A business loan is a fixed term, fixed interest rate, Secured or Unsecured loan for a period of 1 month to 7 years (depending on security offered).
What you will learn in this Business Loan guide:
You can use a Business loan for numerous reasons like:
Once you have decided on the need for a Loan and all the paperwork has been processed Pioneer Finance will pay the funds directly to the supplier if you are making a purchase. If the funds a required by your business and will be used over a period of time they will be deposited into your business bank account.
In some instances the finance company can hold funds back for you until you are ready to use it which can hep save on interest costs
We offer a standard principal and interest term loan from 1 month to 7 years depending on the security offered.
Some of our shorter-term loans could be done as an interest only loan and in certain circumstances we could do a fully or partially capitalising loan.
A secured Business loan means the business or the directors have offered some security to the finance company until the loan is repaid. Offering security can gain you better finance terms such as lower interest rates and longer terms. This makes lending to your business a lower risk proposition and will give you a greater chance of having your loan approved.
An unsecured business loan means the finance company has not taken any security for the loan and makes this a higher risk proposition for them. What this means for you is usually a higher interest rate and a shorter term meaning the repayments will be higher. The reason for the shorter term is the risk to the finance company and they will try to get the funds they have lent back quickly.
We can use the following securities:
For some applicants we may be able to help you with an unsecured loan.
The loan terms we are able to offer depend on the security offered. Below is a table detailing the terms we can offer:
|Motor Vehicles less than 10 years old||4 Years|
|Motor vehicles older than 10 years||3 Years|
|Motor vehicles older than 18 years||2 Years|
|Boats & Jetskis||3 Years|
Below is a list of benefits of getting a business loan:
One of the main risks for businesses these days is getting the wrong type of loan for the business. It is important to ensure the loan you take does not put your business under any undue financial strain.
For more information on things you need to consider have a look at this website by the Ministry of Business, Innovation and employment www.business.govt.nz/getting-started/funding-your-business/borrowing-money/.
For further information about businesses you can go directly to their website here.
|Short Term loan||Long term Loan|
|Purchase stock and materials||Vehicle or Machinery purchase|
|Cover Wages or contractor expenses||Upgrade IT or Phone System|
|Invoice financing||Fund an advertising campaign or promotion|
Depending on the finance company and the conditions of the loan it may be ok for you to take a loan over a long term for a short-term reason but you should settle the loan early when the funds become available.
Short term loans are usually taken as you need funds until a large sale is finalised or a job you have been working on is completed.
Simon is working on a project which is going to take him a year to complete and get paid. He does not have enough money to cover the cost of completing the project without it impacting the rest of his business.
He has decided to borrow $50,000.00 to cover the cost of materials and staffing this project. Once the project is completed he stands to receive payment of $120,000.00 so this is of great benefit to him.
The decision has been made to borrow the funds in the short term and he has two options in front of him a short-term unsecured loan or a 5 year loan using his property as security:
|12 Month Loan||5 Year Loan|
|Early Settlement Fee||$0.00||$75.00|
As you can see both loans give Simon access to the fund’s he requires however the 12 month loan comes at a higher interest rate and larger weekly repayments.
Using his property as security and taking the loan over 5 years means he can use the money he receives from his completed project to pay back the loan. He will also have the benefit of his weekly repayments being $889.40 less putting less strain on his cash flow and saving himself $1,734.85 in interest repayments
It is important you take the right loan for your business and these are some of the risk’s:
What you need to look at is the early exit fees from a long-term loan and compare these with the Interest rate you will be paying on a short-term loan. Our early settlement fee is $75 and may be worthwhile taking as the interest rate is likely to be lower.
You can apply for a business loan with Pioneer Finance if you are:
You do need to show that you have the affordability for the loan and that you are who you say you are. You can do this by providing the following:
Depending on the security offered for the loan we may require further information such as rates notice, mortgage statement’s or proof of purchase.
Depending on the security offered we will do checks with the following registers:
Don’t worry if your credit check has a couple of bumps and bruises we may still be able to help you.
Business loans will have various fees attached, which may include:
Some of these fees will be charged to the loan upfront or are calculated in your weekly, fortnightly or monthly installments. Other fees can be charged at the end of the loan term such as early settlement fees or if you used your property as security a caveat removal fee can be charged.
For more details on our fees and charges go to our Interest rates and fees page in the important information section.
That’s easy through our Offices in Wellington & Auckland we cover the whole of New Zealand as a large part of our application process can been done via our website, e-mail and telephone.
If you are over the age of 18 (up to the age of 21 you may require a guarantor), a permanent resident of New Zealand, earn a regular income, and can demonstrate the ability to repay the loan, you may qualify for a personal loan.
We offer loans from $5,000 to $100,000 on a business loan in New Zealand. The amount we lend does depend on the security offered for the loan. The more security offered the better chance we will be able to lend the amount you require. We will also need to check your affordability and credit profile.
Yes. Your credit history may not be as bad as you think. Let us do the background work and we’ll take it from there. You do need to show us that you can afford to pay the personal loan, and you will need security, and may need a guarantor.
Approval time depends on some variables:
In saying that we do endeavour to give a same day answer on all applications received.
Yes, you can make extra repayments; or you can increase your minimum repayment to help pay your loan off earlier. We do charge a small early settlement fee of $75.