applying for an

Unsecured business loan NZ

We use lenders who offer unsecured business loans up to 500k. As an example of how much your business could be eligible for, a lender may base the lend amount on a percentage of your annual turnover. So if your annual turnover is 1.5 million and the lender will lend up to 10% of your annual turnover your business would be eligible for 150k.

To get approved for an unsecured business loan your business will be assessed for its overall health – Cashflow, bank statements assessment, credit check (business and personal). Approval for an unsecured business loan will usually be faster than a secured loan and where a secured business loan is limited to the value of the asset being secured, an unsecured business loan is not. 

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1. What is an unsecured business loan?

An unsecured business loan is a loan that does not require any collateral to be pledged as security for the loan. This means that the lender does not have any assets that they can seize if the borrower defaults on the loan. Instead, the lender relies on the borrower’s creditworthiness and ability to repay the loan to make a lending decision.

Unsecured business loans are commonly used for short-term financing needs, such as working capital or inventory financing.

Interest rates on unsecured business loans are typically higher than on secured loans because of the increased risk to the lender. However, they can be a good option for businesses that are looking for funding but do not want to put up collateral.

It’s important to note that some unsecured business loans may have a personal guarantee from one or more of the business owners, which would mean that the lender could take legal action against the individual(s) if the loan is not paid back.

Unsecured Business Loan NZ

2. Does my business qualify for an unsecured business loan?

The overall health of your business will be assessed when applying for an unsecured business loan. The lender will need to see you are able to meet your repayments and your business bank accounts will be a big part of your chances of approval.

Each lender will look at your account conduct, look for any defaults and whether they have been resolved following the default. If you are already missing payments because your cashflow is poor, how are you going to meet the repayments successfully for a new business loan?

Your cashflow will need to be strong enough to support your repayments and it will be preferable to the lender that your income is not reliant on one income source. If you are sub contracted to one business your contract should help in this case however. If you have not official contract in place and only one income source getting your app approved will be more difficult. 

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Think an unsecured business loan is right for your business?

Chat with us today and we’ll help get you to the right lender. Theres no costs when working with us, just a broker fee included in your loan amount if it settles.

3. Basic requirements for an unsecured business loan

No asset security

You don't need to use a business asset or property as security for an unsecured business loan.

Minimum turnover

Each lender will have minimum turnover requirements, do your research before you apply or use a business loan broker

Pass a credit check

Your business and personal credit history will be assessed. Make sure you have no unresolved outstanding debt as this will lower your chances of approval.

Minimal Docs Required

Generally just 3-6 months bank statements or you may be required to connect your bank account online for assessment.

Loan term

Unsecured business loan terms can be from 3 to 60 months. The longer the term, the less your monthly repayments will be.

Unsecured business loans up to 500k

Each lender is different. Some lenders will loan unsecured up to $50k, some $150k, some $500k.

Interest rate from 9%

You'll get fixed interest rates from 9%. Your interest rate may be slightly higher with an unsecured business loan.

Fast lending decision

Unsecured business loans are usually faster to process so you'll have an answer within 48 hours.

3. Security or a guarantor for a new business loan

A lender will want security for a new business loan. If the business fails in the first few months a lender will need to know that they can get their money back and that will come in the form of security that they can sell. Some lenders will only accept property as security, some will accept vehicles or business assets like stock, machinery, tools and equipment etc.

It is possible to use the business equipment you are buying with the money from the business loan as a form of security. It will depend on the type of equipment whether the lender will accept it as security. If the equipment is a specialist item that would prove too hard to sell easily enough to get their money back you might find they do not accept its use as a form of security.

Property with equity or a vehicle that is owned outright is the easiest, more common form of security used.

Another form of security for a new business loan is external income. If you or your partner have another revenue stream this will lower your risk to the lender. If your new business has a slow month or two, your additional income can be used to assist meeting your loan repayments and business running costs until the business picks up. This is common in the first few months of business as it grows and you are building your clientele.

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4. Check your credit score before applying

Without any business history to assess, a lender will check your personal credit score to help them determine the level of risk if they approved a loan to you.

It is a good idea to check your personal credit score in case there are any unexpected debts outstanding. If there are you can resolve them and increase your chances or approval. Some lenders will not lend to applicants who have recent defaults (3 months to 3 years) so it is important to know which lenders to apply with if you have had past defaults.

We can assist if you are wanting to know which lenders offer business loans for new business. Contact us today and we can see how we can assist.

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5. Complete a Cashflow Forecast

A cashflow forecast shows the lender your potential income and gives them a forecast to help them assess the viability of your business and the ability it will have to pay back the loan.

It is important to have a well prepared cashflow forecast completed by your accountant who can help advise what to include and give your forecast more credibility.

Your cashflow forecast should ideally cover 12 to 24 months and show your projected sales over this period as well as your projected costs.

This will give you a good idea on your monthly revenue and profit after expenses. You should also include any expected business loan repayments in your forecast. Make the forecast as realistic as possible when calculating your earning potential including any quieter or busier months you may have, so you can see exactly how each month is expected to affect your cashflow.

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6. Make sure you can meet your business loan repayments

Your weekly, fortnightly or monthly business loan repayment amounts need to be manageable for your business income.

When you are just starting out, how long will it take to receive payment from products or services? Do you have the cashflow to operate successfully until you receive payment from customers?

Make sure that even in quieter months your income will exceed your repayment amounts. You need to keep in mind any unexpected expenses that may occur.

What happens if your truck breaks down and your business can’t operate until it is repaired, costing you $10,000? So not only do you have an unexpected bill to pay but you miss out on 1 weeks revenue because the truck was in the shop? Can you still meet your business loan repayment obligations?

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7. Get your bank statements in good order

Because there is no financial history for a new business, a lender will assess your personal bank statements when you apply for a business loan for new business.

3 months bank statements is usually required for the application so it is a good idea to ensure your account conduct and spending habits are tidied up to give yourself the best possible chance of being approved.

A lender will look for defaults (and whether they have been rectified), whether your account has gone into overdraft, spending habits such as Afterpay and your general account conduct. If too many flags are raised during this process your loan can be declined so get your account(s) looking as good as you can for the application assessment.

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Business loan lenders in New Zealand

We are partnered with multiple business loan lenders throughout NZ. Each lender provides different types of business loans and will offer different rates for small business loans depending on your business’ financial situation and financial history.

Heres a few lenders we work with and their basic lending criteria.

Get capital small business loans

Fast flexible business finance

• Loans from $5000
• Minimum 9 months trading
• Unsecured to $50k
• 10k or more monthly revenue
• Cashflow, asset, equipment finance

Heartland bank small business loans

Give your business a boost

• Unsecured up to $100k
• Terms up to 5 years
• Secured loans available
• No early repayment fees
• Interest rates from 11%

Fundtap invoice finance nz

Invoice Finance

• 100% online
• Loan off your outstanding invoices
•Funds in 24hrs
• Fast source of cashflow
• Use it when you need it

Pioneer Finance NZ

Your loan, tailored to you

• 100% online application
• Loan terms up to 7 years
• Secured finance
• Finance up to $100k
• Business finance for any reason

efco small business finance nz

We Finance Dreams

• 100% online
• From 8.95%
•Decision in 24hrs
• Startup business loans
• Vehicle finance, asset finance, cashflow loans

Speirs Finance NZ

The kiwi owned team growing kiwi businesses

• Truck Finance
• Repayment up to 5 years
• Heavy Machinery Finance
• 2nd hand asset finance
• Equity Release

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Considering a business loan? We'll get you approved funding from the right lender!