How to Choose The Right Business Loan in NZ

choosing the best business loan in nz for your business.

Establishing a business is both exciting and nerve-racking. Before taking the leap, you will need to first consider many aspects of the business world, including comparing business loans in New Zealand that will fit your needs.

Business loans can be used for multiple purposes when establishing a business, as well as for use throughout the life of that endeavor. Whether you need one to give you a head start toward financing your dreams, or to help you make some later investments for the growth of your company, a business loan can be extremely beneficial.

The first thing you will need to consider before applying for a loan is the purpose behind the loan. What benefit will it give you and your business?

Your answer to this question will help you to narrow down your search considerably. Business loans are not one-size-fits-all. To give you a head start toward figuring out what kind you will need, check out the types of business loans and find companies on this list that can help you reach your goals.

Qualities of The Best Business Loans in 2021

Each lender has a very specific set of terms, which makes each business loan unique. Overall, these are the qualities to look for when researching the best business loans in NZ.

– Competitive interest rates and fees. Business loan interest rates fluctuate every day, and can be different from one lender to the next. Additionally, the fees associated with a loan will vary.

– Time to fund. Lenders can take as little as a few hours to several days to release the funds into the borrower’s account.

– Flexible repayment terms. It depends on the lender how long the repayment terms will be. Some may offer up to 72 months for repayment, while others offer 48 months.

– High maximum loan amount options. Because lenders themselves must consider what is best for their own businesses, they must adjust their terms accordingly. And the loan amounts will also vary, from high to low.

Business Loan Types in NZ

Businesses in NZ have access to a wide range of loan types. Each one has its specific purpose and is broken down into the following categories.


Simply put, unsecured business loans are those that do not require any collateral from the applying business or business owner. The approval decision is based on the applicant’s credit history.


A secured business loan does require some kind of collateral. If a business defaults on its loan, the lender can seize the collateral and use it as a form of payment.

Revolving Line of Credit

A revolving line of credit, also known as an open-end credit, allows businesses to borrow up to the approved maximum during a specified term. One example would be a business credit card that requires a minimum payment at the end of each billing cycle. Revolving credit lines can be either secured or unsecured.

Non-Revolving Line of Credit

A non-revolving line of credit is a safeguard for businesses that may not need to borrow the full amount of an approved loan. It charges interest on only the portion that is borrowed, when it is borrowed. Each draw of credit is converted into a separate loan with predetermined repayment terms. Non-revolving credit lines can be either secured or unsecured.


Peer-to-Peer lending (P2P) enables individuals to borrow directly from investors, and cuts out the middleman financial institution. Investors get to see and decide which loans they want to fund.


Government business loans in NZ include the Small Business Cashflow Loan Scheme (SBCS), which is available for businesses that have been negatively impacted by COVID-19. Business owners desiring to apply for this loan must employ 50 or fewer full-time employees. This type of loan is interest-free for up to two years.

5 of The Best Companies that Offer NZ Business Loans

Use this guide to find the best business loans for your needs. The options listed below describe what the top five companies have to offer, so you can narrow down your search for small business loans in NZ.

1. Zip Business

Zip Business allows for fast and convenient applications for business loans in NZ. Use Zip loans to hire new employees, drive sales with greater marketing outreach, and upgrade business spaces or systems. Businesses must have an annual revenue of at least $200,000 to qualify.

Loan amounts offered: $10,000 up to $500,000.

How much does it cost?: 0.5% to 2.5% per month, plus an origination fee of 2-3%.

Types of loans available: Unsecured, non-revolving credit line.

Business requirements: Must have been operating for a minimum of 18 months, have an online bank account in New Zealand, and have a New Zealand Business Number.

Documents needed include bank transactions for the last 36 months, a balance sheet of the last two years, profit and loss statements for two years, and GST returns for up to 15 months.

Features: A line of credit becomes a loan once you start using it with Zip, but it does have various options, depending on how long you want to use the money. It also offers early repayment options with no penalties.

2. Prospa

Prospa is popular for New Zealand business owners looking for loans. This company has helped more than 29,000 small businesses so far. Prospa helps these businesses with growth opportunities, business renovations, and the purchase of new equipment.

Loan amounts offered: $5,000 to $300,000.

How much does it cost: There is an origination fee of 3.5% of the business loan. Interest rates vary.

Types of loans available: Unsecured on up to $100,000, and secured on up to $300,000.

Business requirements: Turnover of $6,000 per month or more and at least 6 months of trading. A driver’s license, a NZ business number, and up to six months of bank statements are required to apply.

Features: Early payout options and funding are possible within 24 hours.

3. Harmoney

Harmoney is a financial institution specializing in personal and business loans. This company offers startup business loans in NZ, has been a Canstar winner for five years in a row, and boasts a 4.7/5-star review on Google. Use its small business loans for inventory stock-up, to cover for registrations, or to just bring in a short-term cash flow.

Loan amounts offered: $2,000 to $70,000.

How much does it cost?: Interest rates range from 6.99% to 24.69%. There is an origination fee of $200 or $450, depending on the loan amount.

Types of loans available: Unsecured.

Business requirements: Business loans with Harmoney are just like personal loans; applicants will be informed every step of the way which documents are required. Applicants must be at least 18 years old, be NZ citizens or permanent residents, and have a stable income.

Features: There are no early repayment penalties, and Harmoney offers fixed rates for the life of the loan.

4. Lending Crowd

Lending Crowd representatives say that they remove the bureaucracy from loans and take the side of the small business. This company’s goals are to help the small and medium businesses that make up 85% of New Zealand. Lending Crowd’s business loans can be used for a variety of business needs.

Loan amounts offered: Up to $200,000.

How much does it cost?: Interest rates begin at 5.03%.

Types of loans available: Peer-to-Peer.

Business requirements: Business must have been in operation for more than 18 months, hold a good credit history, and have at least $80,000 in annual revenue. Applicants must have full ownership over the business.

Features: This company offers flexible payment options, no early repayment fees, and a simple solution to getting a business loan in NZ.

5. ScotPac

ScotPac helps businesses get funding quickly. This is beneficial for companies that need stock or inventory to continue fulfilling orders. It utilizes telegraphic transfer, letters of credit, or documents against payment in order to complete transactions with businesses.

Loan amounts offered: $5,000 to $2,000,000.

How much does it cost?: Variable interest rates.

Types of loans available: Unsecured, revolving credit lines.

Business requirements: No specifics listed.

FeaturesScotPac Trade Finance offers an open-end credit for the purchase of business goods, options to fund finished goods, and solutions for extending payment options to customers.

ScotPac Tradeline funds businesses with an open-end credit, allowing them to pay for goods only after they have been sold.

Neither option requires a minimum term or contract.

5 Tips to Help You Pick The Right Business Loan (and Get Approved for It)

Now that you know the options, how do you choose the right one for your specific needs? You know it’s the right business loan if:

– You understand the loan types. Categorizing your loan needs under one of the six listed types can lessen confusion when choosing a lender.

– Your business meets the minimum requirements. An easy way to eliminate the lenders that won’t work for you is to know if your business meets its minimum requirements before you apply.

– You have compared interest rates. You will be able to save yourself the most money if you first compare the best loan interest rates, with any additional fees they carry. The lowest interest rate with the shortest repayment plan will save you the most in the long term.

– You can afford the payments. The quickest way to get yourself in trouble is to pick a repayment plan you can’t afford. Choose the best route that your business can reasonably handle.

– You’ve outlined a detailed plan for the funds. With some lenders, you might be able to get approved or negotiate a lower rate by providing a plan showing how the funds will be used to grow your revenue.

Your Business Plan and Progress Will Determine How Much Money You Can Get

Even the best-laid plans can sometimes go awry. In that case, a business loan could be the best option for you and your company. Determine the right plan of action for you to tackle any unforeseen situations, or simply grow your business. A loan can help propel a business to the next level.

While researching your business loan options, consider getting quotes from multiple lenders. This will help you to keep track of the various rates, fees, and repayment plans that are available to you. Each lender’s rates and fees will vary, so finding out who can offer you the best deal will be a smart business decision.

From unsecured to secured, to peer-to-peer business loans, there are many options available to meet the most unique business need. Business loans in NZ are structured to help businesses succeed; take advantage of one of the many options that are available.

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