Proper funding is essential for New Zealand businesses of all kinds. You need money to pursue your goals, pay your hardworking team members, keep your operations running and for so many other things. If you need a monetary boost, then business loans are your answer to sufficient funding.
However, obtaining a business loan isn’t as straightforward as simply requesting money and receiving it. You need to present yourself and your business well to lenders, so it’s essential to act professionally when applying for a loan.
Navigating The Business Loan Application Process In New Zealand
What should you do?
Work With A Professional Business Loan Broker. Your best bet is to work with someone who knows what they’re doing. Get in touch with an experienced NZ business loan broker who can offer you personalised support.
You must choose the right lending specialist. Look for a broker who:
- Offers Tailored Services. Your business is unique, so why should you settle for generic services? Your broker must take your particular company, goals and finances into account.
- Understands Business Loan Types In NZ. There are various types of business loans in New Zealand, including asset financing and working capital loans. Your ideal loan type will depend on the stage of your business, your industry and other essential factors. Work with a broker who understands the various funding types, so they can suggest one that best suits your needs.
- Is Communicative. You must work with someone with whom you communicate well. Your business loan broker should speak and listen respectfully, and they should be able to explain potentially confusing concepts to you in an understandable way. Finances can be confusing, so you deserve to work with someone who provides you with clarity.
- Supports You Every Step Of The Way. Your lending specialist should be available to support you when you need them. Consider someone who will help you explore your options, guide you through the loan application process and be available if you need assistance afterwards.
Ask The Right Questions. Before you choose your loan type, loan amount, lender or anything else, go through some questions with your business loan broker so you can both understand your situation better.
- “Why Do I Need Business Loans?” Why do you need extra funding? Think about what you could do with the money and how you could make the most of your loan. Make purchases that yield a good return, allowing you to repay your loan on time. For example, investing that money into an equipment upgrade should improve your product output, increasing your profitability.
- “Can I Afford The Loan Repayments?” Remember that cash flow fluctuates. Your business may experience slow months, but you must still be able to make your loan repayments during this time. Plan well so you always make your payments on time and in full.
- “How Much Interest Will I Pay?” Going for shorter-term business loans or higher repayments can keep interest charges low. Use our online calculator to estimate the cost of interest and repayments.
Prepare Your Finances. Businesspeople who maintain clear and accurate financial records appear more favourable in the eyes of lenders. People who pay attention to their finances, keep records and stay organised are more likely to be reliable when it comes to making repayments and using money well.
Gather the necessary documentation, including balance sheets, cash flow projections and other relevant financial information. Ask your business loan broker about what you should get. They can also ensure that your documentation looks presentable before you submit it, which can prevent misunderstandings and expedite the process.
Understand Your Business Credit Score. Most lenders look at a potential buyer’s credit score right away. Your business and personal credit scores can significantly impact your options, making you appear more or less reliable to lenders.
If you have an unfavourable credit score, your lending specialist can help you find an option that’s better for those with lower credit scores. Or, they can provide you with tips on how to raise your credit score if you can afford to wait before applying for any business loans.
Have A Clear Business Plan. Lenders prefer to lend money to individuals who have properly planned out their financial goals. A well-formulated business plan demonstrates that you’re serious about your endeavours and projects a sense of responsibility and professionalism.
Think about:
- How much money are you borrowing?
- What will you do with the money?
- How will you repay the money?
A professional broker can identify green flags and red flags that lenders may look for.
Look Through Your Options. Never apply to your first option without looking through the rest of your opportunities, even if the first choice seems perfect.
Review your choices with your business loan broker and weigh the pros and cons of each.
Successfully Applying For Business Loans
A business loan can do so much for your business. However, you must act accordingly to improve your chances of success, use your money well and pay your loan payments on time.
We at Spinach are here to help. Contact us on 0800 SPINACH or use our website to message us or learn more. You can also start the application process through our site if you’re ready.
Spinach: Let us help you propel your company forward.