Quick answer
Asset financiers lend against a specific item such as a vehicle, machine, tool or piece of technology, using that item as security and registering their interest on the Personal Property Securities Register. They include bank asset-finance arms, finance companies, manufacturer-linked lenders and dealer finance. Asset finance suits businesses buying equipment that holds its value. Compare offers on total cost, deposit, balloon payments, early payout terms and what happens to the asset at the end.
Key points
- The asset itself is the main security, registered on the PPSR.
- Lenders include banks, finance companies, manufacturers and dealers.
- Balloon payments lower repayments but leave a lump sum at the end.
- Investment Boost changed the tax maths on new assets from 22 May 2025.
Some stalls only sell one thing, and sell it well. Asset financiers are like that. They don’t want to fund your wages or your marketing campaign; they want to fund the excavator, the refrigerated van, the commercial oven or the server rack. Because the thing you’re buying backs the loan, they can often say yes when a general lender would hesitate.
Who sells asset finance in New Zealand?
The asset finance stall has several stallholders, and it pays to know which one you’re talking to:
| Who | How they usually reach you | Shopper’s note |
|---|---|---|
| Bank asset-finance arms | Through your business banker | Often sharp pricing for existing customers with strong financials |
| Finance companies | Directly or via brokers | Broader appetite; quick decisions on common assets |
| Manufacturer-linked finance | Through the brand’s dealers | Can include promotional terms on new models |
| Dealer-arranged finance | At the point of sale | Convenient; always compare before signing |
| Specialist equipment lenders | Directly or via brokers | Comfortable with niche or high-value equipment |
business.govt.nz describes asset finance simply: a loan to buy specific assets, repaid monthly. The variations are in the detail.
Why lend against the asset?
For the lender, the asset is a comfort blanket. If the business can’t pay, the lender can recover the asset and sell it. That means asset financiers care a lot about:
- what the asset is and how easy it is to resell;
- its age and condition, especially if it’s second-hand;
- who’s selling it, a dealer, an auction or a private seller;
- the deposit or trade-in, which reduces the lender’s exposure; and
- the business’s ability to repay, usually judged from bank statements, accounts and credit history.
Security is registered on the Personal Property Securities Register (PPSR), which the Companies Office describes as an online noticeboard for legal claims over personal property. Before you buy anything second-hand, search the PPSR yourself so you don’t inherit someone else’s lender.
What shapes the cost of asset finance?
Asset finance offers are easier to compare than some loans, but they still have moving parts:
- Deposit. More upfront usually means a lower cost per dollar borrowed.
- Term. Longer terms lower each repayment but increase the total paid. Matching the term to the asset’s working life is sensible.
- Balloon or residual. A lump sum at the end lowers repayments now but needs a plan later.
- Fees. Establishment, documentation, PPSR registration and monthly account fees.
- Early payout. What it costs to clear the loan if you sell or upgrade the asset early.
- Insurance requirements. Most lenders require the asset to be insured, which is a real cost.
Our offer comparer handles all of these in dollars and flags balloon payments and unclear early payout costs.
Hire purchase, loan or lease?
Different structures suit different businesses. With a loan secured over the asset (sometimes called a chattel loan or secured asset loan) or hire purchase, you end up owning the asset once it’s paid off. With a lease, you use the asset for a period and then return it, renew, or buy it. Ownership, tax treatment and GST all play out differently, so talk to your accountant about which suits your situation. The financier’s job is to fund it; the tax question is for your adviser.
That’s especially true since Investment Boost. Inland Revenue says businesses can claim 20% of the cost of eligible new assets as an immediate deduction, then depreciate the remaining 80% as usual, for assets acquired from 22 May 2025. It doesn’t change the loan, but it may change the after-tax cost of buying new rather than used, or buying now rather than later. Our guide to the best time to apply touches on timing.
If you’re weighing up whether to fund an asset through a dedicated asset loan or a broader business loan, ask us. There’s no credit check, and you’ll talk to a person, not a call list.
What does a sensible asset finance shop look like?
Illustrative example. A Waikato contractor needs a $160,000 excavator. The dealer offers finance over five years with a 20% balloon. The contractor’s bank offers a four-year loan with no balloon but wants a general security agreement over all business assets. A finance company offers four years secured only over the excavator, with a small deposit and a stated early payout fee. Lined up in dollars, the dealer offer has the lowest monthly repayment but the highest total cost and a large lump sum in year five. The bank offer is cheapest overall but ties up all business assets. The finance company sits in between. The contractor chooses based on cash flow, flexibility and how they feel about a general security, not just the monthly figure.
What should you check before signing?
- Is the security limited to this asset, or is it a general security over everything?
- Is there a balloon, and how will you pay it?
- What exactly happens if you sell, write off or upgrade the asset early?
- Which fees are included in the repayments and which are charged separately?
- Do directors have to give personal guarantees?
- For used assets: have you searched the PPSR and checked the asset’s history?
Our page on checking a loan offer goes clause by clause.
Want help shopping for equipment finance?
If you’ve found the asset and want finance that suits your cash flow, tell us about it. Enquiring is free and doesn’t leave a mark on your credit file. Your details stay with one specialist; they aren’t auctioned off to a list of lenders. A real person will look at the asset, the business and the timing, and call you. Please include accurate details of the asset and any deposit or trade-in so the first option we suggest fits. See if you qualify.
Frequently asked questions
What is asset finance?
Asset finance is a loan or lease used to buy a specific business asset, such as a vehicle or machine, with that asset as the lender's main security. You use the asset to earn income while you repay.
What does a PPSR registration mean for my business?
When an asset financier lends, it usually registers a financing statement on the Personal Property Securities Register. That's a public notice of its security interest. Other lenders and buyers can see it, and it's removed once the loan is repaid.
What is a balloon payment?
A balloon, or residual, is a lump sum due at the end of the term. It lowers your regular repayments but means you need to pay, refinance or sell the asset when it falls due. Plan for it from day one.
Can I finance second-hand equipment?
Often, yes, though lenders look closely at the asset's age, condition and resale value. Private sales and very old or highly specialised equipment can be harder to finance or may need a bigger deposit.
Does Investment Boost affect asset finance?
Investment Boost is a tax deduction, not a loan feature. Inland Revenue says businesses can claim 20% of the cost of eligible new assets as an expense, with normal depreciation on the remaining 80%, for assets from 22 May 2025. Talk to your accountant about eligibility before buying.