Need funding to grow? This guide explains how to get a small business loan in NZ, covering eligibility, required documents, and how to speed up the application process.
At a glance
- Understanding if your cost is a one-off purchase or a recurring expense helps you decide between a standard loan and a line of credit.
- To approve your application, lenders look for consistent trading history and proof that your cash flow can support the repayments.
- Online lenders often remove the need for paperwork by using digital checks and real-time bank data to provide faster outcomes.
With so many lenders, criteria, and application methods to choose from, sorting through business loans can be challenging – especially when you need funding that genuinely fits your plans.
Whether you are getting started, expanding, or managing cash flow, most business owners want to secure finance quickly so they can stay focused on running the business.
This guide explains the main loan options and the documents lenders are likely to ask for. It also outlines how a Prospa Small Business Loan could support your next stage of growth.
Get ready to apply
To find the right funding match, take a moment to look at your business the way a lender would. Being clear on what you need and what lenders expect in return makes it easier to choose the right option and avoid delays.
1. Define your purpose
Think about exactly what you need the funding for, how much you need, and when you need it. It also helps to determine whether the cost is a one-time purchase or something that recurs, as this guides the type of loan or credit facility that will support you best.
For example, if you run a landscaping business and need to replace a ride-on mower before the summer rush, waiting for cash flow could mean turning down work. If the upgrade costs around $16,000, a small business loan gives you the upfront amount to secure the equipment straight away. If you only need to bridge wages during a quieter month, a business line of credit might offer the flexibility you need instead.
2. Check your eligibility
Lenders want to understand how your business generates income, how steady your cash flow is, and whether you can comfortably meet the repayments.
Most have basic criteria, such as:
- Trading history: How long you have been operating, often 6+ months for online lenders.
- Turnover: Your average monthly sales or income.
- Identity: Standard ID checks for directors or owners, such as a driver licence or passport.
Knowing these requirements in advance helps you prepare and strengthen your application. Prospa’s loan calculator can help you work out what level of funding your business could comfortably manage before submitting an application.
Common business loan options
Here are four options you will come across most often, and the stages of growth they typically suit:
1. Traditional bank loans
Suit established businesses with a solid financial track record. Banks usually ask for detailed statements, security, and have a longer assessment process. This can work well for long-term investments, but the timing may not work if you need funding quickly.
2. Government-backed loans or grants
Useful for newer operators, startups, or specific industries. The criteria can be strict, but some programs offer competitive terms or targeted support for early-stage businesses. You can find several grants and support initiatives through the New Zealand Ministry of Business portal.
3. Startup business loans
For businesses without long trading histories, startup loans can help. Lenders often focus on forecasts, early activity, and the strength of your business model, which can be useful for founders who are still building their financial track record.
4. Alternative or online lenders
When timing and simplicity matter, online lenders can be the best choice. They often assess real-time bank activity, cash flow patterns, and current performance rather than years of paperwork. This can suit businesses that need access to funds quickly or don’t meet traditional bank requirements.
Understanding how each option fits your business goals can make choosing the right funding path much easier.
Documents you may need for a business loan
The next step is getting your documents ready. Most lenders need a few core documents to assess your business performance and whether the loan amount is suitable for your situation.
In most applications, lenders may ask for:
Recent bank statements
Bank statements give lenders a real-time view of your trading activity. They look at incoming sales, regular expenses, and any existing loan repayments to assess whether the new loan fits comfortably into your cash flow. Depending on the loan size, lenders typically request between 3 and 12 months of business bank statements.
Identification
Lenders use identification documents to confirm who is applying and how the business is set up. This usually includes a driver licence or passport, your NZBN, details of your business structure (such as a sole trader, company, partnership or trust) and, in some cases, proof of your trading address. If your business has multiple directors or partners, each person will need to provide ID.
For many online lenders like Prospa, this step can be completed quickly through simple digital checks.
Proof of individual income
If you are a director, partner, or shareholder, lenders may also ask for documents that show your personal income. This helps them understand your broader financial position. Common examples include your most recent IRD tax returns or income summaries, and in some cases, rental statements or dividend information, depending on how your income is structured.
Financial statements
When applying for larger loan amounts, lenders often review financial statements to get a clear picture of how your business earns, spends, and manages money. These statements may include a profit and loss report, a balance sheet outlining assets and liabilities, and sometimes a simple cash flow summary. Together, they help lenders assess the stability and overall financial health of your business.
Document checklist for your business loan application
Each lender has its own requirements. Banks tend to ask for everything listed below, while online lenders like Prospa may only need ID and bank statements for smaller loans.
- Financial statements For bank loans or larger amounts (e.g. over $150k), you may need to provide your latest profit and loss, balance sheet, and a simple cash flow summary.
- Proof of individual income Traditional banks usually require your two most recent IRD tax returns or income summaries if you are a director, partner or shareholder.
- Recent business bank statements Most lenders request between 3 and 12 months of business bank statements. These should be up to date and clearly show your trading activity.
- Identification A driver licence or passport is standard for all lenders, along with your NZBN and business structure details (sole trader, company, partnership or trust).
Banks vs online lender applications
While many lenders ask for similar documents, the application process itself can be quite different depending on who you apply with.
Traditional banks often follow a more formal, document-heavy process. You may be asked to upload or provide printed financial statements, several years of trading history, and a business plan, with multiple rounds of review before anything moves forward.
Online lenders often use a streamlined digital process. Instead of gathering years of paperwork, you can securely share your bank transaction data, confirm your business details, and complete simple ID checks. This gives lenders real-time insight into your trading performance and helps them make decisions much faster.
Why many small businesses prefer the digital route:
- Real-time access to trading data can lead to faster decisions
- No need to dig out old statements, scan files, or upload PDFs
- Straightforward online ID checks and business verification
- Minimal admin and fewer delays
For your landscaping business needing to replace equipment before demand picks up, an online lender can offer the speed and flexibility required to move ahead quickly.
Phil Walding of label printing business, LabelMAN, was given an opportunity to purchase a high-tech UV printer that would reduce his production times and produce more complex labels. Prospa was able to help Phil secure a small business loan within 24 hours. This meant he could make his purchase and get the new machine up and running very quickly. “The window of opportunity was very small, and the speed of being able to set things up with Prospa really set them apart” – Phil Walding |
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If you need fast, flexible funding, you can explore options like a Prospa Small Business Loan or Business Loan Plus to see what best supports your plans.
