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Fixed-term business loans

Resolve your business cash flow problems while you repay over a fixed period.

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Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Monthly Service Fee Application Fee
Harmoney Business Loan
6.99% - 29.99%
$2,000
$50,000
Up to 60 months
$0
$200-$450 depending on loan size
Apply for an unsecured business loan up to $50,000 with no early repayment fees. Eligibility: Be a NZ resident/citizen and have a good credit score.
Pioneer Finance Secured Business Loan
11.95% - 27.95%
$1,000
$100,000
Up to 7 years
$12
$270 - $780 depending on size and security
Secured business loans from $1,000 - $100,000. Eligibility: Be 18+ (may need a guarantor); be a NZ citizen, resident or have a relevant work visa; have a regular source of income
Simplify Commercial Vehicle Loan
6.50% - 14.5%
$5,000
$500,000
12 to 60 months
$0
$100 - $500, depending on loan amount, lender and term
Secured vehicle finance from $5,000 to $500,000. Eligibility: Must be 18+, a New Zealand resident or permanent citizen and have an income of at least $500 per month.
Lending Crowd Business Loan
6.97%-16.99%
$2,000
$200,000
3 or 5 years
$0
$250-$1,450 depending on your borrowed loan amount
A secured loan up to $200,000. Eligibility: Full ownership of your business (with your spouse), over 18 months in business, earn annual sales over $80,000.
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If your business experiences a cash flow dip, you can choose between several loan options to resolve it. Whether you need new equipment; to fill an order or help from a third party to pay suppliers, the right fixed-term business loan can help boost your business’ capacity and increase turnover.

When you apply for a fixed-term business loan, you agree with the lender to make repayments over a fixed period. Lenders consider your business profile, and the loan amount you can afford. If approved, you may have the money in your account within one day of submitting your application.

How does a fixed-term business loan work?

If your application for a fixed-term loan is approved, the lender provides you with the loan amount, and you have to repay the agreed amount over a fixed term.

The terms offered depends on the purpose of the loan and the type of lender. Online and alternative lenders approve small business loans with short repayment periods, usually between three months and five years.

If you require a more substantial loan for purchasing property, fleet vehicles or heavy machinery, traditional banks provide loan options with repayment periods of up to 15 years or longer. For example, the ASB offers loan terms of up to 20 years.

How to compare fixed-term business loans

There are several products available from both traditional and alternative lenders, so it’s a good idea to compare the options before applying. Here are a few factors to consider:

  • Secured vs unsecured. If you’re applying for a secured fixed-term loan, you need to provide any assets you have of value to use as collateral. If you can’t make repayments, the lender will sell some or all of your assets to cover the amount you owe. An unsecured loan doesn’t require collateral, but the loan terms may be strict to minimise the lender’s risk.
  • Lending amount. Loan providers may have different lending criteria and will assess your personal and professional profiles; credit history; business type; purpose of the loan and the value of your assets. You are then offered loan terms, based on what the lender assesses you can afford to repay.
  • Interest rates. Rates can either be fixed or variable (or both) over the term of your loan. While your repayment amount might fluctuate, the term remains fixed. Some loan products feature an introductory fixed rate for a certain period, after which it reverts to a standard variable rate for the rest of the loan term.

Have you weighed up the benefits and drawbacks of a fixed-term loan for your business?

Here are some of the positive and negative aspects of fixed-term business loans.

  • Regularity. You have peace of mind with regular repayments. The loan amount might vary depending on interest rate fluctuations, but the term remains unchanged.
  • Investment. Every repayment represents an investment in your purchase. You also increase your assets portfolio; grow your business and become a more financially responsible business owner.
  • Hard pull credit checks. Applications for fixed-term business loans lead to hard pull credit checks (where the lender looks at your credit report to check if you are creditworthy). These can negatively impact your credit score, so make sure you are eligible before applying.
  • Jeopardising assets. Secured fixed-term business loans require assets as collateral. The lender can seize your assets if you can’t repay the loan.
  • Penalties for early repayment. Settling the outstanding amount before the end of a loan period is a good way to save on interest. However, the lender loses out on that interest, so you may be penalised for ending the fixed-term loan contract.

Things to avoid with fixed-term business loans

Consider the following factors when applying for a fixed-term business loan.

  • Can you afford it? While a business loan is a means to fix cash flow problems, lenders won’t approve a loan if your business can’t afford to repay it. Lenders conduct credit checks that reflect on your credit score; the more hard pull credit enquiries, the weaker your overall credit score.
  • Check early repayment policies. Some lenders might levy a penalty fee if you repay the whole loan before the end of the fixed term. Check lenders’ policies before accepting loan terms.
  • Consider the repayment period. If you’re taking out a small loan amount, you can consider repaying it over a shorter period. Spreading your repayments over a longer period will chip away at your business’ profits, but if the loan term is too short and the repayments too high, they could become unmanageable.

Have more questions about fixed-term business loans?

Who is eligible for this loan type?

Lending criteria vary depending on the lender, but factors such as time in the industry; assets; credit score and the loan amount are key in the lender’s decision.

Which lenders offer fixed-term business loans?

Currently, there are several online and alternative lenders offering fixed-term business loans, including those on the page above. The fixed term may be between three months and five years. Traditional banks often have a large portfolio of business loan products for larger amounts, although lending criteria might not be as flexible as their online counterparts.

Can I get an unsecured fixed-term loan?

Yes. However, while an unsecured fixed-term loan requires no assets, lending criteria and loan terms are less flexible. These are usually ideal for small business loans with a shorter repayment period.

What happens if I can’t repay?

Immediately let the lender know if you can’t make a repayment, or repay the loan. Most lenders will propose solutions like postponing or reducing payments. If you have a secured loan where an asset has been put up as collateral, the lender will sell your asset to cover the outstanding amount.

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