Banks and private lenders both lend to New Zealand businesses, but they work differently. Neither is better in every case. The right choice depends on timing, security and how complete your records are.
How each one assesses a loan
A bank typically looks at financial statements, trading history, forecasts and credit data, and often needs a valuation and committee approval. A private lender such as HomeSec focuses on the property security, the business purpose and the repayment plan, and makes its own decision.
Side by side
| Question | Bank | Private lender |
|---|---|---|
| Decision speed | Often weeks | Can be much faster |
| Records needed | Statements, forecasts, credit data | Property and purpose first |
| Valuation | Commonly required | Not needed to start at HomeSec |
| Credit history | Weighed heavily | Varies by lender |
| Flexibility | Fixed policies | Often tailored to the scenario |
| Cost | Usually lower | Often higher, for speed and flexibility |
When a bank usually fits
A bank is often the better choice when you have time, strong records and a standard purpose. Cost is usually lower, so if you can wait and qualify, ask your bank first.
When a private lender may fit
A private lender may fit when a deadline will not wait for a bank process, when the bank has declined, when records are incomplete, or when you need terms a bank does not offer. Examples include an IRD or supplier deadline, a settlement date, or a time-limited purchase.
A common path
Many owners use a private lender to solve an immediate problem, then refinance to a bank once the business position has settled. HomeSec loans are open-term, so repaying early when the refinance completes is usually straightforward.
Property offered as security may be at risk if a loan is not repaid. Read the contract and consider independent legal advice.