Sole traders make up a huge share of New Zealand businesses — tradies, contractors, hairdressers, consultants, food trucks, photographers, cleaners. And yes, you can get a business loan. You’ll just want to know how lenders see a sole trader, because it’s a little different from a company.
How do lenders see a sole trader?
Legally, a sole trader and their business are the same person. There’s no separate company, no directors, no shareholders. You trade under your own name (or a trading name) and your business income is taxed through your personal IR3 return.
That means a lender assessing a sole trader is looking at you and the business together: your identity, your credit file, your bank accounts, your assets. It also means you’re personally responsible for the debt — there’s no company in between. Lenders fund sole traders, companies, partnerships and trusts, so being a sole trader isn’t a barrier in itself.
What matters is that the loan is for a business purpose. Buying tools, a vehicle for the business, stock, paying IRD, bridging a gap between jobs — all business. A holiday or a new family car — not business, and not something we arrange.
Which loans can a sole trader get?
Property-secured business loans. If you own a home, rental, commercial property or land in New Zealand, its equity can secure a business loan from $20,000 to $1m, as a first or second mortgage. No financials or tax returns are needed for the initial assessment, and bad credit is considered case by case. This is often the best route for larger amounts or when your IR3 doesn’t reflect how the business is really going.
Unsecured business loans and lines of credit. Sized to your turnover and bank statements, usually for businesses trading 6+ months. Decisions are sometimes same day.
Why your tax return might undersell you
Sole traders often have legitimate deductions — vehicle, home office, tools, depreciation — that make taxable income look modest. A bank that leans on your IR3 may conclude you can’t afford much. Cash flow lenders look primarily at money moving through the account, and property-secured lenders focus on equity and your repayment plan, so a lean tax return is less of a problem.
What helps a sole trader’s application?
- A dedicated business account. This is the big one. When all your jobs pay into one account and your groceries come out of another, turnover is obvious. Our guide on keeping business and personal borrowing separate explains why this matters.
- Invoices that match deposits. Being able to show who paid what and when.
- GST returns filed. If you’re registered, up-to-date returns support the turnover story.
- An explanation for lumpy income. Contractors and seasonal operators often have big months and empty months. Say so up front.
- A clear number and purpose. “$32,000 for a second-hand van and signwriting” is easy to understand and assess.
What documents will I need?
- Photo ID (NZ driver licence or passport).
- Three to six months of bank statements for every account business money passes through.
- Your IRD number and, if relevant, GST number.
- A quote or invoice for what you’re buying, if applicable.
- Property details if you’re using property as security.
Our guide on what to have ready when you call a lender has the full checklist.
Is borrowing as a sole trader riskier?
It’s more personal. Because there’s no company, your personal assets stand behind the business debt. That’s true whether the loan is secured on property or unsecured. It’s not a reason to avoid borrowing — it’s a reason to borrow for things that clearly earn their keep, and to have a solid plan to repay.
How much does it cost?
Every loan is priced on the individual situation — security, trading pattern, credit and amount. We’ll compare options across our lending partners and find the sharpest one available for your circumstances, explained in plain language.
Talk to someone
Ring the Hotline — tell a specialist what you do and what you need. It’s a normal conversation, not an interrogation. Or request a call back.