Private business loans from a direct New Zealand lender

Private business loans give New Zealand owners another way to fund their business when a bank is too slow, too rigid or has simply said no. fundU is a direct private lender. We're not a bank and we're not a broker: we set our own criteria, assess applications ourselves and fund the loans we approve. We lend $20,000 to $1m for business purposes, secured on New Zealand property.

The words "private lender" can sound mysterious, so this page explains exactly what a non-bank lender is, how it differs from your bank and from a broker, how we assess an application, and what to look for when choosing one. If you're weighing up options, it should give you everything you need to make a confident decision.

What is a private business lender?

A private business lender is a non-bank lender that uses its own funds and its own rules to make loans to businesses. It doesn't follow a bank's standardised credit policy, which means it can consider situations a bank would automatically decline.

That flexibility is the core of private lending. A bank typically scores an application against fixed criteria: years trading, profit history, credit score and debt servicing ratios. If you miss one box, the answer is often no, however strong the rest of your situation. A private lender can weigh up the whole picture and make a judgement.

At fundU, the whole picture means four things: the property you're offering as security, the purpose of the loan, how it will be repaid, and the story behind your business. Our loans are short to medium term, secured by first or second mortgage, and priced on your individual circumstances with the sharpest rate available for your situation.

Private lender vs bank vs broker: what's the difference?

The simplest way to see it: a bank lends under strict policy, a broker arranges loans from other lenders, and a direct private lender like fundU makes its own decisions and funds them itself.

	Bank	Broker	Direct private lender (fundU)
Who provides the money	The bank	Another lender	fundU
Who makes the decision	Bank credit team, often a committee	The lender the broker chooses	Our own credit team
Typical paperwork	Financial statements, forecasts, tax returns	Whatever each lender on the panel requires	No financials or tax returns for the initial assessment
Flexibility on credit issues	Usually limited	Depends on the lender	Case by case
Speed	Often weeks	Depends on the lender	Fast; in some cases as little as 24 hours once approved
Who you deal with	Relationship manager, then credit	Broker, then the lender	The lending team from start to finish

Our guide to private lender vs bank vs broker goes into more depth on each option.

Why do New Zealand businesses use a non-bank lender?

Because a lot of perfectly good businesses don't fit a bank's template. The Reserve Bank has pointed out, in its May 2026 Financial Stability Report, that small firms lean on both banks and non-bank lenders for credit and are more likely to be offered tougher terms.

The most common reasons owners come to a private lender include:

• A bank decline because of one loss-making year, a thin trading history or a policy rule
• Time pressure, where a bank process can't meet the deadline
• Credit issues such as defaults, arrears or past payment problems
• IRD debt that a bank won't lend alongside
• Irregular income for self-employed owners, seasonal operators and contractors
• Out-of-date accounts that can't be finalised quickly
• Unusual purposes that don't fit a standard bank product

If your bank has already said no, our page on business loans after a bank decline walks through your next steps. If paperwork is the problem, see low doc business loans.

How does a private lender assess your application?

We focus on substance rather than forms. Instead of starting with a spreadsheet, our lending team starts with a conversation.

Here's what we look at, and why:

1. The property. Its value, type, location and any existing lending tell us how much security there is.
2. The purpose. What the money is for and whether it leaves your business in a better position.
3. The exit. How the loan will be repaid, whether that's a sale, a refinance to a bank, a contract payment or cash flow.
4. The story. What's happened in the business, what's changed and why now. Context often explains what a credit file can't.
5. Supporting evidence. Where needed, bank statements, contracts, invoices, accountant letters or IRD statements can fill the gaps instead of full financials.

It's worth checking your own credit record before you apply, so there are no surprises. You can request a free copy from each credit reporter, as govt.nz explains. If something unexpected turns up, tell us about it early.

A private lender isn't a lender of last resort. It's a different kind of lender, one that weighs up the whole situation. Coming to us early, before a problem becomes a crisis, usually means more options and a better outcome.

Is private lending only for businesses in trouble?

No. Many of the owners we lend to are growing, profitable and simply need to move faster or more flexibly than their bank allows.

A builder might need to fund a large contract before the first payment claim is paid. A hospitality operator might be buying a second venue before the vendor accepts another offer. A manufacturer might need to buy equipment from an overseas supplier this month. None of these businesses is in trouble. Each needs a lender that can say yes quickly and structure the loan around the opportunity.

Of course, private lending also helps owners through hard times: clearing IRD debt, responding to a statutory demand, or replacing expensive short-term loans. Both kinds of borrower are welcome. What matters is a sensible purpose and a realistic way out.

What should you look for in a private lender?

Choosing a private lender deserves a little care. Use this checklist when comparing your options:

• Are they a direct lender? Ask whether they make the decision and fund the loan themselves, or pass your application on.
• Do they explain the terms clearly? You should understand the repayment structure, the term and what happens at the end.
• Do they ask about your exit? A lender that discusses how you'll repay is thinking about your outcome, not just the loan.
• Is the pricing tailored? Each loan should be priced on your circumstances, not a one-size-fits-all offer.
• Do they answer the phone? Speed and clarity depend on being able to talk to a real person.
• Do they want your lawyer involved? A reputable lender expects you to have your own lawyer explain the documents.

Read more about how we work on the fundU difference page.

How does a private business loan end?

Every private business loan is built with an ending in mind. Because our loans are short to medium term, the exit is agreed at the start and shapes the whole structure.

Common exits include selling a property, refinancing to a bank once your accounts show a stronger position, receiving a contract payment or retentions, or repaying from business cash flow. Repayments during the term can be interest-only, principal and interest, or capitalised interest with no scheduled monthly repayments, depending on the approved terms. For a full explanation, read our guide to exit strategies for short-term business loans.

What does a private business loan look like in practice?

Here's a typical case where a private lender fitted better than a bank.

Example scenario

A self-employed electrician in Otago has run a successful business for 12 years, but a large client went into liquidation last year owing him money, leaving a loss in his accounts and a default from a supplier on his credit file. He now has a chance to buy a smaller competitor's business, including its van, stock and service contracts, for $190,000. His bank declines because of the loss year.

He owns his home in Mosgiel, worth about $760,000, with a bank mortgage of $290,000. fundU lends $200,000 by second mortgage over the home to buy the business and fund some working capital. Interest is capitalised, so there are no scheduled monthly repayments while he integrates the new customers. The plan is to refinance to his bank after a full year of stronger trading.

What you'll need to apply for a private business loan

You can get started with a short conversation and a few details:

• What the loan is for and how much you need
• The address and ownership of the property you're offering as security
• An estimate of its value and any existing mortgage balance
• Your plan for repaying the loan
• A brief outline of your business and any credit or tax issues we should know about
• Photo ID for all borrowers, owners and guarantors
• Supporting documents if requested, such as bank statements, invoices, contracts or IRD statements

Ready to talk to a direct private lender?

If a bank isn't the right fit for your business right now, fundU could be. The online enquiry is free, quick and leaves your credit score untouched. One of our lending specialists will ring you back, or you can reach us on 09 875 4577. You can also compare with our standard secured business loans.

See if you qualify for a private business loan today.