FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Modbury Small Business Loans
Tell me how you can avail the Modbury Small Business Loans
Modbury unsecured loans offers the range of $5,000 to $100,000 with terms between 3 and 24 months and cash flow friendly repayments that are either daily or weekly.
What is the Unsecured Loan different from an ordinary company loan?
It is possible to apply to this Small Business Loan in under 10 minutes online or over the phone. You’ll get an answer within the same day and have the funds in your account in 24 hours. Traditional business loans have an annual interest rate plus other fees and charges. This company loan is a cash-based loan therefore you’ll be aware of the total amount payable including any fees, interest or charges. Then, it is broken down into weekly or daily repayment figure.
What could be the Small Business Loan be used for?
A Small Business Loan can be used for nearly any company use, including managing cash flows, business renovations, marketing, to purchase inventory or new equipment, for general working capital, and much more. The loan cannot be used for personal use.
About Larger Modbury Business Loans
What is the Larger Modbury Business Loan?
The Larger Business Loan is a larger size loan to aid in company growth opportunities. Loans range from $100,000 to $500,000 for a fixed period of with a maximum of 36 months. The repayments are made weekly or fortnightly depending on your cash flow.
How’s the Origination Fee calculated?
It is important to note that the Larger Business Loan has an Origination Fee that is determined at 2.5 percent of the loan amount.
Am I eligible for the Larger Business Loan?
To qualify for a loan in this amount, your business needs to be operating for at least three years and generate an annual revenue of at least $700,000. The applicant must also 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 least 12 months of trading.
How can the funds be utilised?
A large business loan can be used to fund almost all business purpose including company remodeling, buying inventory or new equipment for 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 needed to access funding over $150,000. This can be done by taking a charge on assets, and may include registering this on the PPSR or the registration of as a caveat.
A personal or director’s guarantee is a commitment to repay a loan which is general in nature, rather than stipulating security over a particular asset. The person who signs the guarantee is personally responsible if the business borrower is unable to repay the debt.
The Personal Property Securities Register (PPSR) is a central, national online register that is operated by the New Zealand Government. It contains security interests registered in respect of personal property (including objects or assets). The PPSR gives the priority of personal property granted in accordance with the date on which a security interest was registered.
An affidavit is an official document lodged to offer the public notice of a legal claim to a property.
What is a pre-approval minus Credit Check?
If you’re requesting larger business loans of more than $250K we may be able to provide an initial pre-approval that will help smooth out the process. We could be able to apply for this without a credit check and within 6 hours of the initial application. The pre-approval is based upon an initial evaluation that involves you answering some financial well-being checks. This is in no way an offer, nor is it a guarantee of financing. The approval of a conditional loan is subject to an assessment of your creditworthiness and any offer you are offered could be on different conditions.
The application process
Can I be eligible for funding?
You can apply for an company loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are over 18 years, own a New Zealand company (with a valid NZBN/IRD)
- can demonstrate at least 6 months’ worth of transactions (for a unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K or $500K)
How do I apply?
The application process is fast and simple. Simply complete the online form in few minutes and a dedicated company loan specialist will be in touch to help you.
To be eligible for up to $100,000 you’ll require the right identification documents (valid Driver’s License) as well as an NZBN/IRD that is valid and at least six months worth of bank statements.
Otherwise, for larger loan sizes, you’ll need:
$100K – $250K: Details of application, including credit consent, 6 – 12 months of IRD statements, bank statements (if you have a loan of more than $150K).
$250K to $500K: Details for application including credit consent, 12 months of bank records, IRD statement as well as the two most recent years’ financial statements, and interim financial statements for the current year including Aged Payables, Aged Receivables reports.
How quickly will I receive an answer?
For an unsecured loan ($5K to $100K) we can often provide a response in one hour, provided you make your application within quality business timings and you allow us to make use of the advanced bank verification system link to instantly verify your bank’s information online. If you opt to send us copies of your bank statements , we are able to offer the decision in as little as one business day.
For the Larger Business Loan ($100K and up) we might be likely to offer the conditional pre-approval in around six hours. Once you’ve signed the pre-approval document, you will need to wait about 2-3 days for final approval. However, this can be quicker based on the specifics of each application. Some deals have been approved within the space of 24 hours.
The quickest method for you to apply is make sure you apply during standard company hours. You can also let us use the advance bank verification link to check your bank’s information online. If you opt to send us duplicates of your banking statement, it can take a bit longer.
How fast will I get the money?
For the Small Business Loan ($5K up to $100,000) we usually offer a response in one hour, provided you submit your request during standard business times and permit us to utilise the advanced bank verification system link to instantly verify your bank’s information online. If you decide to upload copies of your banking statements, we are able to offer the decision within 1 business day.
If you are applying for Larger Business Loans ($100K up to $500,000) we could be in a position to offer you with pre-approval conditional to your application within about six hours. Once you have signed the pre-approval, the turnaround time is about 2-3 days for final approval, however this could be shorter based on the particular circumstances of each application. Some agreements have been approved within less than 24 hours.
The fastest method would be to ensure you apply during standard business hours. You can also allow us to use our advance bank verification to instantly confirm your bank details online. If you upload documents from your account statements it can take a bit longer.
How much can I borrow?
We provide loans ranging from $5,000 and $500,000. If you apply for a certain amount we take into consideration a range of aspects that determine what is the well-being that is your company as well as the amount of the repayments your company can afford. The total amount of your loan will be contingent on the specifics the business.
When you make an application for a certain amount, we consider a variety of variables to assess the health that is your company and the amount of repayments your business can support. The total amount of your loan will be determined by the particular circumstances the company.
Fees & repayments
How much should you charge for an company loan?
If you decide to apply for our business credit, we will assess the risk profile that you have for your company and provide you with a tailored offer, including the amount of loan, the term and interest rates. A company loan is an upfront cost loan which means you know in advance the total amount to be paid, including any charges, interest rates or fees.
What determines the rate that I’m charged?
Business loan interest rates depend on several factors like the amount of money that is borrowed, what business assets the money are used to purchase in addition to the industry that the business operates in, the long the company has been operating for, whether the business has enough cash flow to fund the loan, and general well-being or financial standing of the company.
What are the fees?
There aren’t any hidden charges for our business loans. You’ll know precisely how much it is that you need to pay, and when, right from the very first day. There’s no compounding and no additional fees (as as long as you pay your payments in time).
We don’t charge an Application Fee. You can apply for a loan with no upfront cost or the obligation to take action.
The Origination Fee is the cost associated with setting up and managing the loan. It is only charged for this fee if you choose to proceed with the loan. Our Origination Fee is 2.5 percentage of the amount of the loan.
Can I pay out the loan early?
You can repay all of your advance loan at any time.
If you do decide to do this please call our helpful company credit specialists. We will offer you with the details of your repayment along with an early payout estimate. 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 percent of the principal remaining and any fees that remain unpaid.
What is the process for repayments?
To help you avoid missing payments and to work your cash flow schedule, we offer repayments that are either daily or weekly. These are automatically deducted from your designated business account.
Security & privacy
Will my data be protected?
Making sure that your information is secure, and being transparent about how we collect data, process, exchange and ensure the security of your information is vital and a vital part of our relationship you.
Is it safe to link my bank account to the platform?
Yes. We use industry recognised encryption techniques to protect your sensitive, personal as well as financial data. Our funders are ISO 27001 qualified for our dedication to customer security and security. We employ an exceptionally sophisticated bank verification system that allows you to instantly verify your bank account information online. This allows us to provide quick responses.
About business loans
How do you define asset-based lending (a secured loan)?
The term "asset-based" refers to borrowing where an company owner borrows from assets they own to obtain the funding. The asset may be an asset belonging to the personal, like the family home or a business asset such as a vehicle or piece or equipment.
The vast majority of lending institutions, even the major banks, prefer to secure loans against assets. If you’re having trouble paying back the loan, the asset could be taken over by the lender. In essence, it is means of securing new funding using the worth of the asset you already own.
Should I require security for a business loan?
For loans up to $150K no asset security is required prior to the loan’s access However, we require a personal guarantee. require the personal guarantee. In the event that you fulfill your loan obligations (as detailed in your loan contract) Asset security will never be required. For loans over $150K generally there is an individual guarantee and security in the form the charge of assets.