FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Details of The Colyton Small Business Loans
Tell me how you can avail the Colyton Small Business Loans
Colyton unsecured loans offers amounts between $5,000 and $100,000 with terms between 3 and 24 months, cash flow friendly repayments that are either per day or weekly.
How is what makes the Unsecured Loan different from an traditional company loan?
Apply for your Small Business Loan in under 10 minutes on the internet or over the phone, receive an immediate response, and have the funds available in just 24 hours. Traditional business loans reference an annual interest rate as well as other fees and charges. The business loan is a pre-paid loan therefore you’ll be aware of the total amount to be paid, including any interest, fees or charges. This is then divided into a daily or weekly amount to be paid back.
What can you use the Small Business Loan be used for?
A Small Business Loan can be used for virtually every business purpose including managing cash flows, business renovations, marketing to purchase inventory, new equipment, as general working capital and much more. The loan cannot be used for personal purposes.
About Larger Colyton Business Loans
What is the Larger Colyton Business Loan?
The Larger Business Loan is a larger size loan to aid in business growth opportunities. Loans range between $100,000 and $500,000 for a fixed period of that can last up to 36 months. The repayments are made weekly or fortnightly depending on you cashflow.
How is the Origination Fee calculated?
The Larger Business Loan has an Origination Fee, determined at 2.5 percent of the amount of the loan.
Do I qualify for the Larger Business Loan?
To be eligible for a credit of this size, your business needs to be trading for at least 3 years and have an annual turnover of $700,000. You must be a New Zealand Citizen (or Permanent Resident) who is over the age of 18 and have a New Zealand company (with a valid NZBN/IRD) and be able demonstrate at the least 12 months of operating.
How can the funds be utilised?
A Larger Business Loan can be used to fund almost all business use, including business improvements, purchasing inventory or new equipment as well as for general working capital and much more. The loan cannot be used for personal reasons.
Is the Larger Business Loan one that requires security?
Asset security is necessary to obtain funding above $150,000. It’s by taking a charge against assets and can be registered in the PPSR or making a caveat.
A personal or director’s guarantee is a guarantee to repay a loan which is general in nature, rather than specifying the security for a particular asset. The person signing the ensure is personally responsible if the business borrower is unable to re-pay the debt.
The Personal Property Securities Register (PPSR) is an online central register run by the New Zealand Government. It records security interests that have been granted to individuals who own personal property (including the assets or goods). The PPSR grants the priority of personal property assigned in accordance with the date on which a security interest has been registered.
The caveat can be described as a formal document filed to provide the legal claim against a property.
What is a pre-approval that does not require Credit Check?
If you’re applying for the Larger Business Loan that is greater than $250,000, we may offer a preliminary pre-approval to help smooth out the process. It is possible to do this without a credit verification and within 6 hours of the initial application. The pre-approval is based upon an initial assessment, which involves you answering a few financial well-being questions. It’s not an offer of credit or guarantee of funds. A conditional approval is subject an exhaustive credit evaluation, and any offer you may receive may be on different terms.
The application process
Do I have the right to receive funds?
You are eligible to apply for a company loan if you:
- are a New Zealand Citizen (or Permanent Resident)
- are over the age of 18 and 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 3 years of continuous trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The process for applying is fast and simple. Simply complete the online form within a couple minutes, and a dedicated company lending specialist will be in touch to assist you.
To apply for up to $100,000 you’ll require identification details (valid Driver’s Licence) along with an NZBN/IRD that is valid and at least six months worth 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 bank statements, IRD statement (if loan above $150K).
$250K-$500K: Details of the application, including credit consent and 12 months of bank statements, IRD statements as well as the two most recent years’ financial statements, in addition to interim financials from the current financial year such as age-related payables and aged Receivables summary.
How quickly will I receive a decision?
For an unsecured loan ($5K to $100K) we usually offer a response in one hour if you apply in standard business timings and permit us to use the advanced bank verification system link to immediately verify your bank account information online. If you choose to upload copies of your bank statements we can offer the decision within just one company day.
For the Larger Business Loan ($100K up to $500,000) we could be capable of provide you with a conditional pre-approval in about 6 hours. After you’ve signed the pre-approval form, it will take approximately 2-3 days to receive final approval, however this can be quicker based on the particular circumstances of each application. Some transactions have received approval in just 24 hours.
The fastest way for you to apply is make sure you apply during standard company hours. Also, let us use the modern bank verification link to check your bank’s information online. If you upload documents from your account statement, it takes a bit longer.
What is the time frame to receive the funds?
For the Small Business Loan ($5K to $100K) we can often provide an answer within an hour if you submit your request at standard business times and let us utilise 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’ll be able to offer an answer within 1 business day.
For the Larger Business Loans ($100K or more) we might be able to offer you with a conditional pre-approval in around six hours. Once you’ve signed the pre-approval, the turnaround time is about 2-3 days for final approval. However, this could be shorter based on the particular circumstances of each application. Certain offers have been approved within the space of 24 hours.
The fastest way can be make sure you apply during standard business hours and allow us to use the advance bank verification link to instantly verify your bank information online. If you send us duplicates of your banking statements it will take a little longer.
What’s the minimum amount I can borrow?
We offer loans that range from $5,000 and $500,000. If you apply for a certain amount, we will consider a number of variables in order to assess what is the well-being of the company and the extent of repayments your company is able to afford. The amount you receive from your loan will be contingent on the particular circumstances of your business.
When you apply for a set amount, we will consider a number of aspects to determine your well-being that is your business and the amount of repayments your company will be able to support. The total amount of the loan will be determined by the particulars of your company.
Fees & repayments
How much should you charge for an business loan?
If you decide to apply for business loans with us company credit, we’ll assess the risk profile for your business and offer you with a customised offer including the amount of loan, the term and the interest rates. A business loan is an upfront priced loan which means you be aware of the total amount to be paid, including any charges or interest.
What determines the amount I will be charged?
Interest rates for business loans rates vary due to factors like the amount of money borrowed, what company assets the funds will be used for, the industry the company is operating in, how long the business is in operation as well as what percentage of the company has sufficient cash flow to fund the loan, and the overall health and creditworthiness of the company.
What are the fees?
There aren’t any hidden charges with our company loans, and you’ll be aware of the amount you be required to pay, and when, starting from the first day. There’s no compounding interest, and there are no additional charges (as as long as you pay your payments punctually).
We don’t charge an application fee. You can apply for a loan with no cost upfront or the obligation to take action.
The Origination Fee is the cost associated with setting up and managing the loan. You are only charged this cost if you take out the loan. The Origination Fee for us is 2.5 percent of the amount of the loan.
Do I have the option of paying off the loan earlier?
You can decide to repay all of your loan at any point in time.
If you decide to take this route, please speak to our friendly business loans professionals. The experts will offer you with details for repayment as well as an early payout amount. This will be calculated as the total of the principal remaining and accrued interest to the time of the early payout and 1.5% of the principal balance as well as any outstanding fees.
What is the process for repayments?
To ensure you do not miss repayments and to fit in with your cash flow cycle we offer repayments that are either daily or weekly. These are automatically deducted from your business account.
Security & privacy
Will my information be secure?
Security of your data, and being clear about the ways we gather data, process, exchange and ensure the security of your information is of huge importance and an integral 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 commitment to customer security and security. We utilise a sophisticated bank verification system that allows you to immediately verify your bank account details online, allowing us to offer rapid response.
About business loans
How do you define asset-based lending (a secured loan)?
The term "asset-based" refers to borrowing where the company owner makes use of the assets they have to secure the funds for a 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 vast majority of the lenders even the largest banks, are inclined to guarantee loans against an asset. If you’re having trouble paying back the loan, then your asset may be taken over by the lender. In essence, it’s the process of securing new funding using the value of what you already have.
Do I need security to secure an company loan?
Up to $150K in loans the requirement for asset security is not required prior to the loan’s access but we do require an individual guarantee. In the event that you fulfill the terms of your loan (as detailed in the loan contract), asset security will never be required. For loans of over $150,000 generally there is the option of a personal ensure and security in the form of an asset charge.