Light commercial vehicles
Utes, vans, light trucks. The single biggest asset class. LVR up to 100% on common models. Rate 8% to 13%.
Loan type
Asset finance for New Zealand businesses.
The broader category that covers vehicles, equipment, machinery, livestock, and trailers. Asset-secured lending across $5K to $500K+, with indicative rate bands and the four common structures.
Last reviewed 5 May 2026
Indicative repayment
Weekly
$596/week
$2,585 /month $24,059 total interest
$100,000
$5,000 $500,000
4 years
6 months 5 years
11.00% p.a.
8% (secured) 30% (unsecured)
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
Your $100,000 scenario
4 years at 11.00%. Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
Educational
Indicative only. Why we say this
Quick answer
What you need to know about NZ asset finance.
- Umbrella category covers vehicles, equipment, machinery, livestock, trailers, and qualifying capital assets.
- Asset-secured the asset itself secures the loan; lower indicative rates than unsecured.
- Indicative 8% to 16% rate band depends on asset class, age, and lender. Lower for liquid assets like utes; higher for specialist machinery.
- Four structures chattel mortgage, hire purchase, finance lease, operating lease. Pick by GST and ownership timing.
What it is
The umbrella for NZ asset-secured business lending.
Asset finance is the umbrella term for any business loan secured against a specific physical asset. It covers vehicles (utes, trucks, vans, fleet), equipment (kitchen, machinery, IT), livestock, trailers, and qualifying capital equipment. The asset itself is the primary security, which keeps indicative rates lower than equivalent unsecured term loans (commonly 8% to 16% depending on asset class).
The single largest sub-segment by volume in NZ is light commercial vehicle finance (utes, vans, light trucks) bought by tradies, field-services businesses, and rural operators. Heavy commercial vehicles, agricultural machinery, and commercial kitchen equipment make up the next bands. Specialist asset finance covers livestock (Heartland Bank specialty), aircraft, marine, and bespoke industrial machinery.
UDC Finance, Heartland Bank, the four major banks, and specialists like Pioneer Finance and MTF Finance dominate the NZ asset-finance market. Each lender has a different sweet spot in asset class and amount band.
Amount
$5K to $500K+
Term
1 to 5 years
Security
The asset itself
Rate band
8% to 16% indicative
Asset categories
Six main asset finance categories in NZ.
Each asset category has its own rate band, LVR, and lender preferences. Vehicles and mainstream machinery price at the lower end; specialist or fast-depreciating assets at the higher end.
Heavy commercial vehicles
Trucks, prime movers, refrigerated trailers. Specialist lenders. Rate 9% to 14%, longer terms (up to 7 years).
Industrial machinery
CNC, manufacturing plant, packaging. Lender appetite varies by asset class. Rate 10% to 15%.
Commercial kitchen
Combi ovens, fridges, espresso machines, prep benches. Hospo specialty. Rate 10% to 14%.
Agricultural and livestock
Tractors, milking plant, irrigation, livestock. Rural specialists like Heartland and major banks. Rate 8% to 12%.
Medical and dental
Imaging, dental chairs, sterilisation. Specialist lender territory. Rate 10% to 14%.
GST and tax
Structure choice decides the GST timing.
On a chattel mortgage or hire purchase, the GST-registered business is treated as the asset owner and can typically claim the full GST component upfront in the next GST return. On a finance lease, GST is typically claimed across the rental payments instead, subject to the accountant's confirmation. On an operating lease, GST is typically claimed on each rental too, subject to the accountant's confirmation. The structure choice affects cash-flow timing materially; the headline rate is similar across them. The accountant's confirmation on the specific structure is the standard last step.
Rate and LVR by asset class
Indicative pricing across the NZ asset finance market.
Two things move the offer more than anything on the application form: how liquid the asset is on the second-hand market, and how fast it loses value. A five-year-old Hilux has thousands of comparable sales behind it and a lender can model recovery within a few hundred dollars. A five-year-old CNC lathe has a resale market of perhaps a dozen buyers in the country. The bands below are observed across major-bank asset finance divisions and NZ specialists as at 2026.
| Asset class | Indicative rate | LVR new | LVR used | Typical term |
|---|---|---|---|---|
| Light commercial (utes, vans) | 8% to 13% | Up to 100% | 80% to 95% | 3 to 5 years |
| Trucks and prime movers | 9% to 14% | 90% to 100% | 70% to 90% | 4 to 7 years |
| Trailers and towed plant | 9% to 14% | 80% to 95% | 65% to 85% | 3 to 5 years |
| Mainstream agricultural plant | 8% to 12% | 80% to 100% | 70% to 90% | 4 to 7 years |
| Livestock | 8% to 12% | Herd-value based | Not applicable | Seasonal to 3 years |
| Commercial kitchen | 10% to 14% | 75% to 90% | 60% to 80% | 3 to 5 years |
| Industrial machinery (CNC, plant) | 10% to 15% | 70% to 90% | 60% to 80% | 3 to 5 years |
| Medical and dental | 10% to 14% | 70% to 85% | 60% to 75% | 3 to 5 years |
| IT and office hardware | 11% to 16% | 70% to 85% | 50% to 70% | 2 to 3 years |
Indicative bands only, not an offer of credit. The actual rate and LVR are set by the lender after credit assessment and depend on the borrower profile, trading history, deposit, asset condition, and the specific resale market for that asset.
Where it fits
Where asset finance works, and where it does not.
Asset finance tends to suit
- A purchase with a clear physical asset behind it, where the asset can carry the security rather than the balance sheet.
- Businesses that want to preserve an existing overdraft or line of credit for trading rather than spending it on a capital item.
- Borrowers who would price poorly unsecured. The gap between an indicative 8% to 16% secured and 12% to 25% unsecured is the widest single saving available on most equipment purchases.
- GST-registered businesses buying under a chattel mortgage, where the GST component is typically claimable in the next return rather than across the rentals.
- Sole traders and newer companies with a thin balance sheet but a good asset. The asset commonly does more work in the assessment than the trading history does.
- Replacement cycles that are predictable, where matching the loan term to the useful life keeps the repayment and the asset roughly in step.
Asset finance tends not to suit
- Mixed-purpose borrowing. If the money covers wages, stock, and a van, no single asset supports the whole facility and a term loan is the closer fit.
- Assets with a thin or specialised resale market. Fit-out, joinery, and bespoke plant are commonly declined as asset finance or funded at a low LVR because there is little to repossess.
- Fast-moving cash-flow gaps. Asset finance settles in days rather than hours and is tied to a specific purchase, so it does not do the job an overdraft does.
- Businesses that expect to sell the asset before the term ends. Early settlement can carry a break cost, and clearing the PPSR registration is a step in the sale.
- Short-hold or rapidly obsolete equipment, where an operating lease that hands the residual-value risk back to the lender is often the more honest structure.
- Purchases small enough that the documentation and PPSR registration cost more in time than the rate saving returns.
Worked examples
Three New Zealand asset finance scenarios.
Three businesses, three asset classes, three different reasons the structure landed where it did. Figures are indicative and calculated on the assumptions stated in each scenario.
Civil contracting, 6 years trading, 4 staff, turnover around $1.4M
A Hamilton drainlaying contractor buys a second excavator
The business has been hiring a 5-tonne excavator roughly 30 weeks a year at an indicative $1,100 a week, which is around $33,000 annually going out the door with nothing owned at the end of it. A three-year-old machine at $145,000 plus GST changes that arithmetic.
A chattel mortgage over 5 years at an indicative 10.5% with a 10% deposit puts the weekly repayment at roughly $700 on these assumptions. That is materially below the hire cost in the weeks the machine works, and the business carries it in the weeks it does not. The GST component of around $21,750 is typically claimable in the next return where the business is GST-registered and the asset qualifies, subject to the accountant confirming the treatment.
The lender registered a security interest on the PPSR over the machine and took a director guarantee. Comprehensive insurance with the lender noted was a settlement condition.
Indicative figures
- Asset price (ex GST)
- $145,000
- Deposit
- $14,500 (10%)
- Amount financed
- $130,500
- Indicative rate
- 10.5% p.a.
- Term
- 5 years
- Indicative weekly
- ~$700
Dairy, 180ha effective, 12 years owner-operated
A Taranaki dairy farm finances a herd expansion
Livestock is one of the few asset classes where the security is alive, moves, and is counted rather than serial-numbered. Heartland Bank and the major banks both fund it, and the assessment leans on herd records and the milk-payout position rather than on a supplier invoice.
The farm funded 120 in-calf heifers at an indicative $2,100 a head, which is $252,000. Structured seasonally at an indicative 9%, with repayments weighted toward the peak payout months rather than spread flat across the year. That seasonal shaping is the point of the product: a flat weekly repayment on a business with a lumpy payout is a cash-flow problem the borrower did not need to buy.
Livestock finance carries a risk that plant finance does not. The security can die. Lenders commonly require the herd to be insured and the security to cover progeny, and the herd count is verified at intervals across the term.
Indicative figures
- Head financed
- 120
- Indicative per head
- $2,100
- Amount financed
- $252,000
- Indicative rate
- 9.0% p.a.
- Structure
- Seasonal repayments
- Indicative annual cost
- ~$22,700 interest, year one
Precision engineering, 11 years trading, 9 staff
A Christchurch engineering shop replaces a CNC lathe
The existing lathe is 14 years old and the tolerance it holds has been drifting, which is starting to show up as rework on aerospace-adjacent jobs. A replacement at $210,000 plus GST is the kind of purchase where asset finance prices worse than a ute and better than an unsecured loan, for reasons that have nothing to do with the borrower.
The resale market for a used CNC lathe in New Zealand is small. Lenders price that in: the indicative offer came back at 12.5% with a required 20% deposit, against the 8% to 10% the same business would see on a work vehicle. The LVR on specialist machinery commonly sits at 70% to 80% for that reason.
On these assumptions the weekly lands near $860 across 5 years. Where the machine removes a rework cost the business can actually measure, that comparison is the one worth doing before the rate comparison.
Indicative figures
- Asset price (ex GST)
- $210,000
- Deposit
- $42,000 (20%)
- Amount financed
- $168,000
- Indicative rate
- 12.5% p.a.
- Term
- 5 years
- Indicative weekly
- ~$860
If it goes wrong
What default on NZ asset finance actually involves.
Asset finance is secured lending, and the security is a specific thing the lender can come and take. That is why it prices below unsecured, and it is also the part borrowers are least often walked through before signing. The sequence below is the common shape rather than any one lender procedure; the loan agreement is the authoritative document.
A missed payment
A single missed repayment is usually handled by the lender contacting the business, and many will restructure or defer where the cause is a timing problem rather than a solvency one. It is commonly recorded against the credit file once it passes 30 days.
What happens:Credit-file mark, possible default interest
Formal default and notice
Once the arrears pass the threshold in the agreement, the lender issues a formal notice setting out the amount owing and the time available to remedy it. The Personal Property Securities Act sets the notice requirements where the lender intends to enforce.
What happens:Statutory notice period runs
Repossession of the asset
On an unremedied default the lender may take possession of the asset its PPSR registration covers. On vehicles and mobile plant this is generally straightforward, which is precisely why those classes carry the lowest rates and the highest LVRs.
What happens:Asset removed from the business
Sale and the shortfall
The lender sells the asset and applies the proceeds to the balance. Where the sale does not clear the debt, the remaining shortfall stays owing. Fast-depreciating assets financed at a high LVR are where a shortfall is most likely, because the debt can outrun the resale value early in the term.
What happens:Any shortfall remains a debt
The personal guarantee
Most NZ asset finance is written with a director guarantee. Where a shortfall survives the asset sale, the lender may pursue the guarantor personally, and that claim is not limited to the business assets.
What happens:Personal liability for the balance
The deposit is doing more work here than the rate comparison suggests. A larger deposit keeps the loan balance below the asset value for longer, which is the gap that decides whether a repossession clears the debt or leaves a shortfall attached to a personal guarantee.
Compared to alternatives
Asset finance vs alternative funding routes.
Asset finance competes against unsecured term loans, operating leases, and outright cash purchase for any specific asset acquisition.
| Feature | Asset finance | Unsecured term loan | Operating lease | Cash purchase |
|---|---|---|---|---|
| Indicative rate | 8% to 16% p.a. | 12% to 25% p.a. | Embedded in rental | Opportunity cost only |
| Security | The asset (PPSR) | Director PG | Lender owns asset | None |
| Ownership at term end | Owned | No asset link | Returned | Owned (immediate) |
| GST timing | Upfront on chattel mortgage | On asset purchase | Across rentals | Upfront in next return |
| Cash flow at settlement | Deposit only | Loan to bank account | First rental | Full purchase |
| Suits | Standard assets, asset-tied | Mixed-purpose loans | Predictable opex | Cash-rich businesses |
How it works
A typical NZ asset finance application.
Asset finance applications run faster than unsecured because the asset is doing most of the security work. Standard process for amounts under $150K from established borrowers.
01
Day 1
Get a supplier quote
A firm quote from the asset supplier on letterhead, identifying the asset by make, model, year, and VIN where applicable, with GST-inclusive and ex-GST prices.
Documents commonly required
- Supplier quote on letterhead
- Asset specifications
02
Day 1 to 2
Submit application
Standard application: NZBN, business owner ID, last 6 months business bank statements, supplier quote, loan purpose. Larger amounts add P&L and cash-flow forecast.
Documents commonly required
- NZBN
- Director ID
- Bank statements
- Quote
- Purpose statement
03
Day 1 to 5
Credit assessment and offer
Lender runs credit check, assesses affordability, verifies asset against allowable list. Offer with rate, fees, weekly repayment, term, security conditions.
04
Day 2 to 7
Settle and deliver
On acceptance, the lender registers a security interest on the PPSR over the asset. Funds typically pay the supplier directly. Insurance is commonly a settlement condition for vehicles. Asset delivered, loan term begins.
Documents commonly required
- Loan agreement
- Comprehensive insurance
- PPSR registration
Common pitfalls
Five things that cost NZ borrowers money on asset finance.
None of these show up in a rate comparison, and all five are commonly raised after the fact rather than before.
A term longer than the asset
Stretching an IT purchase to 5 years or a used van to 7 leaves the business paying for something it has already replaced. Matching the term to the working life of the asset costs more per week and less in total.
Comparing rate without fees
Establishment fees, PPSR registration, monthly account fees and dealer origination fees vary widely between NZ lenders. Two indicative 11% offers can carry a materially different total cost once the fee schedule is read.
Missing the GST timing
The GST treatment differs between a chattel mortgage and a lease, and the difference on a $150,000 purchase is roughly $22,500 arriving in the next return or spread across the rentals. The accountant is the right person to confirm which applies.
Insurance treated as an afterthought
Comprehensive cover with the lender noted is commonly a settlement condition on vehicles and mobile plant, and the premium is part of the real weekly cost. A quote taken after the loan is approved sometimes changes whether the purchase works.
Financing to the maximum LVR
A zero-deposit loan on a fast-depreciating asset puts the balance above the resale value for much of the early term. That gap is what turns a repossession into a shortfall attached to a personal guarantee.
End of term
What happens when an asset finance term ends.
The end of the term looks different under each of the four structures, and this is commonly the part that is skimmed at signing and remembered at year four. Under a chattel mortgage the business already owns the asset and the final payment simply clears the loan; the lender then discharges the PPSR registration, which is the step worth checking has actually happened before the asset is sold.
Under a hire purchase the lender holds title until the final instalment, at which point ownership transfers. The practical difference from a chattel mortgage is typically small, and it mainly shows up in how the asset is treated on the balance sheet during the term.
A finance lease commonly ends with a residual, sometimes called a balloon, which is a lump sum set at the start and payable at the end. The residual keeps the weekly repayment down across the term, and it is a real payment that falls due on a known date. Refinancing the residual is possible and widely done, though it extends the total interest paid on an asset that is by then several years old.
An operating lease ends with the asset going back. The residual-value risk sat with the lender for the whole term, which is the reason the rental is higher and the reason the structure suits equipment that dates quickly. Return conditions on fair wear and tear are set in the agreement and are worth reading before the asset has been through five years of site work.
Refinancing before term end is common in New Zealand, most often after 12 to 24 months of clean repayments have moved the business from alternative-lender pricing into major-bank or Heartland territory. Early-repayment costs on the existing facility are the main figure to put against the saving.
Lenders to know
NZ asset finance lenders.
NZ asset finance is dominated by specialists alongside major-bank asset finance divisions. Each has a sweet spot in asset class and amount band.
Best for asset finance up to $500K
Heartland Bank
Registered NZ bank with deep asset finance specialty. Strong on light commercial, trucks, machinery, livestock.
Indicative rate band:9% to 14% p.a.
Read onBest for long-established asset finance
UDC Finance
Long-standing NZ asset finance specialist. Strong coverage across utes, trucks, machinery, agriculture.
Indicative rate band:8% to 13% p.a.
Read onBest for vehicles and dealer-finance
Pioneer Finance
NZ specialist for vehicle and asset finance through dealer/originator network.
Indicative rate band:9% to 14% p.a.
Read onBest for vehicle finance via originators
MTF Finance
Vehicle and asset finance through MTF originator network. Common path for utes and vans.
Indicative rate band:10% to 15% p.a.
Read onBest for best rate for established borrowers
Major banks (ANZ/ASB/BNZ/Westpac)
Each major bank runs an asset finance division. Lowest pricing, longest application.
Indicative rate band:7% to 12% p.a.
Read onReferences
Sources
- IRD: Depreciation rates
IRD schedule of rates for depreciating assets, by category.
- IRD: GST and your business
GST claim timing on asset finance structures.
- PPSR (NZ)
Where asset finance security interests are registered.
- Heartland Bank: Asset Finance
Indicative rate band reference.
- UDC Finance
NZ asset finance specialist; pricing reference.
FAQ
Asset finance, NZ small-business questions answered
What is asset finance in New Zealand?
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.
How is asset finance different from equipment finance?
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.
What rates does NZ asset finance charge?
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.
How much can I borrow with asset finance?
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.
Do I need a deposit?
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.
Can I finance a second-hand asset?
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.
What structures are available?
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.
Is the interest tax-deductible?
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 generally apportioned, subject to the accountant's confirmation.
What happens on default?
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.
What insurance do I need?
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.
Can I refinance asset finance?
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.
Can a sole trader access asset finance?
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.
Related
Related reading
Equipment finance
The most-used asset finance sub-category for kitchen, machinery, and qualifying equipment.
Read onVehicle finance
Asset finance specifically for utes, vans, trucks, and fleet purchases.
Read onHeartland Bank
A major NZ asset finance specialist with strong coverage across all common asset classes.
Read onTrucking and haulage loans
Heavy vehicle asset finance is the largest single use of NZ asset finance volume.
Read onDairy farm loans
Tractor, milking shed, and effluent system asset finance use cases.
Read on