Quick answer
Finance companies are non-bank lenders that specialise in practical business lending such as vehicles, equipment, working capital and some property-backed loans. In New Zealand, some are licensed deposit takers supervised by the Reserve Bank, while many fund themselves through investors or wholesale facilities. They usually decide faster and accept a broader range of borrowers than banks, at a higher cost. Check registration, read default and early repayment terms, and compare offers on total dollars.
Key points
- Finance companies sit between banks and private lenders on cost and flexibility.
- Many specialise in vehicles, equipment and working capital.
- Some take public deposits and are licensed; many don't and aren't supervised by the Reserve Bank.
- Security over the asset or business, plus director guarantees, is common.
Finance companies have been part of New Zealand’s lending market for generations. They’re the stall where tradies bought their first ute, where a transport firm funded its next truck, and where plenty of small businesses found working capital when a bank couldn’t help. Today the stall is more varied than ever, so knowing how to read it pays off.
What exactly is a finance company?
“Finance company” is a broad everyday label for a non-bank lender. The Reserve Bank splits the non-bank world into licensed non-bank deposit takers, which include some finance companies alongside building societies and credit unions, and non-deposit-taking finance companies, which lend without taking public deposits. The Reserve Bank supervises the first group, not the second.
For a borrower, that distinction matters less than the lender’s track record, transparency and fit with your needs. What unites most finance companies is a practical focus: they lend against things they understand, assess quickly, and price for the risk they’re taking.
What do finance companies lend for?
| Shelf item | Typical security | Good for |
|---|---|---|
| Vehicle finance | The vehicle | Utes, vans, trucks, company cars |
| Equipment finance | The equipment | Machinery, tools, fit-outs, technology |
| Working-capital loans | General security agreement, guarantees | Stock, wages, seasonal gaps |
| Property-backed loans (some lenders) | Mortgage over property | Larger needs, consolidating debt |
| Debt consolidation | Business assets, guarantees, sometimes property | Simplifying several facilities into one |
Many finance companies register their security on the Personal Property Securities Register (PPSR), which the Companies Office describes as an online noticeboard of legal claims over personal property. If your business already has a general security agreement registered by another lender, a new finance company will spot it, and may need that lender’s consent or a priority arrangement.
Why choose a finance company over a bank?
Owners usually end up at this stall for one of four reasons:
- Speed. Decisions on vehicles and equipment can be quick, particularly with dealer or supplier quotes in hand.
- Flexibility on history. A shorter trading record or an old credit blemish isn’t always a deal-breaker.
- Asset focus. When the asset holds its value, the lender can lean on it rather than on your balance sheet.
- Keeping the bank clear. Some owners prefer to keep bank facilities for property and overdrafts and fund vehicles separately.
The price for that convenience is usually higher fees and pricing than a bank’s. If you’re not sure the extra cost is worth it, you can ask us what’s realistic before you approach anyone. No credit check, no blast of your details to every lender.
How do you check out a finance company?
Good finance companies are easy to check. Before you apply:
- Search the Financial Service Providers Register by name or NZBN and look at the services it’s registered for.
- Look the company up on the Companies Office register to see its directors and history.
- Ask how it funds itself and whether it’s a licensed deposit taker. It’s a fair question.
- Read the default clauses. What counts as default, what extra charges apply, and how quickly can the lender act?
- Check the PPSR registration it will make. Is it over the specific asset, or a general security over everything the business owns?
Our page on checking a loan offer lists the clauses worth reading twice.
What does a finance company offer usually look like?
Illustrative example. A Nelson joinery wants $85,000 for a CNC machine. A finance company offers a four-year loan secured over the machine, with a modest deposit, an establishment fee, a small monthly account fee and a fixed early repayment fee stated in dollars. The directors give personal guarantees. Compared with an unsecured online loan, the cost per $1,000 is lower and the monthly repayment easier, because the term is longer and the machine carries most of the risk. Compared with extending a bank facility, it’s dearer but leaves the bank’s limit free for the next property opportunity. Running both through the offer comparer makes that trade-off visible in dollars.
Should you take the dealer’s finance or shop it?
When you buy a vehicle or machine, the dealer will often offer finance on the spot, usually through a finance company it works with. That can be convenient and sometimes competitive, particularly with manufacturer-backed deals. But treat it as one offer, not the only one. Ask for the total repayable, every fee and the early repayment terms in writing, then compare it with at least one alternative before you sign at the counter.
What should make you walk away?
Most finance companies are run professionally. Walk away from any lender, finance company or otherwise, that:
- asks for a fee before giving you a written offer;
- won’t tell you the total amount you’ll repay;
- pressures you to sign the same day without reading the agreement;
- wants security that’s out of proportion to the loan, such as a mortgage over your home for a small equipment loan; or
- can’t explain what happens if you repay early or fall behind.
Our scams and red flags guide covers the warning signs in more detail.
Could a finance company be your stall?
If you need a vehicle, equipment or working capital and value speed and flexibility over the lowest possible cost, a finance company deserves a look. If you have time, clean financials and a bank keen for your business, the bank may be cheaper.
Tell us what you’re funding and we’ll give you a straight view. Asking leaves no trace on your credit file, your details stay with one specialist rather than being hawked around, and a real person calls you to talk it through. Please give accurate figures on the form so the first lender we suggest is a genuine fit. Start your 60-second enquiry.
Frequently asked questions
What's the difference between a finance company and a bank?
A registered bank takes deposits and is supervised by the Reserve Bank as a bank. A finance company is a non-bank lender. Some finance companies are licensed deposit takers; others raise money from investors or wholesale funders. Finance companies typically accept a broader range of borrowers and price higher.
Do finance companies lend to new businesses?
Some do, especially when the loan is secured by a vehicle or piece of equipment with good resale value, or when directors have relevant experience. Expect closer scrutiny and possibly a deposit.
What is a general security agreement?
A general security agreement, often called a GSA, gives a lender security over all or most of a business's present and future personal property, registered on the Personal Property Securities Register. It can affect your ability to borrow elsewhere, so understand it before signing.
Can I repay a finance company loan early?
Usually, but there may be a cost. Some agreements charge a fixed fee, some a calculation based on the interest the lender expected to earn. Ask for a worked dollar example before you sign.