The property myth

Walk into a major New Zealand bank and ask for a business loan without property security. The conversation will likely be short. Banks are risk-averse, and for most SME lending they want property as a backstop — your home, your commercial premises, something tangible they can recover if things go wrong.

Non-bank lenders operate differently. They've built assessment models that look at the business itself — its revenue, its cashflow, its consistency — rather than what the owner happens to own outside of it. That's a fundamentally different approach, and it opens up access to capital for thousands of NZ businesses that the bank would turn away.

What unsecured lenders actually look at

1. Trading history

Most unsecured lenders want to see at least 6–12 months of trading. Some require more for larger amounts. This isn't about how long you've been in business for the sake of it — it's about having enough data to assess whether the business is viable and whether the revenue is real.

A business with 6 months of trading has limited history. A business with 3 years has a track record. Lenders will look at both, but they'll have more confidence — and offer better rates — as the history grows.

2. Revenue and cashflow

Revenue is what you earn. Cashflow is whether the money actually moves through your account consistently. Lenders look at both.

A business turning over $50,000 a month that runs consistent positive balances is a stronger candidate than one turning over $80,000 but regularly going negative before the month ends. The pattern matters as much as the number.

Most lenders also look at the DSCR — Debt Service Coverage Ratio. This is simply whether your revenue is sufficient to cover your existing obligations plus the new loan repayments with a reasonable buffer. If the numbers work, the loan gets approved. If they don't, no amount of convincing will change the outcome.

3. Bank statements

Bank statements are the primary document for most unsecured business loan applications. They show everything: revenue, expenses, existing loan repayments, the pattern of the business, and whether the numbers match what you've told the lender.

Most lenders require 3–6 months of business bank statements. For larger amounts, more history may be requested. Clean, consistent bank statements — even with modest balances — are more valuable than impressive ones with irregular patterns.

Practical tip: Before applying, review your last 6 months of bank statements yourself. Look for patterns that might concern a lender — regular overdraft use, large unexplained withdrawals, or inconsistent deposits. Being able to explain these upfront speeds up the assessment process.

4. Credit history

Your personal and business credit history will be checked. Lenders are looking for unpaid defaults, judgements, and patterns of dishonoured payments. A single dishonour in six months is typically manageable. Multiple defaults or unpaid debts are a harder conversation.

If you have a credit issue in your history, disclose it upfront rather than hoping it won't be found. Lenders deal with imperfect credit regularly — how you've managed it since matters as much as the fact it happened.

5. Purpose of funds

Unsecured business loans are flexible — working capital, stock, marketing, staffing, refurbishments, covering gaps. Most lenders simply want to know the funds are going into the business, not into personal use. A clear, sensible purpose helps the application.

How much can you borrow?

Unsecured business loans in New Zealand are available from $5,000 up to $500,000+. The amount you can access depends on your revenue, how the lender calculates serviceability, and your credit profile. As a rough rule of thumb, many lenders will consider up to 50–100% of monthly revenue as an unsecured loan amount — but this varies significantly by lender and situation.

What about rates?

Unsecured business loan rates in New Zealand are higher than secured lending — that's the tradeoff for not requiring property. The exact rate depends on your trading profile, credit history, loan amount, and the lender. Getting assessed gives you a real number rather than a speculative one.

The broker advantage

A broker who knows multiple lenders' criteria can match your application to the most suitable lender before submitting. This matters because every credit application creates an inquiry on your credit file — submitting to multiple lenders yourself runs the risk of multiple inquiries, which can actually hurt your credit score. A single, well-matched submission is a better approach.