Your first business loan can feel like a test you didn’t study for. The forms use words like “serviceability” and “security”, everyone assumes you know the difference between a line of credit and a term loan, and it’s hard to tell which questions actually matter. This page is the cheat sheet.
What is a business loan, really?
A business loan is money a lender provides for a business purpose, which you repay over an agreed period along with the cost of borrowing. Business loans in New Zealand generally fall into two camps:
- Unsecured — no specific asset is pledged. The lender relies on your trading, usually needing around six months of bank statements. The amount is based on turnover.
- Secured — the loan is backed by an asset. Through Business Loanz that means NZ property owned by you or a supporting party, for amounts from $20,000 to $1m, as a first or second mortgage.
There’s also a line of credit, which is a limit you draw from and repay as needed rather than a lump sum. First-time borrowers with lumpy cash flow often find it’s a better fit — see line of credit vs lump-sum loan.
The five questions every lender asks (in some form)
- What’s it for? Be specific: an item, a quote, a stock order, a campaign.
- How much, and when? All at once, or in stages?
- How will it be repaid? From normal trading, a seasonal spike, a contract, a property sale?
- What’s the history? Your business’s bank statements and your own credit record.
- What’s the fallback? Security, a guarantor, or other income if things are slower than planned.
If you can answer those in a couple of sentences each, you’re ahead of most first-time applicants.
Jargon buster
| Term | What it means for you |
|---|---|
| Serviceability | Can the business comfortably afford the repayments? |
| Security | An asset the lender can rely on if the loan isn’t repaid |
| First / second mortgage | Whether the lender is first or second in line on a property |
| Personal guarantee | You personally promise to repay if your company can’t |
| Supporting party | Someone (often family) who offers their property as security |
| Line of credit | A reusable limit you draw from and repay |
| Default | A missed payment formally recorded on a credit file |
Mistakes first-time borrowers make
- Mixing personal and business money. It makes your statements hard to read and your business look riskier than it is.
- Borrowing to fix a margin problem. If every sale loses money, more sales lose more money. Funding helps timing problems, not broken pricing. Our unit economics guide helps you check.
- Applying everywhere at once. Multiple credit applications in a short period can look desperate on your credit file. Start with an enquiry that doesn’t affect your score.
- Ignoring the tax calendar. A loan that lands the week before a big provisional tax payment can vanish fast. Map your IRD dates first — see our guide to provisional tax in your first year.
- Hiding a past problem. A default or IRD arrears is much easier to work with when it’s disclosed up front.
How the Business Loanz process works
- Enquire in about 60 seconds. Free, and it doesn’t affect your credit score.
- Talk to a lending specialist. They’ll ask about your business, the purpose and whether property is an option.
- Compare the realistic options. Unsecured, property-secured, line of credit — whichever fits.
- Apply formally if you want to proceed. The lender does its checks with your consent.
- Get funded. Some unsecured decisions come back the same day; property-secured funding can be possible within 24 hours of approval in some cases.
Every loan is priced on your individual situation, and we look for the sharpest option available for it. More detail on how it works.
Example scenario
Example scenario — generic and illustrative only. A Napier landscaper has been self-employed for ten months and has never borrowed for the business. He wants a second-hand tip truck. With ten months of steady deposits, an unsecured option sized to turnover is available; he also owns a home with equity. After talking through repayments on both, he chooses the option that keeps his monthly commitment comfortable through winter, when work slows down.
Ready for your first one?
Start with a no-obligation enquiry. A real person will call you back and walk through it in plain English.