Business, commercial and asset finance.

Begin with what the money needs to do

Business borrowing can fund a long lived asset, a commercial property purchase, a temporary cash flow gap, growth or a change in ownership. Those purposes should not automatically use the same product or repayment term.

A vehicle or machine may suit an asset finance facility secured against the item. A seasonal working capital need may call for a revolving limit. Commercial property is normally assessed against the property, lease position, borrower contribution and the business or investment income supporting the debt. Acquisition and development proposals need their own transaction structure.

Homelend starts with the use of funds and the source of repayment. We then consider the amount, required date, useful life of the asset, available security and the evidence a lender will need. That prevents a short term facility from becoming the accidental long term answer to a permanent funding need.

Business loans and working capital

Before borrowing, Business.govt.nz recommends testing whether the business can make repayments during slow periods and at tax time, preparing a cash flow forecast, and understanding the total interest and conditions. Its borrowing money guidance also lists financial records, a cash flow forecast and a business plan among the information a bank may request.

The appropriate facility depends on the pattern of the need. A term loan provides an agreed amount and repayment schedule. A revolving facility or overdraft can support recurring cash flow movements, but requires discipline and periodic review. Invoice or debtor finance may link funding to eligible receivables. The lender's pricing, security, covenants and review conditions matter as much as the approved limit.

We work through the forecast with you and your accountant's figures. The application should explain why funding is needed, when it will be used, how it improves the business position and what repays it if trading is weaker than expected.

Commercial property finance

Commercial property lending is not simply a residential mortgage with a different address. The lender may consider the property type, location, valuation, lease term, tenant quality, vacancy risk, borrower contribution and the income available to service the loan. Owner occupied property also connects the operating business to the property debt.

The facility term and repayment profile can be shorter than a residential mortgage, and conditions may require regular financial information or valuation updates. The actual settings vary by lender and transaction, so we compare written terms rather than publish a generic maximum LVR or loan term.

For an owner occupier, we separate the property purchase from fit out, stock and working capital needs. For an investor, we map the lease income, outgoings, vacancy allowance and wider borrower support. Your solicitor should review the sale agreement, lease and security documents. Your accountant should advise on ownership and tax.

Asset finance for vehicles and equipment

Business.govt.nz describes asset finance as borrowing to pay for a specific asset, with the facility commonly secured against the new or existing asset. It also notes that the borrower should understand the full terms and compare the overall cost, not only the periodic repayment. Read the official types of business funding guide.

The useful comparison includes the purchase price, deposit, term, repayment frequency, interest, establishment and documentation fees, early repayment terms, final payment or residual, ownership position and GST treatment. Tax treatment depends on the facility and business circumstances, so it should be confirmed with an accountant.

Matching the term to the useful life of the asset matters. Stretching repayments can lower the monthly amount but may increase total interest and leave debt after the asset is no longer productive. A short term can reduce interest but put too much pressure on cash flow. We show both effects so the choice is deliberate.

Funding a business purchase or expansion

A lender considering an acquisition normally wants to understand the target business, purchase price, buyer contribution, experience, historical performance, forecast and transaction structure. If vendor finance, earn outs or related party funding are involved, those terms need to be explained rather than buried in the balance sheet.

Expansion funding should connect the amount borrowed to a measurable use: premises, people, stock, equipment, marketing or capacity. The forecast should show when the spending occurs and when the resulting cash flow is expected. We do not create the commercial forecast for the business, but we help translate the agreed plan into a lender ready funding request.

Security and guarantees

Business finance may be secured by the purchased asset, business assets, commercial property, residential property or a combination. Directors or owners may also be asked for guarantees. Security affects risk beyond the interest rate.

Before accepting terms, identify which assets are being secured, which entities owe the debt, who guarantees it, what financial reporting is required and what could trigger review or default. Legal advice is essential for security and guarantee documents. Our role is to make sure the lending recommendation and application describe the structure clearly.

What to prepare

A lender ready file commonly includes:

1. A concise explanation of the funding purpose, amount and timing.

2. Recent financial statements and current management accounts.

3. A cash flow forecast with the proposed repayment included.

4. Bank statements and schedules of existing debt.

5. Quotes, sale agreements or asset details supporting the amount requested.

6. Ownership, director, trust or company information relevant to the borrowers and guarantors.

7. Details of security offered and any existing lender claims over it.

8. A fallback plan if the forecast is delayed or the asset costs more than expected.

Business.govt.nz explains that cash flow statements show how money moves through a business and help track its available cash position. Its cash flow statement guidance is a useful starting point before a funding discussion.

Compare the facility, not just the headline rate

We compare lenders that can consider the purpose and present the trade offs in plain language. That includes interest, fees, term, repayments, security, guarantees, covenants, review dates and conditions before drawdown. The cheapest looking offer can be poor value if it cannot meet the transaction date or places the wrong assets at risk.

If the funding relates to a build or project, read about construction and development finance. If residential property supports the wider position, see home loans and refinancing. To discuss a current proposal, contact Homelend.

This page provides general information only. Business, tax and legal outcomes depend on the specific transaction. Obtain advice from your accountant and solicitor before committing to a facility or security arrangement.