What is a Business Loans or Business Asset Finance?

Business loans or Business Asset Finance are a fixed term, fixed interest rate, Secured or Unsecured loan for a period of 1 month to 7 years (depending on security offered).

What you will learn in this Business Loan guide:

  • What can a Business Loan be used for
  • How does a Business Loan work
  • What types of business loans do Pioneer Finance offer
  • The difference between Secured and Unsecured
  • What security does Pioneer Finance need
  • The benefits
  • What are the risks
  • How do I apply
  • What parts of New Zealand do you cover

What can a Business Loans or Business Asset Finance be used for?

You can use Business loans or Business Asset Finance for numerous reasons like:

  • Buying Essential equipment and stock
  • Upgrade and maintain vehicles and machinery
  • Access to vital cash flow
  • New shop fit out
  • Pay unexpected tax bills
  • Upgrade your phone and IT systems
  • Hire new staff
  • Build a new website
  • Fund an advertising campaign

How does a Business Loans or Business Asset Finance work?

Once you have decided on the need for a Business loans or Business Asset Finance and all the paperwork has been processed Pioneer Finance will pay the funds directly to the supplier if you are making a purchase. If the funds a required by your business and will be used over a period of time they will be deposited into your business bank account.

In some instances the finance company can hold funds back for you until you are ready to use it which can hep save on interest costs

What types of Business Loans or Business Asset Finance do Pioneer Finance offer?

We offer a standard principal and interest term loan from 1 month to 7 years depending on the security offered.

Some of our shorter-term loans could be done as an interest only loan and in certain circumstances we could do a fully or partially capitalising loan.

The difference between Secured and Unsecured?

Secured Business loans or Business Asset Finance means the business or the directors have offered some security to the finance company until the loan is repaid. Offering security can gain you better finance terms such as lower interest rates and longer terms. This makes lending to your business a lower risk proposition and will give you a greater chance of having your loan approved.

An unsecured business loan means the finance company has not taken any security for the loan and makes this a higher risk proposition for them. What this means for you is usually a higher interest rate and a shorter term meaning the repayments will be higher. The reason for the shorter term is the risk to the finance company and they will try to get the funds they have lent back quickly.

What security can be used?

We can use the following securities:

  • Property
  • Motor vehicles – Including cars, trucks & motorbikes
  • Boats & Jetskis
  • Business assets
  • Household chattels

For some applicants we may be able to help you with an unsecured loan.

Business Loans or Business Asset Finance Terms

The loan terms we are able to offer depend on the security offered. Below is a table detailing the terms we can offer:

SecurityMaximum term
Property7 Years
Motor Vehicles less than 10 years old4 Years
Motor vehicles older than 10 years3 Years
Motor vehicles older than 18 years2 Years
Boats & Jetskis3 Years


The benefits?

Below is a list of benefits of getting a business loan:

  • Using a loan to fund the purchase of a new vehicle, machine or stock means you will spread the business expense out over a period of time rather than in one large lump sum
  • Helps the business retain funds for working capital
  • Enables your business gain the assets you need to grow your business

What are the risks?

One of the main risks for businesses these days is getting the wrong type of loan for the business. It is important to ensure the loan you take does not put your business under any undue financial strain.

Some things to think about are:

  • What am I getting the loan for and how will I be repaying the loan
  • If I take it over a short term how will that impact my business cash flow
  • What extra fees will be charged if I take it over a long term but settle early

For more information on things you need to consider have a look at this website by the Ministry of Business, Innovation and employment www.business.govt.nz/getting-started/funding-your-business/borrowing-money/.

For further information about businesses you can go directly to their website here.

How to decide what term?

Short Term loanLong term Loan
Purchase stock and materialsVehicle or Machinery purchase
Cover Wages or contractor expensesUpgrade IT or Phone System
Invoice financingFund an advertising campaign or promotion


Depending on the finance company and the conditions of the loan it may be ok for you to take a loan over a long term for a short-term reason but you should settle the loan early when the funds become available.

Short term loans are usually taken as you need funds until a large sale is finalised or a job you have been working on is completed.


Simon is working on a project which is going to take him a year to complete and get paid. He does not have enough money to cover the cost of completing the project without it impacting the rest of his business.

He has decided to borrow $50,000.00 to cover the cost of materials and staffing this project. Once the project is completed he stands to receive payment of $120,000.00 so this is of great benefit to him.

The decision has been made to borrow the funds in the short term and he has two options in front of him a short-term unsecured loan or a 5 year loan using his property as security:

12 Month Loan5 Year Loan
Loan Amount$50,000.00$50,000.00
Establishment Fee$1,250.00$1,250.00
Caveat Fee$0.00$315.00
Interest Rate37%$16.95%
Monthly Fee$0.00$12.00
Weekly Repayments$1,184.83$295.43
Early Settlement Fee$0.00$75.00
Final Settlement$1,184.83$44,358.37
Total Paid$61,610.58$59,875.73


As you can see both loans give Simon access to the fund’s he requires however the 12 month loan comes at a higher interest rate and larger weekly repayments.

Using his property as security and taking the loan over 5 years means he can use the money he receives from his completed project to pay back the loan. He will also have the benefit of his weekly repayments being $889.40 less putting less strain on his cash flow and saving himself $1,734.85 in interest repayments

What are the risks?

It is important you take the right loan for your business and these are some of the risk’s:

  • Taking a long-term loan say over 4 years to cover the purchase of materials to complete a job means you have committed to making repayments on a loan for 4 years while the job may have been completed within months of loan being taken.
  • Likewise taking a short-term loan to pay for a new vehicle because you are waiting on funds from some work you have completed may leave you short on cash flow.

What you need to look at is the early exit fees from a long-term loan and compare these with the Interest rate you will be paying on a short-term loan. Our early settlement fee is $75 and may be worthwhile taking as the interest rate is likely to be lower.

How to apply

You can apply for a business loan with Pioneer Finance if you are:

  • Over the age of 18; and
  • A New Zealand Citizen, Permanent Resident or in some instances on a work visa; and

You do need to show that you have the affordability for the loan and that you are who you say you are. You can do this by providing the following:

  • Proof of Identity – i.e passport or driver’s license
  • Proof of Address – Bank statement, utilities bill or a letter from a government department
  • 3 Months bank statements
  • Most recent Financial Accounts

Depending on the security offered for the loan we may require further information such as rates notice, mortgage statement’s or proof of purchase.

What checks will you complete using my information?

Depending on the security offered we will do checks with the following registers:

  • Credit checks with 1 or more of the following Equifax, Centrix or Illion
  • PPSR
  • Land online
  • New Zealand transport
  • Driver check

Don’t worry if your credit check has a couple of bumps and bruises we may still be able to help you.

Business Loans or Business Asset Finance Fees and Charges

Business loans will have various fees attached, which may include:

  • An establishment fee once you loan is approved and you have accepted the terms
  • Ongoing monthly account fees
  • Security registration fees
  • Caveat registration fee
  • Penalty fees for late payment
  • Early settlement fee
  • Caveat removal fee
  • One-time broker fees if using a finance broker

Some of these fees will be charged to the loan upfront or are calculated in your weekly, fortnightly or monthly installments. Other fees can be charged at the end of the loan term such as early settlement fees or if you used your property as security a caveat removal fee can be charged.

For more details on our fees and charges go to our Interest rates and fees page in the important information section.

What areas in New Zealand do you cover?

That’s easy through our Offices in Wellington & Auckland we cover the whole of New Zealand as a large part of our application process can been done via our website, e-mail and telephone.

Business Loans FAQ

If you are over the age of 18 (up to the age of 21 you may require a guarantor), a permanent resident of New Zealand, earn a regular income, and can demonstrate the ability to repay the loan, you may qualify for a personal loan.

We offer loans from $5,000 to $100,000 on a business loan in New Zealand. The amount we lend does depend on the security offered for the loan. The more security offered the better chance we will be able to lend the amount you require. We will also need to check your affordability and credit profile.

Yes. Your credit history may not be as bad as you think. Let us do the background work and we’ll take it from there. You do need to show us that you can afford to pay the personal loan, and you will need security, and may need a guarantor.

Approval time depends on some variables:

  • How much information you provide, the more information you provide the quicker we will be able to give you an answer.
  • Larger loans tend to take a little extra time
  • Loans with property involved can also take a little longer to get approved

In saying that we do endeavour to give a same day answer on all applications received.

Yes, you can make extra repayments; or you can increase your minimum repayment to help pay your loan off earlier. We do charge a small early settlement fee of $75.