Online unsecured term loan
Standard online product from Heartland, Prospa, GetCapital. $5K to $250K, 6 to 60 months, lump sum, fixed weekly repayments.
- Rate: 12% to 22%
- Suits: Established borrowers
Loan type
Unsecured business loans for New Zealand businesses.
Term lending without upfront property security. Director PG-only structures from $5K to $500K. Indicative rate bands, eligibility, applications, and the trade-offs against secured products.
Last reviewed 5 May 2026
Indicative repayment
Weekly
$658/week
$2,852 /month $22,680 total interest
$80,000
$5,000 $500,000
3 years
6 months 5 years
17.00% 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 $80,000 scenario
3 years at 17.00%. 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 unsecured business loans.
- No property security a director PG is the standard arrangement; personal property is not pledged.
- Higher rates commonly 2 to 6 percentage points above an equivalent secured loan reflecting recovery risk.
- $5K to $250K typical specialists go higher; major banks rarely go above $150K unsecured.
- Faster decisions no security registration or property valuation, so funding is often within 1 to 2 business days.
What it is
Term lending without property as security.
An unsecured business loan is term-lending where the borrower does not pledge property or qualifying business assets as collateral. The lender carries higher recovery risk and prices that into a higher indicative rate. The director's personal guarantee is the standard arrangement; this exposes the directors to personal liability if the business defaults, but does not pledge a specific asset.
In New Zealand, unsecured business lending commonly runs $5,000 to $250,000 across alternative lenders and registered NZ banks like Heartland, with specialists like BizCap going to $500,000 on certain profiles. Major-bank unsecured pricing is the cheapest tier (commonly 10% to 14%) but is hardest to access; alternative-lender pricing is more accessible at 12% to 25%.
The trade-off is straightforward: pay 2 to 6 percentage points more in exchange for not putting property at risk and faster decisions. For SMEs without property to offer or who prefer not to involve property security, unsecured is often the only realistic structure.
Amount
$5K to $250K+
Term
6 to 60 months
Security
Director PG only
Rate band
12% to 25% indicative
Sub-types
Three common NZ unsecured lending structures.
Within the unsecured band, three sub-types cover most NZ borrower scenarios.
Short-term unsecured
Faster decisions, shorter terms (3 to 18 months), higher rate band. Suits time-sensitive opportunities or harder credit profiles.
- Rate: 18% to 28%
- Suits: Urgent needs
Unsecured line of credit
Revolving facility, draw and redraw, interest only on the drawn balance. $5K to $250K limits, typically 2-year revolving access.
- Rate: 12% to 20% on drawn
- Suits: Recurring cash gaps
Director personal guarantee
Unsecured does not mean risk-free for directors.
Most NZ unsecured business loans require a director's personal guarantee (PG). The PG is a separate contract under which the director becomes personally liable for the loan if the business defaults. While no specific asset is pledged, the director's personal assets are recoverable through the PG enforcement process. This is the structural reason unsecured loans require directors to declare personal financial position alongside the business application. Treat the borrowed amount as personally guaranteed when assessing affordability, not just business-owed.
Compared to secured
Unsecured vs secured business loans in NZ.
The choice between secured and unsecured commonly comes down to three questions: do you have property to offer, does the rate differential justify the security, and how fast do you need a decision.
| Feature | Unsecured | Asset-secured | Property-secured |
|---|---|---|---|
| Indicative rate | 12% to 25% p.a. | 8% to 16% p.a. | 7% to 11% p.a. |
| Security required | Director PG only | The asset (PPSR) | Property mortgage |
| Decision speed | 1 to 2 days | 1 to 7 days | 2 to 6 weeks |
| Maximum amount | ~$250K typical | $500K+ | Multi-million |
| Recovery on default | PG against directors | Asset repossession | Property foreclosure |
| Suits | SMEs without property to pledge | Asset-tied purchases | Large amounts, established borrowers |
How it works
A typical NZ unsecured business loan application.
Unsecured applications run faster than secured because there is no security registration or property valuation. Standard online process from established NZ lenders.
01
Day 1, 15-20 mins
Online application form
NZBN, business owner ID, loan amount, purpose, contact details. Director personal financial information is part of the unsecured application because of the PG.
Documents commonly required
- NZBN
- Director ID
- Director personal financial position
02
Day 1
Bank statement and credit check
Last 6 months business bank statements (often via Xero/MYOB integration). Credit checks on business and on directors providing PG. The credit check on directors is a meaningful part of unsecured assessment.
Documents commonly required
- Last 6 months business bank statements
- Director credit check consent
03
Day 1 to 3
Offer and PG signing
Offer back with rate, term, weekly cost, and the director PG document for signing. The PG is a separate contract; some lenders allow proxy signing electronically.
04
Day 2 to 5
Settle and draw
On acceptance, funds typically draw to the business bank account within 24 hours. No PPSR registration required (no specific asset). Loan term begins immediately.
Worked scenarios
Three NZ unsecured business loan scenarios.
How unsecured pricing compares to secured alternatives across three borrower profiles.
Professional services
Wellington consultancy growth
A consultancy with no property assets, 5 years trading, $40K monthly turnover. Needs $80K to fund hiring and marketing for a new service line.
Structure: $80K unsecured loan at indicative 16% across 36 months. Director PG. Weekly $670. Total interest ~$24K. The unsecured premium over a hypothetical secured rate of 11% is roughly $6K extra interest, which the consultancy accepted to keep property out of the structure.
Indicative figures
- Loan amount
- $80,000
- Term
- 36 months
- Rate
- 16% p.a.
- Weekly
- ~$670
- Total interest
- ~$24,000
Construction and trades
Auckland trades short-term unsecured
A small electrical contractor, 3 years trading, needs $25K fast for stock and tooling on a contract starter. Wants funding in 24 hours; unable to use property security on the timeframe.
Structure: $25K short-term unsecured at indicative 22% across 12 months. Funded same day. Weekly $550. Repaid out of contract progress payments by month 9. Higher rate accepted for the speed.
Indicative figures
- Loan amount
- $25,000
- Term
- 12 months
- Rate
- 22% p.a.
- Weekly
- ~$550
- Total interest
- ~$3,000
Retail
Christchurch retailer line of credit
A homewares retailer with seasonal cash-flow swings. Wants a $50K facility for ongoing stock cycles, not a single lump sum. No property to offer.
Structure: $50K unsecured line of credit at indicative 16% on drawn balance. Average drawn $30K. Annual interest ~$4,800. Suits the recurring nature of the cash gap; only pays interest on what is used.
Indicative figures
- Facility limit
- $50,000
- Avg drawn
- $30,000
- Rate
- 16% on drawn
- Annual cost
- ~$4,800
- Term
- 2 years revolving
The trade-offs
Where unsecured fits, and where it doesn't.
Where it fits
- SMEs without property to offer as security, or directors who prefer not to involve personal property in business borrowing.
- Time-sensitive applications where the longer secured-loan process is too slow.
- Smaller amounts ($5K to $150K) where the rate differential is not large in dollar terms.
- Established borrowers (12+ months trading) who can clear the unsecured application criteria.
- Borrowers prioritising speed and flexibility over absolute lowest rate.
Where it doesn't
- Borrowers who can clear a secured application; the rate differential typically saves thousands across a multi-year loan.
- Larger amounts ($250K+); secured products commonly extend further and price materially below.
- Brand-new businesses with no trading history; unsecured lenders typically require 6 to 12 months minimum.
- Asset-tied purchases (vehicles, machinery); equipment finance prices below unsecured.
- Long-term lending (5+ years); unsecured terms cap at 60 months on most NZ products.
Lenders to know
NZ unsecured business loan lenders.
The NZ unsecured market is dominated by alternative lenders and Heartland Bank for online products, with major banks competing on rate for established borrowers willing to clear longer applications.
Best for fast unsecured, our partner
Prospa
Small Business Loan ($5K to $150K) and Plus Business Loan ($150K+). Online application, decisions commonly within a business day.
Indicative rate band:12% to 25% p.a.
Read onBest for NZ-bank online unsecured
Heartland Bank
Open for Business is the flagship registered-NZ-bank unsecured product. $5K to $250K. Mid-priced.
Indicative rate band:12% to 20% p.a.
Read onBest for broader credit appetite
BizCap
Short-term unsecured for SMEs the major banks decline. Higher rate, faster decisions.
Indicative rate band:15% to 28% p.a.
Read onBest for mid-market unsecured
GetCapital (Shift)
Unsecured term and line of credit for mid-market SMEs. Mid-priced, online.
Indicative rate band:12% to 22% p.a.
Read onBest for best rate for clean applications
Major banks (ANZ/ASB/BNZ)
Major banks price lowest on unsecured but require longer trading history and slower process.
Indicative rate band:8% to 14% p.a.
Read onWhat unsecured costs against secured
The indicative price of borrowing without security in New Zealand.
The whole case for unsecured lending is speed and the absence of an asset requirement, and the whole cost of it is the rate. Running the same amounts side by side across both structures makes the size of that trade explicit.
| Amount | Term | Unsecured indicative | Secured indicative | Extra interest, unsecured |
|---|---|---|---|---|
| $25,000 | 2 years | 20% | 11% | ~$2,450 |
| $50,000 | 2 years | 18% | 10% | ~$4,300 |
| $50,000 | 3 years | 18% | 10% | ~$6,700 |
| $100,000 | 3 years | 16% | 9.5% | ~$11,300 |
| $150,000 | 3 years | 15% | 9% | ~$15,000 |
| $250,000 | 5 years | 14% | 8.5% | ~$41,000 |
Indicative only, not a quote or offer of credit. Standard amortising repayments, excluding fees. The secured comparison assumes suitable security is available; where it is not, the unsecured figure is the only figure. Actual rates are set by the lender after assessment.
If it goes wrong
What default on an unsecured business loan actually involves.
Unsecured does not mean no consequences. It means the lender has no specific asset to take, so recovery runs through the personal guarantee instead. That is a materially different process from repossession and it reaches further.
Arrears begin
New Zealand lenders in this segment commonly make contact quickly, often within days, because there is no asset backing the exposure and time works against recovery. Payment arrangements are commonly available at this stage and are far easier to negotiate before formal default.
What happens:Default interest, credit-file mark
Formal demand on the company
The lender issues a demand for the full outstanding balance rather than the arrears alone, because most agreements contain an acceleration clause. The amount owing steps up sharply at this point.
What happens:Whole balance becomes payable
The general security agreement, where one exists
Many facilities described as unsecured still carry a GSA over business assets. Where one is registered, the lender can appoint a receiver over debtors, stock and equipment, which in practice stops the business trading.
What happens:Business assets at risk
Enforcement of the personal guarantee
Where the company cannot pay, the lender pursues the directors personally under the guarantee. This reaches personal assets including the family home, and it is not limited by the value of anything in the business.
What happens:Personal assets exposed
Judgment and the longer tail
An unsatisfied judgment is recorded and affects personal credit for years. Where the guarantee is not met, bankruptcy proceedings are available to the lender as a further step.
What happens:Long-term personal credit consequences
The guarantee is the part most often skimmed. It survives the company being wound up, it is generally joint and several where there are several directors, so one director can be pursued for the whole amount, and it commonly has no cap. Reading it, and asking whether a cap or a sunset is available, is worth doing before signing rather than after.
Common pitfalls
Six things that catch NZ borrowers on unsecured lending.
The speed and the absence of a security requirement are what make this product useful, and also what make it the easiest to take without sufficient deliberation.
Unsecured is not unguaranteed
A director guarantee is close to universal. The lender has no asset but it does have the director, which is a distinction that matters at enforcement and not before.
The GSA that comes with it
Many facilities marketed as unsecured register a general security agreement over business assets on the PPSR. That is not unsecured in any meaningful sense once a receiver can be appointed.
Comparing rate not total cost
Establishment fees of 2% to 4% are common and change the comparison materially on a short term. Two 16% offers are not the same offer.
Stacking across lenders
Because assessment is quick, it is possible to hold several concurrent facilities. Combined debits then compete for the same receipts, and the pattern is visible to every lender that reads bank statements afterwards.
Early repayment costs
Some facilities price a fixed total cost rather than accruing interest on the balance, so repaying early saves nothing. The agreement is the authoritative document on which applies.
Borrowing unsecured when secured was available
A business with equipment, property or a fundable debtor ledger commonly has a secured option it did not price, and the table above shows what skipping that comparison can cost.
Where it genuinely fits
When paying the unsecured premium is the right decision.
The table above makes unsecured lending look like a straightforwardly worse deal, and read in isolation it is. The comparison only holds where a secured alternative actually exists, and for a large number of New Zealand businesses it does not.
A service business has no equipment worth financing. A young company has no property and no equity in anything. A business whose assets are already secured to another lender has nothing left to offer. In each of those cases the choice is not between 16% and 9.5%; it is between 16% and not proceeding.
Speed is the second genuine case. Secured lending requires valuation, security documentation and registration, which commonly takes weeks. Where a supplier opportunity, a contract mobilisation or a tax deadline has a date attached, an unsecured facility settling in days can be worth more than the interest difference costs.
The third is deliberately keeping security free. A business that expects to buy premises or a major asset within a year may reasonably decline to encumber its balance sheet now, because a general security agreement registered today can complicate the larger transaction later.
What does not justify the premium is not having compared. The most common avoidable cost on this product is a business with a fundable asset, a fundable debtor ledger or available equity taking an unsecured facility because it was the first one offered and the application took ten minutes.
Worked example
A Dunedin software firm funding a hiring push.
The firm has eighteen staff, recurring subscription revenue of around $2.6M annually and almost nothing a lender would recognise as security. The assets are code, contracts and people. It needs $150,000 to hire three engineers ahead of a platform rebuild that is expected to lift retention.
Asset finance is unavailable because there is no asset. Commercial property lending is unavailable because the firm leases. A bank term loan was explored and declined on the absence of security and the intangible nature of the balance sheet.
An unsecured facility at an indicative 15% across 3 years carries a weekly repayment near $1,190 and roughly $34,000 in total interest on these assumptions. Against recurring revenue of $2.6M the repayment is serviceable, and the alternative was not a cheaper loan but no loan.
The directors provided personal guarantees, which on an intangible-asset business is effectively the whole security position. That is the trade this product asks for, and it is the reason the affordability question here is a personal one as well as a business one.
Indicative figures
- Amount
- $150,000
- Term
- 3 years
- Indicative rate
- 15% p.a.
- Indicative weekly
- ~$1,190
- Total interest
- ~$34,000
- Security
- Director guarantees only
- Secured alternative
- None available
Indicative only, based on the assumptions stated above and excluding establishment and account fees. Actual rates and terms are set by the lender after assessment.
Read the guarantee
Three clauses worth finding before signing a personal guarantee.
The first is whether the guarantee is capped. Many New Zealand guarantees are unlimited, covering not just this facility but any future obligation the company incurs to the same lender, which means a later facility can enlarge an obligation signed years earlier. The second is whether it is joint and several, which it usually is, meaning one director can be pursued for the entire amount regardless of shareholding or of what the others can pay. The third is whether there is any release mechanism if a director leaves the business, because without one the guarantee commonly survives the resignation and the share sale both. None of these are unusual and none are necessarily negotiable, but a director who has read them is making a different decision from one who has not, and asking whether a cap is available costs nothing.
Improving the offer
What actually moves an unsecured rate in New Zealand.
Unsecured pricing sits on a wide band, and the difference between the top and the bottom of it on a $100,000 facility is several thousand dollars a year. Four things move a borrower along that band, and none of them involve negotiating.
Trading history is the largest. Lenders in this segment commonly price six months of history very differently from three years, and the improvement between those points is steeper than most borrowers expect. Where the need is not urgent, a few months of additional history can be worth more than any conversation about the rate.
Account conduct is the second, and it is read directly from bank transaction data rather than from accounts. Dishonoured payments, a balance that regularly approaches zero, and existing debits already absorbing the available cash all price into the offer. An account that has run clean for six months presents materially better than one that has not.
Existing facilities are the third. A business already carrying two short-term loans is assessed on the total obligation, and the offer commonly reflects the room remaining rather than the amount requested. Consolidating before applying, rather than adding to the stack, generally produces a better outcome.
The fourth is simply having compared. Pricing across New Zealand unsecured lenders for the same borrower varies more than it does in secured lending, because there is no asset anchoring the assessment. Two or three applications assessed in the same week commonly return offers several percentage points apart on identical information.
References
Sources
- IRD: Interest deductibility
Tax framing for unsecured business loan interest.
- Heartland Bank: Open for Business
Indicative pricing for the unsecured online band.
- Prospa NZ
Indicative pricing reference for the alternative-lender band.
- Reserve Bank of NZ: Lending statistics
NZ unsecured business lending volume context.
- Commerce Commission: CCCFA
CCCFA edge cases on personal guarantees and sole traders.
FAQ
Unsecured business loan, NZ small-business questions answered
What is an unsecured business loan in New Zealand?
An unsecured business loan is term lending where the borrower does not pledge property or specific business assets as security. A director's personal guarantee is the standard arrangement; this exposes directors to personal liability if the business defaults but does not pledge a specific asset. NZ unsecured loans commonly run $5K to $250K with terms of 6 to 60 months and indicative rates of 12% to 25% per annum.
How much can I borrow unsecured in NZ?
Most NZ unsecured business loans run $5,000 to $250,000. Specialists like BizCap go to $500K on certain profiles. Major banks rarely go above $150K unsecured because their credit committee requires security at higher amounts. Borrowers needing more than $250K typically move to a secured term loan or commercial mortgage.
Why do unsecured loans cost more?
Unsecured loans price 2 to 6 percentage points above an equivalent secured loan because the lender's recovery position on default is materially weaker. Without a specific asset to recover and sell, the lender pursues the personal guarantee against directors, which is slower, more expensive, and recovers less on average. The rate differential reflects this risk.
Do I still have to give a personal guarantee on an unsecured loan?
Yes, almost all NZ unsecured business loans require a director's personal guarantee (PG). The PG is what the lender relies on for recovery if the business defaults. Without a PG, an unsecured business loan is typically unavailable in the NZ market, because the lender would have no recovery mechanism beyond a business that may have no assets.
Can a sole trader get an unsecured business loan?
Yes, sole traders are eligible across most NZ unsecured lenders. Because the sole trader and the business are the same legal person, the application typically references both the business trading history and the personal financial position. Sole-trader unsecured borrowing can occasionally trigger CCCFA where the borrowing is wholly or predominantly for personal use; the accountant's confirmation on the loan purpose is the standard test.
What is the typical indicative rate?
NZ unsecured business loans commonly indicative-price 12% to 25% per annum. Major banks (ANZ, ASB, BNZ) price toward 8% to 14% for the cleanest applications. Heartland Bank Open for Business sits in 12% to 20%. Pure alternative lenders like Prospa typically price 14% to 25%. Short-term and harder-profile lenders like BizCap price 18% to 28%.
How fast can I get an unsecured business loan?
Specialist online lenders commonly fund within a business day on standard applications under $150K for established borrowers. Major-bank unsecured loans typically take 1 to 3 weeks because the underwriting process is documentation-heavy. Same-day funding is achievable on short-term unsecured products with all documents in place upfront.
What happens to my personal assets if the business defaults?
On default, the lender enforces the personal guarantee against directors. Directors become personally liable for the loan balance plus costs. Personal assets (house, savings, vehicles) are recoverable through the PG enforcement process, similar to how a personal loan default would proceed. The affordability question many directors work through is therefore a personal one as well as a business one, because the guarantee sits behind the business balance either way.
Is unsecured business loan interest tax-deductible?
Interest on an unsecured business loan used for business purposes is generally deductible against business income in New Zealand, subject to your accountant's confirmation. The deductibility position depends on the loan purpose, not the security arrangement; the secured-versus-unsecured distinction does not affect the tax treatment of the interest paid.
Can I refinance an unsecured loan to a secured one later?
Yes, refinancing from unsecured to secured (typically property-secured) is a common path to lower the rate band by 2 to 6 percentage points. The trigger is typically a credit-profile improvement or property becoming available as security. Early-repayment fees on the original unsecured loan are the main consideration; the loan contract is the authoritative reference.
What documents do unsecured lenders ask for?
Standard documents are NZBN, business owner ID, last 6 months of business bank statements, loan purpose statement, and director financial information for the PG. Larger amounts ($150K+) commonly add P&L and cash-flow forecasts. Self-employed and sole-trader applicants may include accountant letters confirming income.
Can a first-year business get unsecured finance?
Most NZ unsecured lenders require 6 to 12 months minimum trading history. Some specialists run starter products at smaller amounts and upper rate bands. First-year businesses without trading history typically need a co-signer with established trading or a personal loan to the director rather than a business loan.
Related
Related reading
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Read onSecured business loan
The lower-rate alternative when property or assets are available.
Read onHeartland Bank
Open for Business is the flagship NZ-bank unsecured product.
Read onMarketing agency loans
Talent and software stack borrowing without significant capex security.
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Talent investment finance and MRR-as-collateral patterns.
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