Yes, you can. Using the equity in your home to fund your business is one of the most common reasons people ring the Hotline, and it’s often the quickest way to raise a meaningful amount without a bank asking for three years of accounts.
Here’s how it works in New Zealand, who needs to be involved, and the questions worth asking yourself first.
How does a business loan secured on your home work?
The lender makes a loan for a business purpose and registers a mortgage over your home as security. If the home already has a mortgage — most do — the business loan usually sits behind it as a second mortgage. Your existing home loan stays exactly as it is: same bank, same repayments, same terms.
The key number is equity: what the home is worth, less what’s owed on it. Lenders will only lend against part of that equity, leaving a buffer. Loans range from $20,000 up to $1m depending on the property and the plan.
Because the property provides the security, the initial assessment doesn’t need financial statements or tax returns. That’s why this route suits owners whose accounts are behind, whose last year looked rough on paper, or who simply need to move faster than a bank’s credit process allows.
What can the money be used for?
Anything with a genuine business purpose. The situations we hear most often:
- Paying out IRD debt — GST, PAYE or provisional tax arrears — and stopping penalties building.
- Buying stock, equipment or a vehicle ahead of a busy season.
- Paying the deposit on, or the whole price of, an existing business.
- Fitting out new premises.
- Refinancing expensive short-term business debt into one facility.
- Covering a cash flow gap while a large contract pays out.
It can’t be used for personal spending — a holiday, a family car, renovations to the home itself. The lending is for business purposes only.
Who needs to sign?
Everyone on the title. That trips people up more than anything else. Common situations:
- Joint owners — both of you sign the mortgage, even if only one of you runs the business.
- Family trust — the trustees sign. Your lawyer will check the trust deed allows it.
- Company as borrower — the company borrows, the homeowner provides the mortgage as security, and directors usually give a personal guarantee. Our guide to directors’ guarantees explains what that means.
Anyone giving security for someone else’s debt is normally required to get independent legal advice before signing. That’s there to protect them, and it’s worth doing properly rather than rushing.
Should I use my home or another property?
If you own a rental, a commercial building, a bach or a section, you can use that instead. Many owners prefer to keep the family home out of the business entirely, and a second property with good equity can be just as effective. If the only property with enough equity is the home, that’s fine too — it just deserves a clear-eyed conversation at home first.
What are the risks of borrowing against your house?
It’s worth being straight about this. If the business can’t repay, the lender can ultimately enforce the mortgage. That’s why the most important question on the call isn’t “how much can I get?” but “how does this get repaid?”
Good answers look like:
- “A $140,000 contract pays out in March; this bridges us until then.”
- “The loan clears our IRD arrears and we refinance to the bank once this year’s accounts are done.”
- “The new site adds two chairs; the extra revenue covers repayments with room to spare.”
A loan secured on property is typically short to medium term. The strongest applications arrive with an exit in mind — a sale, a refinance, a receivable, or steady trading surplus.
How much does it cost?
Every loan is priced on the individual situation: the property, where it is, the loan-to-value, the purpose and how long the funds are needed. We don’t publish rate cards because they’d be meaningless for your circumstances. What we do is compare our lending partners and put the sharpest option available for your situation in front of you, with the full cost explained — including lender and legal costs — before you commit.
How fast can it happen?
Once approved, funds can in some cases be available within 24 hours. The time is mostly spent before that: confirming value, reviewing the title and getting documents signed. Our answer on how fast property-secured business funding can happen breaks it down step by step.
Next step
Have the address, the rough value and the current mortgage balance handy, and give the Hotline a ring. A specialist will tell you on the first call whether the numbers stack up — or request a call back and we’ll ring you.