A lot of owners approach non-bank lenders the way they approached the bank: bracing for a mountain of forms and a verdict on their last three years. The reality is different. Non-bank lenders still assess risk carefully, but they look at different evidence, and they’re allowed to use judgement. Knowing what they’re looking for makes the process faster and the outcome better.
The five questions every lender is really asking
- What happens if this goes wrong? That’s security: property, assets, or the strength of cash flow.
- Can the business afford it? Serviceability, measured from turnover and commitments.
- What’s it for? Purpose tells the lender whether the loan is likely to help or just delay a problem.
- How does it end? The exit: trading cash flow, a sale, a refinance, a contract payment.
- Is there anything I should worry about? Credit history, tax arrears, legal actions, conduct.
Banks ask the same questions but answer them mainly through historical financial statements and standard models. Non-bank lenders answer them with more current, more direct evidence.
For property-secured loans: the security leads
When a loan is secured by a registered mortgage, the lender’s first focus is the property:
- Value. What would it sell for in a reasonable time? A registered valuation may be needed.
- Equity. Value minus existing mortgages and charges. Second-mortgage lenders look at what’s left behind the first mortgage.
- Marketability. A standard house in Hamilton is easier to assess than a rural block or a unit in a mixed-use building.
- Title. Cross-leases, unit titles, caveats and easements all need checking.
Because the security carries so much weight, no financials or tax returns are needed for the initial assessment through our panel, and bad credit, defaults and arrears are considered case by case.
For unsecured loans: the bank statements lead
Without property, lenders read your recent business bank statements, often through a secure data connection, and look for:
| What they check | What good looks like | What raises questions |
|---|---|---|
| Monthly deposits | Steady or predictably seasonal | Sharp, unexplained drops |
| Balance behaviour | Account rarely runs to zero | Frequent overdrawn days |
| Dishonours | Few or none | Repeated failed payments |
| Existing debt repayments | Manageable relative to income | Several short-term lenders debiting |
| Tax payments | Regular GST and PAYE to IRD | No tax payments visible, or arrears |
| Trading history | 6+ months | Very new account |
Purpose: why it matters more than you think
“Working capital” is a fine answer, but a specific one is better: “to buy stock for the Christmas period, which historically turns over within eight weeks” or “to pay out IRD arrears so the deduction notice is lifted.” A clear purpose shows the lender how the loan improves the business, and helps them size it properly.
Exit: the question that decides short-term loans
Most non-bank business loans are short to medium term, so lenders need to believe the loan will be repaid or refinanced on time. Strong exits are concrete and within your control, or close to it:
- trading cash flow that clearly covers repayments;
- a signed sale agreement or a property that will be listed;
- a contract payment with a known date;
- a bank refinance once accounts are finalised (with a realistic view of what the bank needs).
Our guide to planning your exit explains how to make this part of your application strong.
Credit history: context, not a verdict
A non-bank lender will ask about defaults, arrears or judgments. What they want is the story:
- When did it happen, and is it resolved?
- Why did it happen? A one-off event (a failed customer, a health issue, a flood) reads differently from a pattern.
- What’s changed since?
Being upfront helps. Surprises found in a credit check are far more damaging than issues disclosed early.
Tax position
Inland Revenue arrears matter because IRD has strong collection powers, including deduction notices to your bank. Many non-bank lenders will fund a loan that pays IRD out, but they’ll want to see how current GST and PAYE will be kept up. See IRD tax debt options.
How to make an assessment go smoothly
- Know the exact amount and purpose.
- Have your property details, or recent bank statements, ready.
- Disclose credit issues upfront, with context.
- Have a clear exit in one sentence.
- Respond quickly to questions; speed on your side makes speed on theirs possible.
Our pre-application checklist has the full list.
Where we fit
We arrange property-secured business loans from $20,000 to $1m and unsecured loans and lines of credit for businesses usually trading 6+ months. A lending specialist will talk through how a lender is likely to view your situation before anything formal happens.