Why use property to secure business funding?
Unsecured lending is assessed mostly on your business’s recent trading. That works well for established businesses with healthy bank statements, but it leaves gaps. A business that’s new, has had a rough year, carries IRD arrears or needs a larger amount than its turnover supports can struggle to get an unsecured answer.
Property changes the equation. When a loan is secured on New Zealand property, the lender is looking mainly at the equity, not just the last six months of trading. That opens the door to larger amounts, lower-doc assessments and situations other lenders turn away.
What property can be used?
Security can be New Zealand property that you or a supporting party already own:
- Your home.
- A rental or investment property.
- Commercial property, including the premises your business trades from.
- Land, including lifestyle blocks and sections.
The loan can be registered as a first mortgage on an unencumbered property, or as a second mortgage behind an existing lender. You don’t need to refinance your current home loan to access the equity.
What can a top-up pay for?
Because it’s a lump sum, a property-secured top-up suits needs with a clear size and purpose:
- Clearing IRD debt — GST, PAYE, provisional or terminal tax — so penalties stop compounding. See paying IRD on time from a facility.
- Seasonal bridging where the gap is bigger than an unsecured limit would cover.
- Equipment, vehicles or fit-outs bought at auction or on a deadline.
- Acquisition deposits and settlement gaps when buying a business.
- Refinancing expensive short-term debt into one arrangement.
- Working capital for a big new contract before the first payment arrives.
What’s different about the assessment?
- No financials or tax returns for the initial assessment. The lender starts with the property, the purpose and how the loan will be repaid.
- Credit history is considered case by case. Bad credit, defaults and arrears don’t automatically rule you out.
- IRD debt can be refinanced or paid out as part of the loan.
- Speed. Funding is possible within 24 hours of approval in some cases.
How does this sit alongside a line of credit?
Here’s the honest version: we don’t offer a property-secured revolving facility. Property-secured loans are lump sums for a short to medium term. Revolving lines of credit are generally unsecured and based on turnover, for businesses usually trading six months or more.
Many seasonal businesses use both. A property-secured loan clears the big item — the tax debt, the new boat engine, the acquisition deposit — and a smaller line of credit handles the month-to-month swings.
| Property-secured top-up | Business line of credit | |
|---|---|---|
| Structure | Lump sum | Revolving limit |
| Amount | $20,000 to $1m | Based on turnover |
| Security | NZ property | Generally unsecured |
| Trading history | Not the main factor | Usually 6+ months |
| Paperwork to start | No financials or tax returns | Bank statements |
How is repayment planned?
Every property-secured loan needs a clear way out. That might be seasonal income, the proceeds of a sale, a refinance to a mainstream lender once your trading record rebuilds, or the settlement of a large payment you’re owed. Your lending specialist will talk through the exit with you at the start, because a loan with a realistic exit is the right loan.
Supporting parties
If a family member or business partner is offering their property as security, they’re taking on real risk. They’ll need to understand the loan and should get independent legal advice. Good lenders insist on it.
What does it cost?
Every loan is priced on the individual situation: the property, the loan amount, the purpose and the exit. We don’t publish rates. We look for the sharpest option available for your circumstances and set out all costs before you commit.
Start with a quick enquiry
The 60-second enquiry asks what you need and what property is available. It’s free, doesn’t affect your credit score, and a lending specialist will call you back. Prefer to talk? Ring 09 875 4577.