How much can my business borrow?

Indicative borrowing capacity for NZ SMEs commonly runs 10% to 25% of annual turnover on unsecured products and 50% to 100% of property value on secured products. A business with $1M annual turnover commonly accesses $100K to $250K unsecured. Property-secured limits run materially higher. The achievable amount depends on debt-service capacity, security position, and the lender's credit assessment.

The calculator works backwards from a comfortable monthly repayment to the loan amount that repayment would service across a chosen term and indicative rate. It is a directional tool to set expectations, not a quote. The actual amount any specific lender will offer depends on the borrower's trading history, security, and credit profile.

A common rule of thumb is that monthly debt-service should not exceed 10% to 15% of monthly turnover for unsecured borrowing, or 25% to 30% on secured. A business with $50K monthly turnover therefore commonly considers $5K to $7.5K monthly debt-service comfortable. The right level depends on margin, fixed costs, and existing debt.

No. The calculator runs a single-loan amortisation only. Real-world borrowing capacity is governed by the total debt-service ratio, including all existing debts. The lender's assessment is the authoritative position; this tool sets a directional floor.

NZ lenders typically calculate borrowing capacity using a debt-service ratio (DSR) approach. The lender estimates EBITDA or operating cash flow, applies a coverage requirement (typically 1.25x to 1.5x), and works back to the principal that figure can support across the term. Property-secured borrowing layers an LVR cap on top, typically 60% to 80% of the security value.

The same monthly repayment buys very different principal amounts depending on the rate. At 8% across 5 years, a $1,000 monthly payment supports a $49,300 loan; at 18% across 5 years, the same $1,000 supports $39,400 in principal. A 10-percentage-point rate difference reduces the supported principal by around 20%.

Common NZ business loan documentation includes the NZBN, last 6 to 12 months business bank statements, P&L for 1 to 2 years (often 2 to 3 on larger or property-secured loans), cash-flow forecast where the loan funds growth, director ID, and security documents where applicable. Documentation expectations scale with loan size and security complexity.

Yes, mathematically. A longer term reduces the monthly repayment for the same principal, freeing capacity. The trade-off is total interest paid, which increases with term length. Borrowing capacity across a 7-year term is typically 25% to 40% higher than across 3 years for the same monthly payment, but total interest paid is materially higher.