offer loan amounts between $5,000 to $500,000. If you apply for a certain amount, we will consider a number of elements to determine what is the well-being of the business and the level of the repayments your company is able to afford. The total amount of your loan will depend on the specific circumstances the business.
If you apply for a particular amount, we look at a range of factors to determine your well-being that is your business as well as the amount of payments your business will be able to support. The amount you receive from your loan will be contingent on the specifics that are unique to your company.
Fees & repayments
What is the cost for the cost of a company loan?
When you make an application for the company loan, we’ll assess the risk assessment for your business and provide you with a tailored proposal that includes loan amount, term and the interest rates. It is a company loan is an upfront-priced loan so you will be aware in advance of the total amount payable including any costs, fees, or interest rates.
What determines the rate that I pay?
Interest rates for business loans rates depend on several factors such as the amount that is that is borrowed, what company assets the money are used to purchase, the industry the company is in, how long the business has been running and what percentage of the company has enough cash flow to cover the loan, and general well-being or creditworthiness of the business.
What are the fees?
There aren’t any hidden costs with our business loans, and you’ll know precisely how much you need to pay, and when, from day one. There’s no compounding interest and no extra fees (as as you make your payments punctually).
We don’t charge an application fee. You are able to get a cash loan absolutely no upfront cost and no the obligation to take action.
The Origination Fee includes the expenses associated in establishing and managing the loan. The only way to pay this cost if you take out the loan. Our Origination Fee is 2.5 percent of the amount of loan.
Can I pay off the loan early?
You can choose to repay the total amount of your loan early at any time.
If you do decide to take this route, please speak to our friendly company lending experts. They’ll offer you with repayment details along with an early payout estimate. This will be calculated as the sum of the principal amount remaining plus any accrued interest as of the time of early payment in addition to 1.5 percent of the principal balance plus any outstanding fees.
What are the repayment methods?
In order to help you avoid missing payments and to work with your cash flow cycle we provide repayments either weekly or daily. These are automatically deducted from your designated business account.
Security & privacy
Will my data be secure?
Protecting your information, and making it clear the ways we gather the information we collect, use, share and protect your information, is of paramount importance and is a crucial aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption standards to protect your sensitive, personal as well as financial data. Our funders are ISO 27001 qualified for our dedication to the security of our clients as well as their privacy. We make use of an advanced bank verification system link to instantly verify your bank account details online, allowing us to provide rapid response.
About business loans
What exactly is an asset-based loan (a secured loan)?
Asset-based borrowing occurs when a company owner makes use of an asset they own to secure the loan. The asset can be either a personal asset like the family home or an business asset such as a vehicle or piece of equipment.
The majority of lending institutions, even the largest banks, are inclined to guarantee loans against an asset. If you have trouble paying back the loan, your asset may be sold by the lender. In essence, it’s the process of securing new funding taking advantage of the value of what you already have.
Do I need security for a business loan?
For loans that exceed $150,000, it is not necessary to secure assets in advance to gain access to the funds but we do need a personal guarantee. As long as you follow the loan terms (as stated in your loan contract document), asset security will never be required. For loans of over $150,000 typically, you will need the option of a personal guarantee and security in the form of a charge over assets.