Frequently Asked Questions
For businesses
What Determines The Loan Interest Rate?
Business loan interest rates vary due to factors including the amount borrowed, what business assets the funds will be used for, the industry the business operates in, how long the business has been running, whether the business has sufficient cash flow to support the loan, and the overall ‘health’ or creditworthiness of the business.
How are loans funded?
Upon your submission of the required documents, our loan specialist will propose a set of terms relating to Interest Rate, Establishment Fees & Legal Fees in an Offer Letter. Once the Offer Letter is accepted by you, Blossum will put the financing request up for funding on our platform.
Our investors will receive a notification on the upcoming financing opportunity, and they will choose to invest various amounts until the required loan amount is reached.
Blossum will then disburse the loan sum to you on the next working day.
What are the costs and fees involved?
There are no fees for application or assessment of your financing request. We only charge a service fee upon the successful disbursement of your loan, to cover our efforts in conducting the relevant credit checks.
As the service fee depends on many factors such as the financial product, complexity and quantum, we can only narrow down the range upon the submission of documents during your application.
Can I apply for another loan if I already have an active loan with Blossum?
Yes, you may apply for a subsequent loan with Blossum subject to another round of credit underwriting, especially if it has been some time has passed since the initial loan.
However, as this will be considered another loan, you may be required to pay off the full outstanding amount of the existing loan before a new loan is extended. This depends on the conditions set by the credit team.
Can I make an early repayment?
You can choose to repay the entire amount of your loan early at any time.
If you decide to do this please speak to our friendly business loan specialists. They will provide you with repayment details and an early payout figure. This will be calculated as the total of the remaining principal amount and any accrued interest at the date of early payout, plus 1.5% of the remaining principal and any outstanding fees.
How may I refer an SME?
Did you know that 7 out of 10 SMEs face challenges when looking for business loans? Engage with Blossum as a referral partner and earn extra cash this year by referring any associates who might be looking for a business loan.
You can submit their details here, or drop us a call at +(64) 22 319 0922 on Mondays to Fridays, from 9am to 6pm.
For Investors
What does debt investment lending mean?
Debt investment lending is a way to raise money, awareness, and support for a project or a business from the people around you. It’s all about how you persuade each individual to give you a small donation or capital for your project or idea.
Debt investment lending allows people with great ideas but lack of financing to raise the money they need to turn their initiatives into reality. In return, the donors and investors will get rewarded.
Why do companies borrow from Blossum?
Many SMEs do not have many assets to pledge, but are very cash flow positive. Unfortunately for these companies, or if they’ve already reached the maximum limit on their bank facilities with no more assets to pledge, securing funding can be a difficult ride.
Is there a minimum investment amount?
Investments on the platform start at NZD$10,000
Does Blossum charge a service fee?
We don’t charge any fee for investors.
Are the interests earned taxable?
All returns on investments with Blossum as subject to resident withholding tax. This is applicable for NZ tax residents. Foreigner investors are subject to non-resident withholding tax. Find out more here.
Making a Deposit
If this is your first deposit, the minimum amount to transfer is NZD$10,000 and subsequent deposits can be of any amount. We recommend maintaining a balance of at least $10,000 to ensure sufficient funds to invest in our note volumes.
Our credit assessment explained
Credit assessments are based on the SME’s and buyer’s (in case of invoice financing) ability and willingness to pay.
For assessing ability, Blossum looks at a number of financial tools to evaluate the credit worthiness of an SME. Much of the evaluation relies on analyzing the SME’s P&L, balance sheet, cash flow statements, inventory turnover rates, debt structure, management performance, and market conditions with the context of the note quantum and tenor.
To assess credit worthiness, Blossum looks into the history of trustworthiness, moral character, and continued performance that demonstrate a debtor’s ability to repay. Mainly via the SME’s and PGs’ past credit obligations, repayment records and litigation (if any).
What is auto-invest?
Note Selection
Our algorithm works by first running through all the filters to see which investors have the settings that match the note. Then it will check the total amount of all investors that are on auto-invest. However, the entire note amount will not be open for auto-invest. A percentage of the note amount (between 10%+) will be left open for funding.
Available Balance
When your available balance is lower than the minimum auto investment amount you have specified, you can still be auto-invested if you have selected to exhaust your balance. However, to ensure that you can participate in as many notes as possible, do maintain a healthy available balance.
E.g. of selecting to exhaust your balance: If you specified a minimum auto-investment amount of $10,000 but your available balance is $8,000, you will be able to exhaust your balance of $8,000 if your balance falls within the minimum and maximum investment limits of the note.
Priority
If there really are too many investors on auto-invest and the note amount is not enough to accommodate all investors, the system will prioritise the investors who were not auto invested recently. This is to be fair to our investors, to give everyone an opportunity to invest however much they have deposited with us.
Investing
However, not getting auto-invested into the note does not mean you cannot invest. You can always participate when the note is open for investing! Similarly, if you wish to top-up the amount that you were auto-invested, you can do so during the funding round!
Note: Changes made to your auto-investment preferences when any note is up for Pre-CF will only take effect the next funding round.
What happens in the event of early repayment?
If the borrower repays early, Blossum will return all of the investor’s funds plus any accrued interest. The full amount is paid back to the investor as soon as we receive it from the borrower. You will then be able to redeploy funds into another investment if you choose to do so.
