A secured business loan uses property you already own to unlock funding your business needs now. For many New Zealand owners, the biggest asset they have isn't in the business at all. It's the family home, a rental, or the commercial building they trade from. fundU lends $20,000 to $1m against that property, for business purposes, and makes the decision ourselves.
Security changes the conversation. Instead of being judged mainly on a credit score or last year's profit, you're assessed on something solid: real estate with equity in it, a clear purpose and a sensible way to repay. That's why property-secured business loans often succeed where other applications stall.
What is a secured business loan?
A secured business loan is a loan for a business purpose that's backed by a registered mortgage over property. If the loan isn't repaid, the lender has the property to fall back on.
With fundU, that security is always New Zealand real estate. We register a mortgage on the record of title, either as a first mortgage or as a second mortgage behind your existing bank loan. While the loan is in place, you keep owning and using the property as normal. When the loan is repaid, the mortgage is discharged.
It's worth being clear on what a secured loan is not. It isn't a personal home loan, and it isn't a loan secured against your stock, vehicles or book debts. It's business funding with property standing behind it.
Why does property security make it easier to get funded?
Property reduces the lender's risk, and lower risk gives the lender room to say yes. That's the simple reason secured business loans reach people other lending doesn't.
In practical terms, security lets us:
- Lend larger amounts than most unsecured products, up to $1m
- Consider bad credit, defaults and arrears case by case
- Look past a short trading history or a single rough year
- Skip financial statements and tax returns for the initial assessment
- Offer structures like capitalised interest, where no scheduled monthly repayments are required during the term
- Price each loan on its own circumstances, giving the sharpest rate available for that situation
Your credit history still forms part of the picture. If you haven't checked it lately, you can get a free copy from each of New Zealand's credit reporters, Centrix, Equifax and Experian, as Consumer Protection explains. Knowing what's on it helps you tell us the full story upfront. For more on this, see bad credit business loans.
What kinds of property can secure a business loan?
We lend against residential, commercial and industrial property throughout New Zealand. Some land and lifestyle property is considered case by case.
That covers a lot of ground. A villa in Mount Eden, a rental unit in Hamilton, a retail strip shop in Napier, a light industrial unit in Christchurch, a workshop and yard in Whangārei. The property doesn't need to be connected to your business at all. What matters is its value, its condition, how easily it could be sold and what's already owed against it.
If you own the building your business operates from, our page on commercial property loans covers that specifically.
Who can own the property you use as security?
Ownership can sit with you, your company, your family trust or a supporting party. Each works a little differently.
| Who owns the property | How it works | Worth knowing |
|---|---|---|
| You personally | You sign the mortgage as owner and borrower or guarantor | The most straightforward setup |
| Your company | The company grants the mortgage; directors sign | Common for commercial and industrial premises |
| Your family trust | The trustees agree and sign the mortgage | Your lawyer checks the trust deed allows it |
| A supporting party | A family member offers their property and acts as guarantor | They'll need their own lawyer to explain the documents |
Trust-owned property is very common in New Zealand, and it's no barrier with us. Our guide to borrowing against family trust property explains the steps trustees usually go through.
If a parent or relative is helping by offering their property, have an honest conversation early about the exit plan. Knowing exactly how and when the loan will be repaid gives everyone confidence, and it's one of the first things we'll ask about.
How much equity do you need for a secured business loan?
Equity is what your property is worth minus what's owed against it. The more equity you have, the more room there is to lend, but there's no single magic number.
Here's how it works in plain terms. Say your home is worth $900,000 and your bank mortgage is $400,000. Your equity is $500,000. A secured business loan sits within that equity, leaving a buffer so the combined lending stays sensible against the value. How big that buffer needs to be depends on the property type, its location, how quickly it could be sold and the strength of your exit.
We'll look at all of this together and tell you plainly what's possible, from $20,000 up to $1m. For a deeper explanation, read how much can I borrow against my property. If the property already has a bank loan you want to keep, a second mortgage is usually the tool for the job. If it's freehold, or the current lender needs repaying, it'll be a first mortgage.
What can a property-secured business loan pay for?
Once the security is in place, the funds can go towards almost any legitimate business need. Owners tend to use secured lending for bigger, more important moves, where a small unsecured top-up simply wouldn't touch the sides.
- Settling a GST, PAYE or provisional tax bill before penalties and enforcement build up
- Replacing several high-cost short-term loans with a single, simpler facility
- Stock ahead of a busy season, or a bulk buy at a supplier discount
- A fit-out, a second location or buying out a business partner
- Machinery, trucks or vans, including private and second-hand purchases
- Covering wages and suppliers while a large contract ramps up
The only rule is that the purpose must be for the business rather than personal use.
How is the security registered and released?
Your lawyer and ours handle it. The mortgage is registered on the record of title through LINZ, and it's removed the same way once the loan is repaid.
The process runs like this:
- Title check. We review the record of title to confirm ownership and any existing mortgages, caveats or other interests.
- Valuation. Depending on the property and loan, we'll usually need a current valuation from a registered valuer.
- Loan documents. Once approved, documents go to your lawyer, who explains them to you and any owners or guarantors.
- Registration and settlement. The lawyers register our mortgage through LINZ and the funds are paid out.
- Repayment and discharge. When the loan is repaid, the mortgage is discharged and taken off the title.
Getting the owners' paperwork ready early, especially for trusts and companies, is the single best way to keep things moving.
What does a secured business loan look like in practice?
The best way to see how security unlocks funding is through a typical case.
Example scenario
A plumbing and gas-fitting company in Canterbury has grown quickly, but its trading history is only 18 months long and one director has an old default on his credit file. The business needs $140,000 for two new vans, tools and working capital to take on a council maintenance contract. The bank wants three years of accounts.
The directors' family trust owns a rental property in Rolleston worth about $680,000 with a bank mortgage of $310,000. fundU lends $140,000 by second mortgage over the rental, with the trustees signing the documents. Interest-only terms keep repayments manageable, and the plan is to refinance to a bank once the business has two full years of accounts showing the contract income.
What you'll need for a secured business loan
To get started, pull together the basics. Most owners can do this in an afternoon.
- The property address and a rough idea of its value
- The name of each owner on the title, whether that's you, a company, a trust or a supporting party
- The balance of any existing mortgage on the property
- What the funds are for and how much you need
- How the loan will be repaid, and roughly when
- Photo ID for every borrower, owner and guarantor
- For trusts, the trustees' names and a copy of the trust deed when we ask for it
- Supporting evidence if needed, such as bank statements, contracts, invoices or IRD statements
No financial statements or tax returns are needed for the initial assessment.
Ready to unlock the equity in your property?
If you or someone close to you owns property with equity in it, a secured business loan could be the fastest route to the funding your business needs. Enquiring is free, quick and won't touch your credit score. A lending specialist will get back to you by phone, or you can call 09 875 4577 directly.
See if you qualify for a secured business loan with fundU.
Frequently asked questions
What is a property-secured business loan?
A property-secured business loan is money lent to a business with a registered mortgage over real estate as security. If the loan isn't repaid, the lender can rely on the property. That security lets fundU lend larger amounts, from $20,000 to $1m, and look beyond credit history or trading records when making a decision.
Can I use property owned by my family trust as security?
Yes. fundU can lend against property owned by a family trust, as long as the trustees agree and sign the loan documents. Your lawyer will check the trust deed allows it and explain the documents to the trustees. Trust-owned homes and rentals are a common source of security for New Zealand business owners.
Can a family member use their property to support my business loan?
Often, yes. A supporting party, such as a parent or sibling, can offer their property as security and act as guarantor. They'll need their own lawyer to explain the documents and what the guarantee means for them. fundU assesses these arrangements case by case and looks closely at the exit plan so the property is released on time.
How much equity do I need for a secured business loan?
Equity is the difference between what your property is worth and what's owed against it. The more equity there is, the more room there is to lend. fundU looks at the value, existing lending, the loan purpose and your exit plan together, then tells you plainly what's possible, from $20,000 up to $1m.
What happens to my property when the loan is repaid?
Once the loan is repaid in full, our mortgage is discharged and removed from the record of title. Your lawyer and ours handle this through LINZ as part of the payout. Any existing bank mortgage is unaffected, and the property goes back to being secured only by whatever lending was there before.
Can I get a secured business loan with bad credit?
In many cases, yes. Because a secured business loan is backed by property, fundU can consider applicants with defaults, arrears, IRD debt or a past bank decline. We look at whether the loan puts your business in a better position and how it will be repaid, rather than rejecting you on a credit score alone.
A practical next step
Ready to see what's possible?
Tell us what the business needs, when you need it and what property is available. A fundU lending specialist will call you back to talk it through — enquiring is free and won't affect your credit score.