FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Dromana Small Business Loans
Let me know about the Dromana Small Business Loans
Dromana unsecured loans provides amounts between $5,000 and $100,000. The terms range between 3 and 24 months and cash flow friendly repayments that are either daily or weekly.
What is how is the Unsecured Loan different from an ordinary business loan?
You can apply for the Small Business Loan in under 10 minutes on the internet or on the phone. You’ll receive an instant response and funds may be in your account in 24 hours. Traditional business loans are based on an annual rate of interest as well as other fees and charges. The business loan is an upfront priced loan therefore you’ll know in advance the total amount payable including any interest, fees or charges. This is then broken down into weekly or daily payment amount.
What can the Small Business Loan be used for?
The Small Business Loan can be used to fulfill almost every company need, such as cash flow management, business remodels and marketing to purchase inventory, new equipment, as general working capital and so much more. The loan cannot be used for personal use.
About Larger Dromana Business Loans
What is the Larger Dromana Business Loan?
The Larger Business Loan is a larger loan size to support business expansion opportunities. Loans range between $100,000 and $500,000 with a term fixed that can last up to 36 months. Repayments are either weekly or fortnightly, depending on your cash flow.
How’s the Origination Fee calculated?
This Larger Business Loan has an Origination Fee that is determined at 2.5 percentage of the amount of the loan.
Am I eligible for the Larger Business Loan?
To qualify for a loan in this amount, your business needs to be in operation for at least 3 years, and have an annual income of $700,000. Your company must belong to a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old and have a New Zealand business (with a valid NZBN/IRD) and be able of proving at minimum 12 months of business.
What can the funds be used for?
A large company loan can be used to fund almost every company purpose including company improvements, purchasing equipment or inventory as well as for general working capital, and much more. The loan cannot be used to fund personal expenses.
Is the Larger Business Loan one that is secured?
Asset security is necessary to obtain funding above $150,000. It is usually as a result of an charge on assets, and may include the registration of this with the PPSR or making as a caveat.
A director’s or personal guarantee is a commitment to repay credit that is general in nature rather than defining security over a particular asset. The person signing the ensure is personally accountable if the company borrower is unable to make the repayment.
The Personal Property Securities Register (PPSR) is an online central register operated by the New Zealand Government. It contains security interests that are registered for personal property (including the assets or goods). The PPSR gives priority over personal property to be assigned according to the date the security interest has been registered.
The caveat can be described as a formal document filed to offer notice of a legal claim to property.
What is a pre-approval minus Credit Check?
If you’re seeking an enterprise loan of more than $250,000 we can offer an initial pre-approval that will help simplify the process. We may be able to get this done without a credit check and within six hours of your initial application. The pre-approval is based upon an initial assessment that includes the answer to a series of financial well-being questions. This is neither an offer nor a guarantee of credit. Unconditional approval is subject to a full credit assessment and any offer that you might receive could be on different terms.
Application process
Can I be eligible for funding?
You are eligible to apply for a business loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are at least 18 years old, own a New Zealand business (with a valid NZBN/IRD)
- can demonstrate at least 6 months’ worth of transactions (for for the unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The process for applying is fast and simple. Just complete the online application in just a few minutes, and an experienced business loan specialist will call you to guide you.
To apply for up to $100,000 you’ll require ID details (valid Driver’s Licence) and a valid NZBN/IRD as well as at least 6 months’ worth of bank statements.
If you’re looking for loans with larger sizes, you’ll need:
$100K to $250K: Application details including credit consent, 6-12 months of IRD statements, bank statements (if credit is over $150K).
$250K-$500K: Information on the application including credit consent twelve months bank statement, an IRD statements Last 2 years’ finalised financial statements, and interim current financial year financials such as age-related payables and aged Receivables Summary.
What speed will I be able to get a decision?
For an unsecured loan ($5K up to $100,000) We can usually provide an answer within an hour if you make your application within quality company hours and let us use the advanced bank verification system link to immediately verify your bank account information online. If you choose to upload copies of your banking statements , we are able to provide the decision within just the span of one company day.
For Larger Business Loans ($100K and up) we may be in a position to offer you with a conditional pre-approval in around 6 hours. After you’ve signed your pre-approval, the turnaround time is approximately 2-3 days to receive final approval, however this may be quicker depending on the specifics of each application. Some transactions have received approval within just 24 hours.
The quickest method can be ensure you apply during normal company hours. You can also allow us to use the advance bank verification to instantly check your bank’s information online. If you decide to send us documents from your account accounts, it takes a bit longer.
How quickly will I receive the funds?
For the Small Business Loan ($5K to $100K) we can often offer an answer within one hour – as long as you make your application at standard business time and allow us to utilise the advanced bank verification system to immediately verify your bank account information online. If you choose to upload copies of your banking statements, we will be able to offer an answer in as little as 1 business day.
For the Larger Business Loans ($100K or more) we might be likely to offer you with a conditional pre-approval within six hours. Once you’ve signed the pre-approval form, it will take about 2-3 days for final approval. However, it could be faster based on the specifics of each application. Certain agreements have been approved within the space of 24 hours.
The quickest method can be make sure you apply during normal business hours and allow us to use the modern bank verification link to verify your bank account information online. If you decide to send us documents from your account statements, it will take a little longer.
How much can I borrow?
We provide loans ranging from $5,000 and $500,000. When you make an application for a particular amount, we take into consideration a range of factors to determine what is the well-being that is your business as well as the amount of repayments your company can support. The total amount of the loan will be determined by the specific circumstances that are unique to your business.
When you make an application for a certain amount, we will consider a number of factors to determine your health that is your company and the extent of repayments that your business can afford. The total amount of the loan will be determined by the specific circumstances that are unique to your business.
Fees & repayments
What is the cost for a company loan?
If you decide to apply for the company financing, we will assess the risk profile that you have for your company and provide you with a customised offer including the amount of the loan, the duration and interest rates. The business loan is an upfront-priced loan so you will know the exact amount you will have to pay, including charges or interest.
What determines the amount I’m charged?
The interest rates on company loans rates depend on a variety of factors including the amount borrowed, the business assets the money will be used for as well as the field the company is in, how long the business has been running, in the event that the company has sufficient cash flow to pay for the loan, as well as the general health and creditworthiness of the company.
What are the fees?
There aren’t any hidden charges with our company loans. You’ll know precisely how much it is that you be required to pay and when, right from day one. There’s no compounding and no extra fees (as long as you make your payments on time).
We do not charge an Application Fee. You can apply for a loan with absolutely no upfront cost and no any obligation to sign up.
The Origination Fee is the cost associated with establishing and managing the loan. This is only a cost if you take out the loan. The Origination Fee for us is 2.5 percentage of the amount of the loan.
Can I pay out the loan early?
You can choose to repay the total amount of your loan in full at any time.
If you choose to do this please speak to our friendly business loans experts. We will provide you with repayment details and an early payment figure. The figure will be calculated as the total of the principal balance and accrued interest to the date of early payout and 1.5% of the remaining principal and any fees that remain unpaid.
How do repayments work?
To ensure that you don’t miss due dates and also to be in line your cash flow schedule, we provide repayments either daily or weekly. They will be automatically deducted from the nominated company account.
Security & privacy
Will my information be protected?
The security of your personal information, as well as making it clear the ways we gather information, use it, and exchange it, as well as ensure the security of your information is of paramount importance and a vital aspect of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We make use of industry-standard encryption techniques to protect your sensitive, personal financial and other data. Our funders are ISO 27001 certified for our commitment to security for our clients and privacy. We make use of an advanced bank verification system link to instantly confirm your bank account information online. This allows us to offer an immediate response.
About business loans
How do you define asset-based lending (a secured loan)?
Asset-based borrowing is when the business owner makes use of the assets they have to make a loan. The asset could be an asset belonging to the personal, like the family home, or a business asset such as a vehicle or other piece of machinery.
The vast majority of lenders, even the major banks, prefer to secure loans against an asset. If you’re having trouble paying back the loan, your assets could be sold by the lender. In essence, it’s an opportunity to secure additional financing using the worth of the asset you already have.
Are I require security to secure a company 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 require a personal guarantee. As long as you follow your loan commitments (as detailed in your loan contract) Asset security will never be needed. For loans of over $150K typically, you will need personal ensure and security in the form of charges on assets.