FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Lugarno Small Business Loans
Let me know what you think of the Lugarno Small Business Loans
Lugarno unsecured loans provides amounts of between $5,000 and $100,000. Terms range from 3 and 24 months, cash flow friendly repayments which can be made daily or weekly.
What makes how is the Unsecured Loan different from a traditional business loan?
You can apply to get this Small Business Loan in under 10 minutes over the phone. You’ll get an answer within the same day and the money could be in your account within 24 hours. Traditional business loans refer to an annual rate of interest as well as other fees and charges. This business loan is a cash-based loan so you will be aware in advance of the total amount payable including the interest, fees and charges. Then, it is broken down into either weekly or daily installment amount.
What can you use the Small Business Loan be used for?
The Small Business Loan can be used for nearly any business reason, such as control of cash flow company improvements, advertising to purchase inventory or new equipment, for general working capital, and much more. The loan cannot be used for personal reasons.
About the Larger Lugarno Business Loans
What is the Larger Lugarno Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund business expansion opportunities. Loans are between $100,000 and $500,000 over a fixed term for up to 36 months. The repayments are made weekly or fortnightly in order to accommodate the flow of cash.
How is the Origination Fee determined?
It is important to note that 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 in this amount, your company needs to be in operation for at least 3 years and have an annual turnover of $700,000. The applicant must also be a New Zealand Citizen (or Permanent Resident) who is over the age of 18 and have a New Zealand business (with a valid NZBN/IRD) and be able of proving at least 12 months of trading.
How can the funding be utilised?
A Business Loan of a larger size is a great option for almost any business purpose including company renovations, purchase of equipment or inventory for general working capital, and much more. The loan is not available for personal reasons.
Is the Larger Business Loan one that is secured?
Asset security is required to obtain funding above $150,000. This is as a result of an charge against assets, which could also include the registration of this with the PPSR or the registration of a caveat.
A director’s or personal ensure is a guarantee to repay credit that is generally based rather than stipulating security over an asset. The person signing the guarantee is personally liable in the event that the business borrower is unable to repay the debt.
The Personal Property Securities Register (PPSR) is an online central register operated by the New Zealand Government. It lists security interests that are granted to individuals who own personal property (including objects or assets). The PPSR allows prioritisation over property that is personal to be assigned depending on the date that a security interest was registered.
An affidavit is an official document filed to provide the public notice of a legal claim on a property.
What is a pre-approval minus Credit Check?
If you’re requesting an enterprise loan of more than $250K we may be able to provide an initial pre-approval that will help simplify the process. We might be able to make this decision without a credit verification and within 6 hours of your initial application. The pre-approval process is based on an initial assessment that includes you answering a few financial health checks. It’s not an offer of credit or guarantee of finance. A conditional approval is subject a full credit assessment and any offer you receive could be on different conditions.
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 at least 18 years old, have a New Zealand business (with a valid NZBN/IRD)
- you must prove at least 6 months of trading (for the unsecured loan $5K – $100K) or three years of trade (for the Larger Business Loan $100K up to $500K)
How do I apply?
The application process is quick and easy. Simply complete the online form in just a few minutes, and a dedicated business credit specialist will contact you to guide you.
For a loan of up to $100,000 you’ll need identification details (valid Driver’s Licence) along with a valid NZBN/IRD and at least 6 months’ worth of bank statements.
If you’re looking for loans with larger sizes, you’ll also require:
$100K – $250K: Application details including credit consent, 6 – 12 months of IRD statements, bank statements (if credit is over $150K).
$250K-$500K: Details for application including credit consent and 12 months of bank statements, IRD statement and the last two years’ finalised financial statements, in addition to interim financials from the current financial year such as age-related payables and aged Receivables Summary.
What speed will I be able to get an answer?
For an unsecured loan ($5K and up) We can usually offer an answer within one hour if you submit your request during standard business time and permit us to utilise the bank verification system to instantly verify your bank information online. If you want to send us copies of your bank statements , we will be able to provide an answer within just 1 business day.
For Larger Business Loans ($100K to $500K) we might be able to offer you with conditional pre-approval in around 6 hours. After you’ve signed your pre-approval form, it will take about 2-3 days for final approval, however this can be quicker based on the specifics of each application. Certain deals have been approved in 24 hours.
The quickest way to apply for you to apply is make sure you apply during normal business hours, and allow us to use our advanced bank verification system to instantly verify your bank information online. If you opt to upload documents from your account accounts, it can take a bit longer.
How fast will I get the cash?
For the Small Business Loan ($5K or more) we usually offer a response in one hour – provided you make your application during normal business time and let us use the advanced bank verification system to immediately verify your bank account information online. If you want to submit copies of your bank statements, we are able to provide an answer in just one business day.
If you are applying for Larger Business Loans ($100K or more) we might be able to provide you with a conditional pre-approval within about 6 hours. After you’ve signed the pre-approval form, it will take around 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 just 24 hours.
The quickest method is to make sure you apply during normal business hours and let us use the advanced bank verification system link to check your bank’s information online. If you opt to send us copies of your bank statement, it will take a little longer.
What’s the minimum amount I can borrow?
We offer loans that range from $5,000 to $500,000. When you submit an application for a specific amount we will consider a number of variables that determine your health of your company as well as the amount of repayments that your business will be able to support. The amount you receive from the loan will be determined by the particular circumstances for your business.
When you make an application for a specific amount we look at a range of factors to assess how much we can lend you such as health that is your business and the amount of payments your company will be able to support. The total amount of your loan will be contingent on the specific circumstances for your company.
Fees & repayments
How do you charge for a business loan?
When you apply for business loans with us company loans, we will assess the risk assessment of your company and provide you with a tailored offer, including the amount of the loan, the duration and interest rates. The company loan is a loan that is priced upfront which means you be aware of the total amount due, which includes any costs, fees, or interest rates.
What determines the rate that I’m charged?
Interest rates for company loans rates depend on several factors including the amount borrowed, what company assets the funds will be used for in addition to the industry that the company is operating in, how long the business has been in operation and whether the business has enough cash flow to fund the loan, and also the general well-being or financial standing of the business.
What are the charges?
There aren’t any hidden costs with our company loans. You’ll know exactly how much it is that you need to pay and when, starting from the very first day. There’s no compounding and no extra fees (as long as you are able to make your payments in time).
We don’t charge an application fee. You are able to make an application for loans with with no upfront cost or the obligation to take action.
The Origination Fee includes the expenses associated with setting up and managing the loan. It is only charged for this fee if you proceed with the loan. The Origination Fee for us is 2.5 percentage of the amount of loan.
Can I pay off the loan earlier?
You can choose to repay the total amount of your advance loan at any time.
If you decide to pursue this option, please contact our helpful business loan experts. They’ll provide you with repayment details and an early payout figure. This will be calculated as the sum of the remaining principal amount and accrued interest to the time of early payout in addition to 1.5% of the principal remaining and any fees that remain unpaid.
How do repayments work?
In order to help you avoid missing payments and to work your cash flow cycle we offer repayments that are either daily or weekly. These are automatically deducted from your company account.
Security & privacy
Will my information be secure?
The security of your personal information, as well as making it clear how we collect the information we collect, use, share and secure your information, is vital 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 techniques to protect your sensitive, personal financial information and our funders are ISO 27001 certified for our commitment to customer security and privacy. We use an advanced banking verification system to immediately verify the bank account details online so we can offer rapid response.
About business loans
How do you define asset-based lending (a secured loan)?
An asset-based loan is when the business owner uses an asset they own to secure the funding. The asset can be an asset belonging to the personal, like the family home or a company asset like a truck or other piece of machinery.
The vast majority of banks, not just the major banks, prefer to make loans secured by assets. If you are having difficulty paying back the loan then the asset could be sold by the lender. In essence, it is the process of securing new financing by using the value of what you already own.
Do I require security to get a business loan?
For loans up to $150K it is not necessary to secure assets prior to the loan’s access, however we require a personal guarantee. need the personal guarantee. In the event that you fulfill your loan obligations (as detailed in the loan contract), asset security will never be needed. For loans over $150K generally, you are able to get a personal ensure and security that is in the form the charge of assets.