Quick answer
To get a business loan in New Zealand, start by working out what you can show a lender: how long you've traded, your bank statements, GST and income tax filing, your credit file and any property or equipment you could offer as security. Then choose the loan type that fits that evidence, gather the documents, write a short note on purpose and repayment, and make one well-matched application rather than several at once.
Key points
- Your paperwork decides which loans are realistic.
- Filed GST and income tax returns remove the biggest hurdle.
- A short note on purpose and repayment helps every application.
- One well-matched application beats several rushed ones.
Most guides to business lending start with loan types. This one starts with you, because the single biggest factor in which loans you can get is what you can show a lender today. Work that out first, and choosing a loan becomes much simpler. Skip it, and it’s easy to apply for the wrong thing, get declined and lose weeks.
Step 1: Take stock of what you can show
Before you look at a single lender, answer these questions honestly:
- How long has the business traded? Under six months, six to twenty-four months, or longer?
- Is income going through a business bank account? Lenders read statements closely.
- Are GST and income tax returns filed? Overdue returns are the most common hold-up.
- Is anything owed to IRD? And if so, is there an instalment arrangement?
- What’s on your credit file? Check Centrix, Equifax and illion.
- Is there security? Property with equity, or the equipment you’re buying.
Write the answers down. They decide what comes next.
Step 2: Match the loan to your evidence
Different loans rely on different evidence. Broadly:
- Full financials, clean history, two years or more of trading: a bank or mainstream lender, at the lowest cost.
- Steady trading, accounts behind: bank statement lending.
- Self-employed, income hard to document: low doc lending.
- Buying a vehicle or machine: equipment finance, secured on the item.
- Property with equity, paperwork or credit issues: a second mortgage or non-bank first mortgage.
- Short-term, unsecured need: an unsecured business loan sized from your statements.
The right match is the one where your strongest evidence lines up with what the lender relies on most.
Step 3: Fix the quick wins
Some problems take minutes to fix and change everything. File overdue GST returns. Get an IRD statement of account from myIR. Check your credit reports for errors and dispute any that are wrong. If you have a small unpaid default, consider paying it. Separate personal and business spending if the two are mixed. Each of these makes your application cleaner and your options wider.
Step 4: Decide how much and for how long
Borrow for the need, not the maximum offered. Work out the exact amount, including any GST, fees or deposits, and add a modest buffer. Then match the term to the purpose: short for stock or a timing gap, longer for equipment, longest for property or major expansion. Check that the repayments fit your quietest month, not your busiest.
Step 5: Gather your documents
Most lenders will ask for some combination of:
- photo ID for every director or owner;
- your NZBN, company number and IRD number;
- six to twelve months of business bank statements;
- recent GST returns and an IRD statement of account;
- financial statements or IR3 or IR4 returns, if available;
- quotes, invoices or contracts linked to the purpose;
- property details and current mortgage statements, if property is involved.
Our business loan checklist breaks this down by loan type.
Step 6: Write two short paragraphs
The first says what the money is for, with specifics: “$38,000 for a refrigerated van, quote attached.” The second says how it will be repaid: “from current trading, which averages $42,000 in deposits a month.” If there’s anything a lender will find, such as a past default or IRD debt, add a third paragraph explaining it. These few lines make your application far easier to assess.
Step 7: Apply once, to the right place
Applying to many lenders at once feels like it improves your chances, but it usually does the opposite. Each formal application can add an enquiry to your credit file, and lenders become cautious when they see several in a short time. A single application to a lender that suits your situation has a much better chance.
Step 8: Read the offer properly
When an offer arrives, check the total cost over the term, every fee, the repayment frequency, any personal guarantees, what’s being registered on the PPSR, and whether you can repay early without penalty. If something isn’t clear, ask. If it still isn’t clear, get advice before you sign.
An illustrative example
An Invercargill commercial cleaning company, trading for three years, wants $60,000 to buy two vans and cover wages for a new contract. Its annual accounts are six months behind but GST is current. Rather than going to its bank first, the owner takes stock: steady statements, no credit issues, no property to offer. She uses equipment finance for the vans, secured on the vehicles, and a smaller unsecured loan sized from bank statements for the wages, with the signed contract supporting the repayment plan. Illustrative only.
Common mistakes to avoid
- Applying before returns are filed. It’s the most common reason for a decline.
- Borrowing more than needed because it was offered.
- Using a short loan for a long-life asset, which squeezes cash flow.
- Hiding credit issues that the lender will find anyway.
- Signing guarantees without reading them.
When to get advice
If the amount is large, if property or your home is involved, or if the business is under real financial pressure, talk to your accountant before committing. Independent legal advice is wise whenever you’re giving a personal guarantee or a mortgage over property.
What happens after approval
Once you accept an offer, the lender will issue loan documents to sign, often electronically. For equipment finance, it usually pays the seller directly. For property-backed loans, lawyers on both sides handle the mortgage registration with LINZ. Keep copies of everything, set up the repayment from the right account, and put a reminder in your calendar a month before any review or the end of the term so you’re never caught out.
Company, sole trader or partnership
How your business is set up changes who borrows and who’s liable. A sole trader borrows in their own name, so their personal credit file and income are front and centre. A company borrows in its own name, but directors almost always give personal guarantees, so their files matter too. Partnerships can be the most complicated, because every partner may need to sign and every partner’s history may be checked. Our guide to choosing a structure when borrowing explains the differences in more detail, including what changes when you move from one structure to another.
Where to start
Tell us what you need, what it’s for and what you can show a lender right now. Asking won’t mark your file, your enquiry isn’t passed down a list of lenders, and a real person reads it and calls you back to talk through which route fits. Start your enquiry.
Frequently asked questions
How long do I need to have traded?
Many unsecured lenders want six to twelve months. Equipment finance and property-backed loans can work for newer businesses.
Do I need a business plan?
For most small business loans, no. A short note on what the money is for and how it will be repaid is usually enough. Larger or start-up loans may need more.
Will applying hurt my credit score?
A formal application usually adds an enquiry to your credit file. Several in a short time can make lenders cautious, so aim for one well-matched application.
What if a bank says no?
Specialist and non-bank lenders often have different rules. A bank decline doesn't mean every lender will decline.