FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
Information About The Reservoir Small Business Loans
Let me know what you think of the Reservoir Small Business Loans
Reservoir unsecured loans offers amounts of between $5,000 and $100,000 with terms between 3 and 24 months. They also offer cash flow friendly repayments that are either daily or weekly.
How is the Unsecured Loan different from a traditional company loan?
Apply to get your Small Business Loan in under 10 minutes on the internet or over the phone, receive an instant response and the money could be in your account within 24 hours. Traditional business loans refer to an annual interest rate along with other charges and fees. We offer a company loan is a cash-based loan so you will know in advance the amount you will have to pay, including the interest, fees and charges. Then, it is divided into weekly or daily installment amount.
What can be the Small Business Loan be used for?
It is a Small Business Loan can be used for almost every company need, such as the management of cash flow, business improvements, advertising, to purchase inventory or new equipment, to fund general working capital and so much more. The loan cannot be used for personal purposes.
About larger Reservoir Business Loans
What is the Larger Reservoir 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 for a fixed period of that can last up to 36 months. The repayments are made weekly or fortnightly depending on your cash flow.
How is the Origination Fee calculated?
This Larger Business Loan has an Origination Fee, which 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 of this size, your business needs to have been trading for at least 3 years with an annual turnover of $700,000. It is necessary to be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old or 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 funding be utilised?
A Larger Business Loan can be used for almost any business need, including business remodeling, buying equipment or inventory for general working capital and so much more. The loan is not available for personal purposes.
Is the Larger Business Loan one that is secured?
Asset security is needed to access funding over $150,000. This can be done as a result of an charge over assets and can include the registration of this on the PPSR or the registration of a caveat.
A personal or director’s ensure is a guarantee to pay off a credit line that is general in nature rather than stipulating security over an asset. The person who signs the guarantee is personally liable if the company creditor is unable to repay the debt.
The Personal Property Securities Register (PPSR) is an online, central register run by the New Zealand Government. It lists security interests that are granted to individuals who own personal property (including items or assets). The PPSR gives preference over private property granted according to the date a security interest has been registered.
An affidavit is an official form of document to provide the public notice of a legal claim on a property.
What is a pre-approval that does not require Credit Check?
If you’re seeking larger company loans that is greater than $250,000 it is possible to offer 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 evaluation that involves you answering some financial well-being checks. It is in no way an offer, nor is it a guarantee of funds. Acceptance without condition is subject to an exhaustive credit evaluation, and any offer you are offered could be on different terms.
The application process
Are I eligible for funding?
You may apply for an company loan if you;
- are a New Zealand Citizen (or Permanent Resident)
- are over 18 years, have a New Zealand company (with a valid NZBN/IRD)
- must show at least six months worth of trade (for you to qualify for unsecured loan $5K – $100K) or three years of trading (for the Larger Business Loan $100K up to $500K)
How do I apply?
The application process is quick and simple. Complete the online form in few minutes and a dedicated company loan specialist will contact you to guide you.
To apply for up $100,000, you’ll need proof of identity (valid Driver’s License), an NZBN/IRD that is valid and at least six months of bank statements.
Otherwise, for larger loan sizes, you’ll require:
$100K – $250K: Information about the application including credit consent, 6-12 months of IRD statements, bank statements (if the loan is greater than $150K).
$250K – $500K: Application details including credit consent and 12 months bank statement, an IRD statement and the last two years’ finalised financial statements, plus interim current financial year financials such as age-related payables and aged Receivables summaries.
How quickly will I receive an answer?
For an unsecured loan ($5K and up) we usually provide an answer within one hour if you make your application in standard company times and allow us to utilise the advanced bank verification system to immediately verify your bank account information online. If you choose to send us copies of your bank statement, we’ll offer the decision in as little as the span of one company day.
For Larger Business Loans ($100K up to $500,000) we may be in a position to provide the conditional pre-approval within about six hours. Once you have signed the pre-approval document, you will need to wait around 2-3 days for final approval, however it could be faster based on the circumstances of each application. Certain agreements have been approved in less than 24 hours.
The fastest way would be to make sure you apply during standard company hours, and allow us to use our modern bank verification link to check your bank’s information online. If you opt to send us copies of your bank statements it will take a little longer.
How fast will I get the cash?
For the Small Business Loan ($5K or more) we usually provide a response in one hour, provided you apply at standard business time and let us utilise the advanced bank verification system link to immediately verify your bank account information online. If you decide to send us copies of your bank statement, we’ll offer an answer within one business day.
For the Larger Business Loans ($100K or more) we could be capable of provide the conditional pre-approval within 6 hours. Once you’ve signed your pre-approval, the turnaround time is approximately 2-3 days to receive final approval, however this can be faster depending on the circumstances of each application. Certain transactions have received approval in less than 24 hours.
The fastest way is to make sure you apply during standard business hours. Also, let us use the advance bank verification link to instantly verify your bank account information online. If you upload the copies of bank statements it will take a little longer.
What is the maximum amount I can borrow?
We offer loan amounts between $5,000 and $500,000. When you make an application for a certain amount we take into consideration a range of aspects to determine your well-being of your business and the extent of repayments your company can afford. The amount you receive from your loan will depend on the particular circumstances for your company.
If you apply for a particular amount, we will consider a number of factors to determine how much we can lend you such as well-being of the business and the level of the repayments your business is able to afford. The total amount of the loan will be determined by the particulars of your company.
Fees & repayments
How do you charge for an company loan?
When you apply for business loans with us company loan, we’ll assess the risk assessment of your company and provide an individualised proposal that includes the loan amount, the terms and interest rates. A business loan is a loan that is priced upfront therefore you will be aware of the total amount due, which includes any interest rates, fees or charges.
What determines the rate that I pay?
Interest rates for company loans rates depend on a variety of factors such as the amount that is of money borrowed, the company assets the funds are used to purchase and the sector the business is operating in, how long the business has been running, in the event that the business has sufficient cash flow to support the loan, and general well-being and creditworthiness of the business.
What are the cost?
There aren’t any hidden costs with our business loans, and you’ll be aware of the amount it is that you be required to pay, and when, from the first day. There’s no compounding and there are no additional charges (as long as you make your payments on time).
We don’t charge an Application Fee. You can apply for a loan with with no upfront cost or commitment to apply.
The Origination Fee covers the costs associated with the setting up and management of the loan. You are only charged this cost if you take out the loan. Our Origination Fee is 2.5 percentage of the loan amount.
Do I have the option of paying off the loan earlier?
You can repay all of your loan in full at any time.
If you choose to take this route, please speak to our friendly company loans experts. We will provide you with details on repayment and an early payout figure. It will be calculated using the sum of the principal remaining and accrued interest to the time of early payment, plus 1.5% of the principal remaining and any fees that remain unpaid.
What is the process for repayments?
To ensure that you don’t miss repayments and to fit in your cash flow schedule, we provide repayments either weekly or daily. These are automatically withdrawn from the nominated business account.
Security & privacy
Will my data be protected?
Protecting your information, and being upfront about the ways we gather, use, exchange and safeguard your data, is crucial and is an essential part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We utilise industry-recognised encryption protocols to safeguard your sensitive, personal financial information and our funders are ISO 27001 qualified for our commitment to protecting the security of clients and security. We employ an exceptionally sophisticated banking verification system to immediately verify your bank account information online so we can offer an immediate response.
About business loans
What is asset-based borrowing (a secured loan)?
An asset-based loan is when the business owner uses an asset that they own to make the funds for a loan. The asset could be an individual asset, such as the family home, or a business property like a truck or piece or equipment.
The vast majority of lending institutions, including the big banks, tend to guarantee loans against an asset. If you’re struggling to pay back the loan, the asset could be taken over by the lender. In essence it’s a way of securing new financing by using the value of what you already have.
Are I need security to get a company loan?
Up to $150K in loans no asset security is required prior to the loan’s access but we do need a personal guarantee. In the event that you fulfill the loan terms (as stipulated in your loan contract document) Asset security is not needed. For loans that exceed $150K, generally there is personal guarantee and security in the form a charge over assets.