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Property-backed funding

Secured Business Loans: Funding Backed by Property

If your business needs more than an unsecured loan can offer, putting up property or another asset as security can unlock a much larger facility, a longer term, and often a lower rate. Here's how secured business funding works in New Zealand.

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What is a secured business loan?

A secured business loan is business finance backed by an asset. Most commonly residential or commercial property, though other high-value business assets can qualify too.

You don't need to be mortgage-free to use property as security. Many secured business loans in New Zealand are arranged as a second mortgage, so you can access the equity in your property without disturbing your first mortgage or refinancing your whole home loan.

How much more can I borrow with property security?

Offering property or asset security materially changes what's available. Where unsecured lending in the NZ non-bank market commonly tops out somewhere around $150,000-$200,000, secured facilities routinely extend from there up into the millions, with longer terms to match.

  • Typical secured range: $150,000 – $4,000,000+
  • Terms: often up to 5 years, sometimes longer for larger facilities
  • Rates: generally more competitive than unsecured lending
  • Structure: first or second mortgage over property

What lenders check for a secured facility

Because more is at stake for both sides, lenders typically ask for a fuller picture of the business before approving a larger, property-backed facility.

  • Trading history: shorter minimums (as little as around 5 months) can apply to smaller secured amounts; the largest facilities (several hundred thousand dollars and up) typically expect 2-3+ years trading
  • Annual turnover: higher-tier secured lending often expects annual turnover in the hundreds of thousands of dollars or more
  • Property equity: how much equity is available in the property being offered, and its estimated value

Secured vs unsecured: which should you choose?

The trade-off is speed and simplicity versus scale. An unsecured loan is faster to arrange and keeps your property untouched, but caps out at a lower amount. A secured loan takes a little longer to set up (property valuation and legal registration take time) but opens the door to significantly larger, longer-term funding at a generally better rate.

  • Choose unsecured if: you need funds quickly and your amount fits within typical unsecured limits
  • Choose secured if: you need a larger amount, a longer term, or a lower rate, and you're comfortable offering property or assets as security

Frequently asked questions

Do I need to own my property outright to get a secured business loan?

No. Many secured business loans are arranged as a second mortgage, which sits behind your existing home loan and lets you access equity in the property without refinancing or disturbing your first mortgage.

Is a secured business loan cheaper than an unsecured one?

Generally, yes. Because the lender's risk is reduced by the security, secured business loans typically carry a more competitive interest rate than unsecured lending, though the exact rate still depends on your business's financial profile.

How much more can I borrow by offering property as security?

It varies by lender and by the equity available in the property, but secured facilities in the NZ market commonly extend from around $150,000 up into the millions — well beyond typical unsecured limits.

What can be used as security besides property?

Some lenders will register security over other business assets (such as equipment or vehicles) via the Personal Property Securities Register (PPSR) rather than requiring property specifically, though property generally unlocks the largest facilities.

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