A single number doesn't define your business. Discover what lenders look for beyond a credit score and learn how to prepare a strong loan application.
At a glance
- Many traditional lenders in New Zealand look for a credit score of at least 620–650, but non-bank lenders can often consider scores from 400.
- A lender's assessment goes beyond the score to look at the overall health of your business; strong cash flow and a solid trading history can often be more important than a perfect credit score.
- Modern lenders use technology to analyse hundreds of data points like revenue and cash flow, allowing them to look past the credit score to see the true potential of your business.
It’s no secret that your credit score is a major factor when applying for a small business loan. That single thought often opens the door to other questions: Is my score high enough? What if it’s not where I want it to be? Could applying make things worse?
It’s natural to worry that one number could make or break your chances, especially when you’re ready to move your business forward. And you’re not alone in looking for funding: a recent Centrix New Zealand report revealed that demand for business credit saw a 5% lift in the first quarter of 2025.
But while your score is important, it is just one part of the story. Modern lenders look at the bigger picture of your business’s health — from cash flow to trading history — to get a fairer, more balanced assessment. This means that even if your credit score isn’t perfect, there is still a path to getting funded.
What credit score is generally required for a business loan?
When you’re looking into business funding, a common question is what credit score you actually need to get approved. In New Zealand, there’s no universal “pass mark” or minimum score that all lenders use. Instead, your score is assessed holistically alongside your business’s cash flow, trading history, and overall financial health.
While traditional banks often prefer applicants with higher scores, non-bank lenders may approve applications with scores from as low as 400, depending on the lender’s risk appetite and the strength of other factors like cash flow and security.
To understand where you stand, it helps to know how the three main credit reporting bureaus in New Zealand — Centrix, Equifax, and illion — categorise their scores.
Credit score ratings by major reporting agency
| Score | Centrix | Equifax | illion |
|---|---|---|---|
| Excellent | >892 | – | 800–1000 |
| Very Good | 825–892 | – | 700–799 |
| Average | 706–824 | – | 500–699 |
| Fair | 496–705 | – | 300–499 |
| Poor | 1–495 | – | 0–299 |
*Equifax NZ doesn’t publish public “band” cut-offs like the others; they indicate that 600–700+ is generally “good” on their 0–1200 scale.
Pro tip: Be mindful of your application strategy. Every time you formally apply for credit, a “hard enquiry” is logged on your file. Too many of these in a short window can temporarily lower your score, so it’s best to make targeted applications.
Why lenders assess your whole business, not just the score
While a credit score provides a useful snapshot, in New Zealand, lenders look at your business’s overall health to make a fair and balanced decision. This means your track record, revenue consistency, cash flow, and financial organisation all play a crucial role in your application.
Consider this example: a Wellington-based coffee roaster has been operating for two years. They have a strong local following, consistent monthly turnover of over $15,000, and can show timely GST returns and clean bank records. Even with a just ‘fair’ credit score, a lender is likely to see the business as a stable and viable investment due to its proven performance and positive cash flow.
Key eligibility factors lenders in New Zealand typically assess include:
Trading history
Most lenders want to see a track record of at least 6–12 months of operation. This demonstrates your business is established and can handle the typical challenges of your industry. For larger loan amounts, a history of two to three years may be required.
Revenue and turnover
For many unsecured loans, a minimum monthly turnover of around $5,000–$6,000 is a common requirement. For larger amounts over $150,000, lenders may look for an annual turnover exceeding $1 million to ensure your business can manage the repayments.
Cash flow
A healthy and predictable cash flow is one of the most important indicators for any lender. They will review your bank statements and GST returns to verify that you can comfortably meet your loan obligations on top of your regular business expenses.
Financial statements
Providing at least one year of accountant-prepared financials, business tax returns, and GST filings helps build a lender’s confidence in your application and can help accelerate the approval process.
Business structure and ownership
To be eligible, your business will need a valid NZBN (New Zealand Business Number). The business owners must also be over 18 and be New Zealand citizens or permanent residents.
Business plan and forecasts
Particularly for new or expanding businesses, lenders often want to see a clear and realistic plan. Outlining how the funds will be used, supported by reasonable income projections, demonstrates that your business is prepared for sustainable growth.
Demonstrating stability in these key areas shows lenders your business is well-managed and has the capacity to handle repayments, which can often carry more weight than the credit score alone.
Pro tip: Keeping up to date with your GST and IRD obligations is a powerful signal to lenders that your finances are in good order. Overdue tax payments can be a red flag, even with strong revenue, so ensuring everything is filed on time will smooth the path to approval.
A Prospa Small Business Loan gave The Rib House founder Troy Taupau the boost he needed to expand his popular eatery. With customers queuing up and demand surging, Troy saw a clear opportunity to grow by opening a second location in the South City Mall, but needed capital to make it happen quickly.
“Prospa was very easy to deal with, and very fast. A couple of other providers took their time, but Prospa got back to me the same day. Within two days, the funds were in my account. It’s given me the freedom to do what I want to do with the business.”
What are the options for a business loan with bad credit?
Having a challenged or limited credit history can feel like a major roadblock when you need business funding. It’s the kind of worry that leads many business owners in New Zealand to search online for phrases like “bad credit business loans” or wonder if “no credit check” options are their only choice.
The reality is that while a lower score can limit your options with traditional lenders, it doesn’t have to be the end of the road. Lenders like Prospa are set up to look beyond your credit history.
Prospa’s advanced credit assessment technology looks at the real-time health of your business. It analyses over 450 data points from your bank statements, GST returns, and other verified sources to understand your performance today. This means factors like consistent turnover and healthy cash flow can speak louder than a blemish on your credit file, creating a fairer picture of your business’s potential.
The application process is designed for speed and simplicity:
- Fast online application. The application takes less than 10 minutes. You’ll just need your NZBN, a driver’s licence, and access to your business bank account.
- Automated data verification. Prospa’s secure system verifies your financial data on the spot, so there’s no need to hunt down and upload piles of paperwork.
- Quick decision. You’ll get a response fast, with many applicants receiving a decision within hours, often as fast as one hour.
- Rapid funding. Once approved, funds can be in your account within hours.
Prospa application process
For loans up to $150,000, Prospa doesn’t require upfront security, which can make funding more accessible for businesses without significant assets. If you’d like to explore potential repayments, the New Zealand Prospa Business Loan Calculator is a great tool to estimate the numbers before you apply.
So, even if your credit history isn’t perfect, you still have a path forward. When your business shows stability and signs of healthy growth, Prospa’s comprehensive approach could provide the opportunity to secure the finance you need to keep moving.
How to check your score and build a stronger application
Before you apply for finance, it’s a smart move to check your business’s credit score. This gives you a clear picture of how lenders might see your application. In New Zealand, you can get a copy of your credit report online from the main reporting agencies: Centrix, Equifax, and illion. Many offer free access to your report on a regular basis. You can also use third-party services like ClearScore to monitor your score at no cost.
Once you have your report, here are three practical steps you can take to build a stronger profile:
- Review and correct your report: Go through your credit file carefully. If you spot any errors, like an incorrect address or outdated NZBN details, contact the agency immediately to have them corrected. Even small inaccuracies can impact your score.
- Demonstrate consistent payments: For the next few months, make it a priority to pay all your suppliers, invoices, and IRD obligations on time. A recent history of consistent, timely payments is a strong positive signal for lenders.
- Get your documents in order: Having your GST returns, latest financial statements, and a business plan organised and ready to go shows lenders you are organised and serious. Good documentation can also help speed up the approval process.
For more guidance, see Prospa’s blog on how to improve your credit score.
Your next steps to securing business finance
A strong business profile is the most important factor when it comes to funding; your credit score is only part of the story. By showing healthy cash flow, reliable revenue, and a clear plan for growth, you’ll be in a strong position to secure finance that supports your goals.
Now that you know what lenders look for, you can check if you’re eligible for a Prospa loan in minutes with no impact on your credit score.
