FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Reservoir Small Business Loans
Tell me what you think of the Reservoir Small Business Loans
Reservoir unsecured loans provides the range of $5,000 to $100,000 with terms between 3 and 24 month and cash flow-friendly repayments that are either daily or weekly.
What makes what makes the Unsecured Loan different from an traditional company loan?
Apply to the Small Business Loan in under 10 minutes on the phone. You’ll receive an instant response and the funds 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 a cash-based loan which means you know in advance the total amount due, which includes any fees, interest or charges. This is then divided into a daily or weekly amount to be paid back.
What can the Small Business Loan be used for?
The Small Business Loan can be used to fulfill almost any company purpose including control of cash flow business renovations, marketing, to purchase inventory or new equipment, for general working capital, and much more. The loan is not available to fund personal expenses.
About Larger Reservoir Business Loans
What is the Larger Reservoir Business Loan?
The Larger Business Loan is a larger loan size to support business growth opportunities. Loans are between $100,000 and $500,000 over a fixed term that can last up to 36 months. The repayments are made weekly or fortnightly in order to accommodate you cashflow.
How is the Origination Fee calculated?
This Larger Business Loan has an Origination Fee, calculated at 2.5% of the loan amount.
Am I eligible for the Larger Business Loan?
To be eligible for a loan of this size, your company needs to be operating for at least three years and generate an annual revenue of at least $700,000. It is necessary to be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old and have a New Zealand company (with a valid NZBN/IRD) and be able to prove at minimum 12 months of continuous trading.
How can the funds be utilised?
A larger business loan can be used for almost any company purpose including business renovations, purchase of equipment or inventory or as general working capital, and much more. The loan is not available for personal use.
Is the Larger Business Loan one that is secured?
Asset security is required for accessing funds over $150,000. It is usually by taking a charge over assets, and may include registration in the PPSR or registering as a caveat.
A personal or director’s ensure is a promise to repay a loan which is general in nature, rather than stipulating security over a particular asset. The person who is signing the guarantee is personally liable in the event that the business creditor is unable to repay the debt.
The Personal Property Securities Register (PPSR) is an online, central register that is operated by the New Zealand Government. It lists security interests that are that are registered for personal property (including objects or assets). The PPSR permits preference over private property assigned depending on the date that a security interest that is registered.
The caveat can be described as a formal document lodged to offer notice of a legal claim on a property.
What is a pre-approval minus Credit Check?
If you’re seeking larger business loans that is greater than $250,000 we may be able to provide an initial pre-approval to smooth out the process. We might be able to make this decision without credit checks and within six hours of your initial application. The pre-approval process is based on an initial assessment that includes you answering some financial health checks. It is not an offer of credit or guarantee of funds. A conditional approval is subject an assessment of your creditworthiness and any offer you might receive could be based on different conditions.
Application process
Do I qualify for funds?
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 business (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 trading (for the Larger Business Loan $100K to $500K)
How do I apply?
The application process is simple and easy. Complete the online form in just a few minutes, and a dedicated business credit specialist will call you to assist you.
For a loan of up to $100,000 you’ll need identification details (valid Driver’s Licence) as well as an NZBN/IRD that is valid and at least 6 months of bank statements.
If you’re looking for loans with larger sizes, you’ll need:
$100K-$250K: Information about the application including credit consent, 6 – 12 months of bank statements, IRD statement (if credit is over $150K).
$250K – $500K: Details for application including credit consent, 12 months of bank statements, IRD statement Last 2 years’ finalised financial statements, plus interim financial statements for the current year including Aged Payables, Aged Receivables summaries.
How fast will I get an answer?
For an unsecured loan ($5K and up) we typically provide an answer within one hour if you submit your request during quality business timings and permit us to make use of the advanced bank verification system to immediately verify your bank account information online. If you choose to upload copies of your bank statements , we will be able to offer the decision in as little as an company day.
If you are applying for a Larger Business Loan ($100K up to $500,000) we may be likely to provide you with conditional pre-approval in about six hours. Once you have 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. Some offers have been approved in less than 24 hours.
The fastest way for you to apply is ensure you apply during normal business hours, and permit us to use the advanced bank verification system link to verify your bank information online. If you choose to upload the copies of bank statement, it can take a bit longer.
What is the time frame to receive the funds?
For the Small Business Loan ($5K and up) we usually provide an answer within one hour, provided you submit your request in normal business time and you allow us to use the bank verification system link to immediately verify your bank account information online. If you choose to send us copies of your bank statements we can offer the decision in just 1 business day.
If you are applying for Larger Business Loans ($100K or more) we might be capable of provide you with pre-approval conditional to your application within about 6 hours. Once you’ve signed the pre-approval document, you will require to wait around 2-3 days for final approval, however this could be shorter based upon the circumstances for each application. Certain deals have been approved in just 24 hours.
The most efficient method can be make sure you apply during standard business hours, and let us use the modern bank verification link to check your bank’s information online. If you opt to send us duplicates of your banking statements it will take a little longer.
What’s the minimum amount I can borrow?
We provide loans ranging from $5,000 and $500,000. When you submit an application for a certain amount we look at a variety of factors that determine the well-being of your company and the level of payments your company is able to afford. The amount you receive from your loan will depend on the specifics that are unique to your business.
When you submit an application for a set amount, we look at a range of factors to assess the health that is your company as well as the amount of payments your business can afford. The total amount of your loan will depend on the particulars of your business.
Fees & repayments
How much do you charge for a business loan?
If you decide to make an application for one of our business financing, we will assess the risk profile the company and provide you with a customised offer including the loan amount, the terms and the interest rates. It is a company loan is an upfront priced loan and you’ll know the exact amount due, which includes any charges or interest.
What is the factor that determines the price I pay?
The interest rates on business loans rates depend on several factors such as the amount that is borrowed, what business assets the funds are used to purchase as well as the field the company operates in, the long the company is in operation and what percentage of the business has sufficient cash flow to pay for the loan, and also the overall health and creditworthiness of the business.
What are the cost?
There are no hidden fees with our business loans. You’ll be aware of the amount you be required to pay, and when, right from the first day. There’s no compounding and no additional fees (as long as you are able to make your payments punctually).
We do not charge an Application Fee. You can make an application for loans with no cost upfront or the obligation to take action.
The Origination Fee covers the costs associated with setting up and managing the loan. It is only charged for this cost if you take out the loan. Our Origination Fee is 2.5 percent of the amount of the loan.
Do I have the option of paying off the loan early?
You can repay the entire amount of your loan at any point in time.
If you do decide to pursue this option, please talk to one of our helpful business lending specialists. They will provide you with details on repayment and an early payment figure. It will be calculated using the sum of the remaining principal amount and any accrued interest at the time of early payout in addition to 1.5 percent of the principal balance as well as any outstanding fees.
How do repayments work?
To ensure you do not miss payments and to work with your cash flow general, we offer repayments that are either daily or weekly. They are automatically deducted from your business account.
Security & privacy
Will my information be protected?
The security of your personal information, as well as making it clear how we collect data, process, exchange and ensure the security of 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 techniques to protect your sensitive, personal financial and other data. Our funders are ISO 27001 certified for our commitment to the security of our customers as well as their privacy. We utilise a sophisticated banking verification system to immediately verify your bank account details online. This allows us to provide a fast response.
About business loans
What’s an asset-based borrow (a secured loan)?
The term "asset-based" refers to borrowing where a business owner makes use of an asset they own to get the funds for a loan. The asset can be either an asset belonging to the personal, like the family home, or it could be a business asset such as a vehicle or piece or equipment.
The majority of the lenders even the banks with the biggest size, prefer to make loans secured by assets. If you’re having trouble paying back the loan then the asset could be offered for sale by the lender. In essence, it’s the process of securing new funding using the value of what you already have.
Do I require security to secure an company loan?
For loans that exceed $150K, the requirement for asset security is not required upfront to access the money however, we require a personal guarantee. require a personal guarantee. In the event that you fulfill your loan obligations (as detailed in the loan contract), asset security is not needed. For loans of over $150K generally, there is the option of a personal ensure and security in the form of the charge of assets.