FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Lota Small Business Loans
Let me know how you are able to avail the Lota Small Business Loans
Lota unsecured loans provides the range of $5,000 to $100,000 with terms between 3 and 24 months, cash flow-friendly repayments that are either daily or weekly.
What makes what makes the Unsecured Loan different from an ordinary company loan?
You can apply to get your Small Business Loan in under 10 minutes on the phone. You’ll receive an immediate response, and the funds could be on your account within 24 hours. Traditional company loans are based on an annual rate of interest plus other fees and charges. Our company loan is an upfront priced loan therefore you’ll be aware of the amount you will have to pay, including the interest, fees and charges. This is then divided into weekly or daily installment amount.
What can you use the Small Business Loan be used for?
The Small Business Loan can be used to fulfill almost every company use, including managing cash flows, business renovations, marketing, to purchase inventory or new equipment, or as general working capital, and much more. The loan cannot be used for personal use.
Concerning Larger Lota Business Loans
What is the Larger Lota 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 with a term fixed for up to 36 months. Repayments are either weekly or fortnightly to work with your situation.
How’s the Origination Fee calculated?
This Larger Business Loan has an Origination Fee, calculated at 2.5 percent of the loan amount.
Do I qualify for the Larger Business Loan?
To be eligible for a loan that is this large, your 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) with a minimum age of 18 years old or have a New Zealand business (with a valid NZBN/IRD) and be able of proving at minimum 12 months of continuous trading.
How can the funds be utilised?
A large company loan is a great option for almost every business use, including company remodeling, buying inventory or new equipment for general working capital, and much more. The loan cannot be used for personal use.
Is the Larger Business Loan one that is secured?
Asset security is required to obtain funding above $150,000. This can be done by way of charge on assets and can be registered through the PPSR or filing as a caveat.
A director’s or personal guarantee is a promise to pay off a credit line that is generally based rather than stating the security for a particular asset. The person who signs the guarantee is personally accountable if the business borrower is unable to repay the debt.
The Personal Property Securities Register (PPSR) is a central, national online register run by the New Zealand Government. It reflects security interests that are registered for personal property (including the assets or goods). The PPSR permits the priority of personal property granted according to the date the security interest was registered.
A caveat is a legal document that is filed to provide the legal claim against a property.
What is a pre-approval that does not require Credit Check?
When you’re applying for the Larger Business Loan that is greater than $250K, we may offer an initial pre-approval in order to ease the process. We might be able to do this without a credit verification and within 6 hours of the initial application. This pre-approval is made based on a preliminary assessment which includes the answer to a series of financial health checks. It’s not an offer or guarantee of funds. The approval of a conditional loan is subject to a full credit assessment and any offer you might receive could be based on 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, have a New Zealand company (with a valid NZBN/IRD)
- you must prove at least 6 months of business (for you to qualify for unsecured loan $5K – $100K) or 3 years of continuous trading (for the Larger Business Loan $100K up to $500K)
How do I apply?
The application process is simple and easy. Just complete the online application within a few minutes and an experienced business credit specialist will contact you to guide you through the process.
For a loan of up to $100,000 you’ll need identification details (valid Driver’s Licence) as well as a valid NZBN/IRD and at least six months worth of bank statements.
Otherwise, for larger loan sizes, you’ll need:
$100K to $250K: Application details including credit approval, 6-12 months of IRD statements, bank statements (if you have a loan of more than $150K).
$250K – $500K: Details for application including credit consent twelve month bank accounts, the IRD statement as well as the two most recent years’ financial statements, and interim current financial year financials such as age-related payables and aged Receivables reports.
How fast will I get an answer?
For an unsecured loan ($5K and up) We can usually provide a response in one hour if you submit your request within quality business timings and let us utilise the bank verification system link to instantly verify your bank details online. If you opt to submit copies of your bank statement, we’ll provide a decision in just one business day.
If you are applying for a Larger Business Loan ($100K up to $500,000) we may be able to offer you with conditional pre-approval within about six hours. Once you have signed the pre-approval, the turnaround time is around 2-3 days for final approval, however it could be faster based on the circumstances of each application. Some transactions have received approval within just 24 hours.
The quickest method can be make sure you apply during normal company hours. Also, permit us to use the advanced bank verification system link to instantly check your bank’s information online. If you opt to upload duplicates of your banking statements , it can take a bit longer.
How quickly will I receive the cash?
For the Small Business Loan ($5K and up) we typically provide an answer within an hour – provided you submit your request during normal business hours and permit us to utilise the advanced bank verification system link to instantly verify your bank’s information online. If you want to send us copies of your bank statements we can provide an answer in just an business day.
If you are applying for Larger Business Loans ($100K to $500K) We may be capable of offer you with conditional pre-approval within six hours. Once you’ve signed the pre-approval document, you will require to wait approximately 2-3 days to receive final approval, however this may be quicker depending upon the circumstances for each application. Some deals have been approved within 24 hours.
The most efficient method can be ensure you apply during normal business hours, and allow us to use the advanced bank verification system link to verify your bank account information online. If you send us the copies of bank statement, it will take a little longer.
How much can I borrow?
We provide the loan amount between $5,000 to $500,000. When you submit an application for a certain amount we consider a variety of factors for determining the health of your company and the extent of repayments that your business can afford. The amount you receive from the loan will be determined by the particular circumstances the company.
When you make an application for a certain amount, we take into consideration a variety of elements to determine your health of your company as well as the amount of repayments your company will be able to support. The total amount of your loan will depend on the specific circumstances that are unique to your company.
Fees & repayments
How much should you charge for the cost of a company loan?
When you request business loans with us business loans, we’ll assess the risk profile the company and offer you with a tailored offer including the amount of the loan, the duration and interest rates. This business loan is an upfront-priced loan which means you know in advance the total amount you will have to pay, including costs, fees, or interest rates.
What is the factor that determines the price I will be charged?
The interest rates on business loans rates differ based on various variables like the amount to be borrowed, what business assets the money will be used for and the sector the company is in, how long the company is in operation for, whether the business has enough cash flow to support the loan, and the general well-being or creditworthiness of the business.
What are the charges?
There aren’t any hidden charges with our company loans. You’ll know precisely what it is that you need to pay, and when, starting from the day you sign up. There’s no compounding interest, and no additional fees (as as long as you pay your payments in time).
We do not charge an application fee. You can request a credit loan without any upfront costs or commitment to apply.
The Origination Fee covers the costs 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 percentage of the loan amount.
Can I pay out the loan earlier?
You may choose to pay back the total amount of your loan at any point in time.
If you do decide to take this route, please contact our helpful business loans specialists. We will offer you with repayment details as well as an early payout amount. The figure will be calculated as the total of the principal balance and accrued interest to the date of early payout, plus 1.5 percent of the principal remaining as well as any outstanding fees.
How do repayments work?
To help you avoid missing repayments and to fit in your cash flow schedule, we offer repayments either weekly or daily. These are automatically deducted from your designated company account.
Security & privacy
Will my data be secure?
Making sure that your information is secure, and making it clear the ways we gather data, process, exchange and protect your information, is vital and a vital element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We employ industry-recognised encryption techniques to protect your sensitive, personal as well as financial data. Our funders are ISO 27001 qualified for our commitment to customer security and security. We make use of an advanced bank verification system that allows you to instantly verify the bank account details online to offer rapid response.
About business loans
What’s an asset-based borrow (a secured loan)?
An asset-based loan is when an business owner borrows from the assets they have to obtain the funding. The asset may be an asset belonging to the personal, like the family home or a business asset like a truck or piece of equipment.
The vast majority of the lenders including the big banks, tend to make loans secured by an asset. If you have trouble paying back the loan then your assets could be sold by the lender. In essence, it’s the process of securing new financing by using the value of what you already have.
Do I require security for an business loan?
For loans up to $150,000 there is no requirement for asset security upfront to access the money but we do require an individual guarantee. So long as you comply with your loan obligations (as specified in the loan contract) Asset security is not needed. For loans that exceed $150K, typically, you will need personal ensure and security in the form the charge of assets.