Asset finance for New Zealand businesses.

Asset finance is any business loan secured against a specific physical asset. It covers vehicles, equipment, machinery, livestock, trailers, and qualifying capital assets. The asset is the primary security, registered on the PPSR. NZ asset finance commonly runs $5K to $500K+, terms 1 to 5 years, indicative rates 8% to 16% per annum depending on asset class and lender.

Equipment finance is a sub-category of asset finance, specifically covering equipment, machinery, and qualifying capital purchases. Asset finance is broader and includes vehicles, livestock, trailers, and other physical assets. The mechanics (chattel mortgage, hire purchase, lease structures, PPSR registration) are the same; the difference is the underlying asset class.

Indicative rates run 8% to 16% per annum, depending on asset class, age, term, deposit, trading history, and lender. Major banks price lowest (7% to 12%) on established applications. Specialists like Heartland and UDC sit in 9% to 14%. Higher-risk asset classes (specialist machinery, older equipment) attract the upper end. Newer, more liquid assets (utes, mainstream trucks) sit at the lower end.

Indicative ranges run $5K (small tools, IT) to $500K+ (manufacturing plant, commercial vehicles, agricultural equipment). The achievable amount depends on the asset value, the lender LVR (commonly 80% to 100% on liquid asset classes), trading history, and turnover. Specialist lenders often run higher LVRs on standard asset classes than major banks.

Many NZ asset finance lenders run zero-deposit on common asset classes for established borrowers, but a deposit of 10% to 20% commonly improves the rate by 0.5 to 1.5 percentage points. On older or specialist assets, a deposit is often a lender condition. The deposit size is one of the strongest levers on the offered rate.

Yes. Second-hand vehicles, machinery, and equipment are commonly financed in NZ. Lenders typically cap the asset age at end of loan term (commonly 12 to 15 years total age). Specialist lenders sometimes go older but at higher rates. Used asset finance is the larger volume segment for vehicles in particular.

Four common NZ structures: chattel mortgage (business owns from day one, GST upfront), hire purchase (lender owns until final payment, then transfers), finance lease (lender owns, business rents, residual at term end), operating lease (pure rental, asset returned at term end). The choice depends on GST timing and end-of-term ownership preference. Accountant input is the standard last step.

Interest on asset finance used for business purposes is generally deductible against business income, subject to the accountant's confirmation. The asset itself depreciates at IRD-set rates by category, separately from the loan interest. Where the asset is used partly privately, both interest and depreciation are apportioned.

On default, the lender enforces the security interest registered on the PPSR over the asset. After a statutory notice period, the lender may repossess and sell the asset to clear the outstanding balance. Any shortfall is pursued under the personal guarantee directors typically provide. Asset recovery is generally faster and cleaner than unsecured-loan recovery, which is why secured rates price lower.

On vehicles and high-value mobile equipment, comprehensive insurance with the lender noted as an interested party is widely a settlement condition and required throughout the loan term. The insurance protects both the business's asset and the lender's security position. On lower-value or fixed equipment, the requirement varies by lender. Premiums are part of the true weekly cost of the asset, not just the loan.

Yes, asset finance refinancing is widely available. Common triggers are credit-profile improvement, rate cycle moves, or consolidation of multiple asset loans into one. The most common path is from alternative-lender pricing to major-bank or Heartland pricing after 12 to 24 months of clean repayments. Early-repayment fees on the existing loan are the main consideration.

Yes, sole traders are eligible across NZ asset finance lenders provided they have an active NZBN and clean credit. The application typically references both the business trading history and personal financial position. A clean credit file and 6 to 12 months of trading history are common minimum thresholds; major-bank applications typically require 2+ years.