Property mortgage
Registered first-mortgage or second-mortgage over residential or commercial property. Lowest rate band; longest term (up to 25 years on commercial mortgage).
- Rate: 7% to 10%
- Best for: $250K+
Loan type
Secured business loans for lower-rate NZ borrowing.
Term lending secured against property, qualifying business assets, or a director caveat. Lower indicative rates (7% to 14%) in exchange for the security. Suits larger amounts and rate-sensitive borrowers.
Last reviewed 5 May 2026
Indicative repayment
Weekly
$1,198/week
$5,190 /month $61,375 total interest
$250,000
$5,000 $500,000
5 years
6 months 5 years
9.00% 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 $250,000 scenario
5 years at 9.00%. 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
Secured business loans in NZ.
- Lower rate commonly 7% to 14% vs 12% to 25% unsecured. Saves thousands across multi-year loans.
- Property or asset security real estate mortgage, qualifying business assets, or director's property caveat.
- Larger amounts common for $250K+ where unsecured products typically do not extend.
- Slower application 2 to 6 weeks for property-secured (valuation required); 1 to 2 weeks for asset-secured.
What it is
Term lending secured against property or assets.
A secured business loan is term lending where the borrower pledges property, qualifying business assets, or a caveat against a director's property as collateral. The security materially lowers the lender's recovery risk and translates to indicative rates 2 to 6 percentage points below an equivalent unsecured loan.
NZ secured business lending commonly runs $50,000 to multi-million. The structure is the dominant choice for amounts above $250K and for rate-sensitive established borrowers willing to clear the longer application process. Property-secured loans require a registered valuation; asset-secured loans require PPSR registration over the asset.
Major banks (ANZ, ASB, BNZ, Westpac, Kiwibank) compete most aggressively on secured pricing. Specialists like Heartland Bank, Avanti Finance, and Basecorp also play in this space, particularly for harder credit profiles or speed-sensitive transactions where the major banks decline.
Amount
$50K to $1M+
Term
1 to 25 years
Security
Property or assets
Rate band
7% to 14% indicative
Security types
Three common secured structures in NZ.
Asset-secured (PPSR)
Security registered on PPSR over qualifying business assets (vehicles, equipment, machinery, livestock). Mid rate band, faster application.
- Rate: 8% to 14%
- Best for: $50K to $500K
Caveat-secured
Caveat lodged against a director's property without a registered mortgage. Faster than property mortgage; higher rate than first-mortgage but lower than unsecured.
- Rate: 10% to 14%
- Best for: Speed + property
Vs alternatives
Secured vs unsecured vs asset-finance.
| Feature | Secured term loan | Unsecured term loan | Asset finance |
|---|---|---|---|
| Indicative rate | 7% to 14% | 12% to 25% | 8% to 16% |
| Maximum amount | $1M+ | ~$250K | $500K+ |
| Term | 1 to 25 years | 6 to 60 months | 1 to 5 years |
| Decision speed | 2 to 6 weeks | 1 to 2 days | 1 to 7 days |
| Security | Property or assets | Director PG | The asset (PPSR) |
| Suits | Larger, rate-sensitive | Speed, no property | Asset-tied purchases |
How it works
A typical secured business loan application.
01
Day 1 to 7
Loan structuring conversation
Initial conversation with relationship banker (major bank) or broker. Define amount, purpose, security on offer, term needed.
02
Day 3 to 10
Documentation pack
NZBN, business owner ID, last 12 months bank statements, P&L (typically 2 years), cash-flow forecast, security documents (property title or asset details).
Documents commonly required
- NZBN
- IDs
- 12 months bank statements
- 2 years P&L
- Cash-flow forecast
- Property title or asset details
03
Day 7 to 21
Valuation and credit assessment
On property-secured loans, registered valuation is commissioned. Credit committee assesses application against debt-service ratios, security position, and director profile.
04
Day 14 to 42
Settle and register security
On acceptance, security registered (mortgage on property, PPSR on assets, caveat). Solicitor commonly involved on property-secured. Funds disburse on registration.
Trade-offs
Where secured fits, and where it doesn't.
Where it fits
- Larger amounts ($250K+) where unsecured products do not extend or price punitively.
- Rate-sensitive borrowers willing to wait the longer application process for materially lower pricing.
- Established borrowers with property or qualifying business assets to pledge.
- Long-term lending (5+ years) where unsecured terms cap at 60 months.
- Commercial property purchases where the property itself is the security.
Where it doesn't
- Time-sensitive applications; secured can take 2 to 6 weeks vs 1 to 2 days unsecured.
- Borrowers without property or qualifying assets to pledge.
- Smaller amounts (under $50K) where unit economics push the lender toward unsecured products.
- Borrowers prioritising flexibility (early repayment, redraw) over rate.
- Brand-new businesses; secured lenders typically require 2+ years trading.
Lenders
NZ secured business loan lenders.
Best for best rate, multi-year property-secured
Major banks (ANZ/ASB/BNZ/Westpac)
Cheapest pricing on clean applications. Property-secured commercial mortgages up to 25 years.
Indicative rate band:7% to 11% p.a.
Read onBest for asset-secured up to $500K
Heartland Bank
Strong on asset-secured term loans. Faster than major banks; mid-priced.
Indicative rate band:9% to 13% p.a.
Read onBest for caveat and bridging
Avanti Finance
Property-caveat specialist. Faster than major banks for property-secured; useful for harder profiles.
Indicative rate band:9% to 14% p.a.
Read onBest for NZ-owned banking relationship
Kiwibank Business
NZ-owned bank with SME-focused secured products. Mid-priced major-bank tier.
Indicative rate band:7% to 11% p.a.
Read onLVR by security type
Indicative loan-to-value ratios across NZ secured business loans.
The loan-to-value ratio (LVR) caps how much can be borrowed against a given security. Property carries the highest LVRs because the resale market is deep; specialised equipment sits lower because residual values are less predictable. Indicative bands across NZ secured lending.
| Security type | Typical LVR | Indicative rate | Notes |
|---|---|---|---|
| Owner-occupied residential | 70% to 80% | 7% to 9% p.a. | Lowest indicative band. Major bank dominant. |
| Investment residential | 60% to 70% | 8% to 10% p.a. | Slightly tighter than owner-occupied. |
| Commercial property | 60% to 70% | 7% to 11% p.a. | Term loans up to 25 years on commercial mortgage. |
| Vehicles and utes | 70% to 80% | 8% to 12% p.a. | Liquid resale; PPSR-secured. |
| Standard machinery | 60% to 75% | 9% to 13% p.a. | Mainstream equipment classes. |
| Specialist equipment | 40% to 60% | 10% to 14% p.a. | Lower LVR reflects narrower resale. |
| Caveat-secured (property) | 50% to 70% combined | 10% to 14% p.a. | Sits behind any registered mortgage. |
Worked scenarios
Three NZ secured business loan scenarios.
Indicative weekly costs and structures across three different NZ secured borrowing situations, illustrating how the security type and rate band shift across asset classes.
Construction
Auckland builder, commercial mortgage refinance
A Penrose construction company refinancing $480,000 across three legacy unsecured loans into a single property-secured term loan against a director-owned commercial unit. Trading 11 years, $310K monthly turnover.
The structure was a registered first mortgage on the commercial property at indicative 8.5% p.a. across 10 years. The refinance drops the blended rate from ~17% to 8.5% and frees up $4,200 per month of cash flow.
Indicative figures
- Loan amount
- $480,000
- Term
- 10 years
- Rate
- 8.5% p.a.
- Weekly
- ~$1,375
- Monthly cash freed
- ~$4,200
Transport and logistics
Hamilton transport operator, asset-secured
A Te Rapa freight operator buying two new prime movers for fleet expansion. Total $340,000 ex-GST. Trading 7 years, established lender relationship, $180K monthly turnover.
The structure was a asset-secured term loan over the two prime movers, PPSR-registered, at indicative 10% p.a. across 5 years. Rate sits below an unsecured equivalent because the trucks themselves are the security.
Indicative figures
- Asset value (ex-GST)
- $340,000
- Term
- 5 years
- Rate
- 10% p.a.
- Weekly
- ~$1,675
- GST claim
- $51,000
Professional services
Wellington services firm, caveat-secured
A Wellington accounting practice acquiring a smaller firm. Acquisition price $250,000. The practice has no commercial property; the director offers a caveat over a rental investment property as security.
The structure was a caveat-secured term loan at an indicative 11.5% p.a. across 5 years. Faster than a registered mortgage (3 to 7 days vs 4 to 6 weeks) and roughly 3 percentage points cheaper than the unsecured equivalent.
Indicative figures
- Loan amount
- $250,000
- Term
- 5 years
- Rate
- 11.5% p.a.
- Weekly
- ~$1,275
When it goes wrong
Default scenarios on a secured business loan.
Secured business loans give the lender clearer recovery rights than an unsecured equivalent. The trade-off is that the security itself, often the borrower's commercial property or a director's house, is at risk if the loan defaults. Three common scenarios in the NZ market.
Missed repayments
Late or missed scheduled payments commonly trigger a relationship-banker check-in within the first cycle. The lender will typically work with a borrower whose underlying business is solvent, on a payment plan or short-term term extension.
What happens:Late fees apply (commonly $20 to $100 per missed payment). Credit file marks accumulate. Continued non-payment escalates to formal default review.
Formal default and enforcement
After 60 to 90 days arrears and statutory notice under the Property Law Act 2007 (for property-secured) or PPSR enforcement (for asset-secured), the lender can move to enforce the security. On property-secured, this means mortgagee sale; on asset-secured, repossession and sale.
What happens:Property is sold by the lender as mortgagee in possession. Sale proceeds are applied to the loan balance, costs of sale, and any fees. Any shortfall is pursued under the personal guarantee. Surplus, if any, returns to the borrower.
Insolvency or liquidation
Where the business fails, the secured loan ranks ahead of unsecured creditors for the security value. The director PG that typically sits alongside the registered security creates personal liability for any shortfall after security enforcement.
What happens:Security is realised by the lender. PG enforcement creates personal liability for any shortfall. Personal credit files mark for 5 years. Future borrowing materially harder.
Default on secured business lending is uncommon in our experience among established borrowers. Lenders typically prefer payment plans and term extensions over enforcement, because enforcement is slow, expensive, and rarely recovers the full balance.
Editor's note
The four-percentage-point gap between secured and unsecured pricing is the cost of paperwork and patience. If the security exists and the borrower can wait three to six weeks, that gap pays for itself many times over the term.
What security actually buys
The saving is real, and so is what is being pledged.
Security commonly moves an indicative rate from the 12% to 25% unsecured band into the 7% to 14% secured band, which on $200,000 across five years is tens of thousands of dollars. That saving is the entire commercial case for the product and it is a genuine one. What is being given in exchange is a specific claim over a specific asset, and where that asset is the family home the consequence of a business failure reaches the household rather than stopping at the company. Both halves of that trade are worth stating plainly, because the rate comparison makes the first half obvious and says nothing about the second.
What can be used as security
Six security types NZ lenders accept, and what each is worth.
Not all security is equal. Lenders price against how quickly an asset can be sold and how predictable the sale price is, which is why property and plant sit at opposite ends of the same facility.
Residential property
The strongest security in the NZ market. Deep resale market, predictable valuation, LVR commonly 70% to 80%. It is also the security that puts the household in the exposure.
Commercial property
Strong but priced below residential, with LVR commonly 60% to 70%. Valuation is more variable and the resale market is thinner, particularly outside the main centres.
Vehicles and mobile plant
Registered on the PPSR, easily identified and readily sold. LVR commonly 70% to 95% on mainstream models, and the basis of most NZ asset finance.
Specialist plant and machinery
Accepted but discounted. A thin resale market means the lender models a lower recovery, so LVR commonly drops to 60% to 80% and the rate rises.
Debtors and inventory
Taken under a general security agreement. Debtors are fundable in their own right through invoice finance; inventory is discounted heavily because forced-sale values are low.
Directors guarantees
Not security in the strict sense, since no specific asset is pledged, but present on almost every facility and the mechanism most enforcement actually runs through.
The general security agreement
What a GSA covers, and why the order of registration matters.
A general security agreement is the instrument most New Zealand business lending is written over, and it is broader than borrowers commonly assume. Rather than naming a single asset, it takes security over the present and after-acquired property of the company: the plant, the vehicles, the stock, the debtors, and generally the intellectual property as well. Assets bought after the GSA is signed fall under it automatically.
It is registered on the Personal Property Securities Register, and the register works on priority by time. The first lender to register generally ranks ahead of the second over the same collateral, which matters a great deal when there is not enough to satisfy both. A business that has already granted a GSA has, in practical terms, given away most of what a later lender would want.
That is why a second facility is commonly declined or priced high even where the business looks capable of servicing it. The question the second lender is asking is not whether the business can pay, it is what would be left after the first lender had been satisfied, and the honest answer is frequently very little.
Deeds of priority and partial releases exist and are negotiated regularly in the New Zealand market. A first lender that is comfortably covered will often agree to release specific collateral, or to rank behind a new lender over a particular asset, particularly where the new funding improves the business position. It requires asking, and it takes time, so it belongs at the start of a second application rather than at the end of one.
Discharging a GSA once a facility is repaid is not automatic in practice. The registration commonly sits on the PPSR until someone asks for it to be removed, and an old registration from a settled loan is a routine cause of delay on a later application.
Worked example
A Rotorua tourism operator refinancing three facilities into one.
The operator runs guided activities with a fleet of vehicles and a base building it owns. Over four years it accumulated three facilities: an unsecured term loan at an indicative 17%, a vehicle finance contract at 11%, and an overdraft running consistently near its limit at 13%. Combined, roughly $340,000 outstanding.
The building had risen in value and the mortgage on it was modest, so there was equity available that none of the three facilities was using. A single secured facility at an indicative 8.5% across ten years, secured by a registered mortgage over the building plus a GSA, refinanced all three.
On these assumptions the weekly repayment fell from roughly $2,050 across the three facilities to about $980, and the indicative interest cost in year one fell from around $44,000 to about $28,000. The operator also went from three lenders and three payment dates to one.
Two consequences are worth stating alongside that. The term extended, so a lower weekly cost across a longer period does not automatically mean less interest in total unless the facility is repaid faster than the schedule requires. And the building now secures the whole obligation, where previously the unsecured portion did not reach it. The saving is real; so is the change in what is at risk.
Indicative figures
- Facilities consolidated
- 3
- Total outstanding
- ~$340,000
- Weekly before
- ~$2,050
- Weekly after
- ~$980
- Indicative rate after
- 8.5% p.a.
- Year-one interest before
- ~$44,000
- Year-one interest after
- ~$28,000
Indicative only, based on the assumptions stated above. The comparison holds for year one; the longer term on the consolidated facility means total interest across the life of the loan depends on how quickly it is repaid.
Common pitfalls
Six things that catch NZ borrowers on secured lending.
Secured lending is cheaper and slower, and most of what goes wrong with it happens at the edges of the transaction rather than in the repayments.
Securing the home by default
Residential property is the easiest security to offer and the most consequential. Where business assets would have carried a smaller facility at a slightly higher rate, that comparison is worth running before the house is pledged.
Cross-collateralisation
Where one facility is secured over several assets, or several facilities over one, releasing any single asset later requires the lender agreement. Selling a vehicle or a building can become a negotiation rather than a transaction.
Valuation and legal costs
Registered valuations and security documentation are paid by the borrower and are commonly payable whether or not the loan settles. On a declined application they are a sunk cost.
The undischarged GSA
A general security agreement from a repaid facility commonly stays on the PPSR until someone requests removal, and a stale registration routinely delays a later application.
Assuming secured means safer
The rate is lower and the consequence of default is more concentrated. Secured lending moves risk from the lender to a specific asset the business or the household owns.
Over-securing for the amount
A lender will generally take everything offered. Offering security proportionate to the facility, rather than everything available, preserves room for the next transaction.
Choosing the security
Business assets or the family home.
Business assets
Keeps the exposure inside the company.
A facility secured over plant, vehicles and debtors under a general security agreement keeps enforcement inside the business. Where things fail, a receiver deals with company property and the household is reached only through the directors guarantee, which is a separate and generally slower step.
The cost is a higher rate and a lower amount. Business assets have thinner resale markets than residential property, so the lender models a lower recovery and prices accordingly, commonly in the 9% to 14% band rather than 7% to 9%.
For many New Zealand businesses this is the honest trade to take: paying a couple of points more to keep the family home out of the security package is a smaller cost than it appears when set against what the alternative risks.
Residential property
The cheapest money, and the largest consequence.
A registered mortgage over residential property produces the lowest rates available to a small business and the largest facilities, because the security is liquid, valuable and easy for a lender to model.
It also collapses the separation between the business and the household. Limited liability, which is commonly a central reason for incorporating in the first place, does not survive a mortgage over the family home, and neither does it survive an unlimited personal guarantee.
Where this route is taken, two things are worth doing at the outset: sizing the facility to the need rather than to the available equity, and asking whether the lender will accept a lower LVR over business assets for part of the exposure. Both reduce what is at stake without changing the purpose of the borrowing, and neither requires the lender to agree to anything unusual. Where a spouse or partner is a joint owner of the property, they will generally be required to sign as well, which is a conversation worth having early rather than at the solicitor's office.
References
Sources
- IRD: Interest deductibility
Tax framing for secured business loan interest.
- Reserve Bank of NZ: Lending data
NZ secured business lending volume context.
- Heartland Bank: Business loans
Indicative rate band reference.
- PPSR (NZ)
Where asset-secured business loans are registered.
- LINZ: Land titles
Where property mortgages are registered.
FAQ
Secured business loan, NZ small-business questions answered
What is a secured business loan in New Zealand?
A secured business loan is term lending where the borrower pledges property, qualifying business assets, or a caveat against a director's property as collateral. The security lowers the lender's recovery risk; in exchange, the borrower gets a lower indicative rate (7% to 14% vs 12% to 25% unsecured).
How much can I borrow secured?
NZ secured business lending commonly runs $50,000 to multi-million. Property-secured commercial mortgages run to multi-million on established applicants. Asset-secured loans typically cap at $500K to $1M depending on asset class. The achievable amount depends on the security value, loan-to-value ratio, and borrower profile.
What rates can I expect?
Indicative rates run 7% to 14% per annum across NZ secured business loans. Major banks price the lowest band (7% to 11%) on clean applications with property security. Specialist lenders like Heartland sit in 9% to 14%. Caveat-secured products price 10% to 14%, between unsecured and registered-mortgage tiers.
How long does approval take?
Property-secured loans typically take 2 to 6 weeks because of valuation, solicitor involvement, and credit committee process. Asset-secured loans run 1 to 2 weeks. Caveat-secured loans run faster (3 to 7 days) because no registered mortgage is required.
What documents do I need?
NZBN, business owner ID, last 12 months bank statements, P&L (typically 2 years), cash-flow forecast, and security documents (property title and rate notice for mortgage; asset details for PPSR). Property-secured loans add a registered valuation commissioned by the lender.
Can I refinance to a secured loan from unsecured?
Yes, refinancing from unsecured to secured is a common path to lower the rate band by 2 to 6 percentage points. Common triggers are property becoming available as security, or a credit-profile improvement opening access to major-bank pricing.
What happens if I default on a secured loan?
On default, the lender enforces the security after the statutory notice period. On property-secured loans, the lender can move to mortgagee sale; on asset-secured, the asset is repossessed and sold; on caveat, the lender can move to enforcement against the property. Personal guarantees commonly sit alongside the security and can be enforced for any shortfall.
Is a personal guarantee still required?
Often yes, particularly on alternative-lender secured products. Major banks sometimes waive PG on substantial property-secured loans to established borrowers, but the PG is the standard arrangement on most secured business lending. The PG is in addition to the registered security.
Can I get a secured loan with bad credit?
Specialist lenders (Avanti Finance, Basecorp) write secured loans for harder credit profiles, including borrowers with defaults or arrears, where property security is on offer. Pricing is at the upper end of the band and term is typically shorter. Major banks rarely accept harder credit even with property security.
Is secured loan interest tax-deductible?
Interest on a secured business loan used for business purposes is generally deductible against business income, subject to the accountant's confirmation. The deductibility depends on the loan purpose, not the security arrangement; the secured-versus-unsecured distinction does not affect tax treatment of the interest paid.
What is a caveat-secured loan?
A caveat-secured loan registers a caveat against the director's property at LINZ rather than a registered mortgage. The caveat prevents the property being sold or refinanced without the lender being paid first. It is faster and cheaper to register than a mortgage but offers slightly weaker security; rate sits between unsecured and first-mortgage rates.
Can a sole trader get a secured business loan?
Yes, sole traders are eligible for secured business loans across NZ lenders, with the security being the sole trader's personal property (since the business and the individual are the same legal person). The application typically references the sole trader's personal financial position alongside the business trading history.
Related
Related reading
Unsecured business loan
The faster, no-property alternative for smaller amounts.
Read onCommercial property loan
Property-secured lending specifically for commercial property purchase.
Read onANZ Business
Major-bank secured business lending with multi-decade terms.
Read onDairy farm loans
Land, herd, and shed are the most common large secured borrowing in NZ.
Read onMotel and accommodation loans
Property-secured commercial mortgages dominate the segment.
Read on