commercial loan

What is Asset Finance and How it Works for NZ Businesses

July 1, 2025

If you run a small business, then you already know it presents a range of challenges. Growth is the most important thing for a small business owner because it gives you a foothold, letting you access bigger customers, better stability, and increased revenue. But this game can feel a lot like a catch-22, because it often takes money to make money, especially if you need specific equipment to get off the ground.

Enter: asset finance. A way for Kiwi business owners to access specific equipment for immediate use while paying it off, just like a normal business loan. If you are looking for a way to grow without putting up all of your reserved capital for a single piece of equipment, tapping one of the many policies for asset finance NZ has to offer might be for you.

But what is it? And is asset finance right for you? This blog post will help you to answer those questions, so read on for a breakdown from your resident business finance experts.

What is Asset Finance?

Asset finance is a particular kind of secured loan, where the piece of equipment that you buy or replace acts as the security for the loan itself. The type of asset finance that New Zealand businesses access allows them to add a vital piece of equipment to their inventory without incurring a significant amount of immediate capital, then pay for the purchase over time.

How does asset finance work?

Unlike some other business loans, you don’t get cash-in-hand or a direct deposit into your business’s bank account. Instead, what usually happens is that you will apply for a loan of a certain amount to purchase a specific piece of equipment (or a vehicle). Once that is approved, you’ll buy that piece of equipment, and the funds will be transmitted directly to the seller, and the loan repayment period will begin.

Is asset finance right for you?

The terms of each policy for asset finance NZ businesses’ access will be unique, just like each business loan, so you should expect your policy to be tailored to the needs of your business.

That said, some solid benefits across the board make asset finance a great choice for Kiwi businesses that rely on certain types of equipment to stay operational:

  1. The asset itself will provide the loan security, which means, in most cases, the loan won’t affect your ability to secure credit through other means.
  2. If you need to upgrade your equipment quite often, you might be able to secure an asset rental policy where your broker or lender purchases the asset and rents it to you for a designated period.
  3. Every policy for asset finance NZ-wide should be tailored to match the life of the piece of equipment you’re buying, and payments can be carefully scheduled to meet your abilities as a business.
  4. Tapping a specific piece of equipment can open up a lot of extra financial opportunities for you, making it easier to pay back the loan and grow your business.

If you run a business and need to upgrade your machinery, equipment, or even your facility, asset finance might be the right call for you.

Accessing Asset Finance NZ-Wide: What to Know

Asset finance is pretty unique because it doesn’t require you to put up capital or any additional security from your existing business assets. You just need to be comfortable with putting up the asset you’re acquiring as the loan’s security while you pay down the loan.

Because of this structure, there are one or two things to know before you sign on the dotted line:

  • You’ll need to do your research before applying, as the application process requires a fairly accurate estimate of how expensive the piece of equipment you’re hoping to buy is.
  • Keeping up with the loan is important because falling too far behind on repayments may result in the asset being reclaimed as a way to pay down the remainder of the loan. To avoid this, it’s important to estimate your business’s ability to create income with the new piece of equipment as accurately as possible. Qualified brokers can help with this.
  • The value of most assets tends to depreciate over time, so keep that in mind for long-term financial evaluations of your business!
  • If you’re after long-term funding, a standard business loan might be a better solution for you. Asset finance policies tend to suit one-off purchases with specific repayment terms.

If there is one thing to take away from this article, it’s this: every single business is unique. What your business needs to grow and get stable might be different to other businesses in other industries, or even your direct competitors.

The best way to be sure if asset finance in NZ is the right thing for you is to reach out to an experienced financial expert who can help assess your needs, review your options, and collaborate on finding the right direction.

Growing a business? Get help from Spinach.

We’re New Zealand’s friendliest business loan brokers, offering a quick and easy way for you to access the capital your business needs to grow. If you’re looking for asset finance in New Zealand, simply complete your online application, and we’ll be in touch (often within the same day). How good is that?

If you have any questions, don’t hesitate to get in touch with our friendly team. We’re here to help you grow your way.