Business owners in New Zealand often talk about “the bank” and “everyone else” as if there were two options. In practice there are three distinct kinds of lender, each built for a different job. Understanding what each is optimised for makes it much easier to know where to go, and when to switch.
The three lender types in one sentence each
- Banks lend deposit money at scale, under tight prudential rules, using standardised credit policies.
- Non-bank lenders (finance companies, fintechs, specialist funders) lend their own, investor or wholesale money, with more room for judgement and speed.
- Private lenders (individuals, family offices, pooled funds) lend against registered mortgages over property, focusing on the security and the exit.
How big is each part of the market?
Banks dominate. The Reserve Bank estimates non-bank lending institutions hold just under 3% of intermediated credit, with around $23 billion of lending as at March 2024, much of it to businesses and consumers. Its May 2026 Financial Stability Report describes non-bank sources such as wholesale-funded lenders, private credit funds and fintechs as a smaller part of the SME market, often focused on niches. Private mortgage lending isn’t separately measured in the same way, but it’s a well-established part of the property-secured market.
The comparison
| Bank | Non-bank lender | Private lender | |
|---|---|---|---|
| Typical speed | Weeks | Days; unsecured sometimes same day | Days; sometimes within 24 hours of approval |
| What drives the decision | Historical financials, serviceability models, credit history | Turnover and bank statements, or security | Property value, equity and exit |
| Paperwork | Heavy | Light to moderate | Light |
| Credit history | Often decisive | Considered case by case | Considered case by case |
| Security | Property, GSA, guarantees | Varies: none, assets or property | Registered mortgage |
| Term | Short to long | Short to medium | Short to medium |
| Cost | Usually lowest | Higher | Higher |
| Flexibility | Low | Medium | High |
When does a bank win?
- You have up-to-date financial statements showing consistent profit.
- Your industry and structure sit comfortably inside bank policy.
- Your credit record is clean.
- You have time.
- You want a long-term facility, such as a commercial property loan over many years.
If all five are true, start with your bank, and perhaps a second bank for comparison. It’s usually the cheapest money available.
When does a non-bank lender win?
- You’ve traded long enough to have a bank-statement track record (often 6+ months) but your accounts are behind or show a weak year.
- You need a decision in days, not weeks.
- You have a blemish on your credit file.
- You don’t own property, or don’t want to use it.
- The need is short to medium term: stock, equipment, a seasonal gap, a marketing push.
When does a private lender win?
- You own property with equity, perhaps already mortgaged.
- Speed is critical: a settlement, an IRD deadline, a purchase with a date on it.
- The bank has declined or would take too long, but the security is strong.
- There’s a clear exit: a sale, a refinance, a contract payment.
What about cost?
It’s tempting to compare lenders on headline price alone. A better frame is total cost versus total benefit. A cheaper bank loan that arrives after the opportunity has gone costs you the opportunity. A dearer non-bank loan that captures a supplier discount, avoids IRD penalties or secures a contract may leave you better off. We never quote rates in advance, because every loan is priced on the borrower’s individual situation; what we do is find the sharpest option available for yours. Our guide when paying more for speed makes sense goes further.
Can you use more than one?
Yes, and many businesses do, deliberately:
- a bank for the long-term property loan and transactional banking;
- a non-bank line of credit for seasonal swings;
- a private lender for a short, time-critical bridge, repaid when the bank catches up.
The key is that each piece has a clear job and a clear end. Our guide to switching between bank and non-bank explains how to move between them without burning bridges.
Questions to ask any lender
- How long from application to funds, realistically?
- What will you need from me, and when?
- What are all the costs: interest, establishment, legal, early repayment, default?
- What security will you take, and will you register it?
- What happens if I want to repay early, or can’t repay on time?
Where we fit
We arrange non-bank and private lending: property-secured business loans from $20,000 to $1m, and unsecured loans and lines of credit for businesses usually trading 6+ months. If a bank is clearly your best option, we’ll say so.