New businesses need money most exactly when lenders are least comfortable providing it. There’s no trading history to point to, no financials, often no track record in the owner’s name. That’s normal — and it doesn’t mean there are no options. It just narrows them.
Why is funding harder in the first six months?
Unsecured business loans and lines of credit are assessed on turnover and bank statements. Lenders usually want the business trading for 6+ months so they can see a pattern: what comes in, what goes out, how the account is run. Two or three months of statements from a brand-new business don’t tell them enough.
Banks are generally cautious too, often wanting a detailed business plan, a significant owner contribution and security.
So what are the options?
1. A property-secured business loan. This is the most common route for new businesses. If you or someone supporting you owns New Zealand property — a home, rental, commercial property or land — its equity can secure a business loan from $20,000 to $1m, as a first or second mortgage, even with a mortgage already on it. The lender’s comfort comes from the property, so the lack of trading history matters far less. No financials or tax returns are needed for the initial assessment.
2. Waiting until you hit six months. If the need isn’t urgent, keeping clean records and applying for unsecured funding once you have six months of statements can open more options.
3. Supplier terms and deposits. Negotiating 30-day terms with suppliers, or taking customer deposits, can fund a surprising amount of early working capital.
4. Owner and family funding. Many New Zealand businesses start with the owner’s savings or family support. If family are helping, document it properly — is it a loan or equity? — to avoid problems later.
5. Grants and programmes. Some regional and sector programmes exist. Business.govt.nz is the place to check what’s current.
Bought a business rather than started one?
That changes things. If you’ve taken over an established business, it may have years of trading history even though you’re new. Lenders will look at the business’s record, your relevant experience and how the handover went. See our answer on funding to buy an existing business.
What makes a young business fundable?
Whatever route you take, these make a lender more comfortable:
- Relevant experience. A chef opening a restaurant, an electrician going out on their own, a physio opening a clinic.
- Committed income. Signed contracts, a forward order book, a head contractor relationship, pre-sales.
- A realistic cash flow forecast. Not a hockey stick — a sensible month-by-month view. Our guide to preparing a cash flow forecast shows how, and business.govt.nz has a free cash flow forecaster.
- Clean banking from day one. A dedicated business account, all income paid into it.
- Skin in the game. Your own money already invested.
Be careful not to over-borrow early
The temptation with a new business is to borrow enough for everything you might want. Borrow for what the business needs to reach the point where it pays its own way, plus a sensible buffer. You can always come back once you have trading history — often on better terms.
How is it priced?
Every loan is priced on the individual situation — the security, the amount, the purpose and your plan. We compare options across our lending partners and find the sharpest one available for your circumstances.
Talk it through before you commit
Ring the Hotline and tell a specialist where the business is at. They’ll tell you honestly what’s realistic now, and what will open up at six months. Or request a call back.