We can help you find secured lending across a wide range of collateral.
Secured loans have identifiable items securing them, for example, property, vehicles or equipment that has a serial number. Take out a secured loan to purchase items or use currently owned items to secure a loan for a better interest rate than an unsecured loan.
Plant and Equipment Finance
We can provide loans against existing assets, or for the purchase of new plant and equipment for your business. Any equipment that is uniquely identifiable will be considered. Amount loaned and rates will vary. The item being used as security may belong to the business or be personally owned by one of the directors and/or shareholders.
When using a vehicle or equipment as security, your lender will want to make sure that there is no borrowing against the item already, and they will require the insurance against that item to reflect the lender as an interested party. In general the value of the item being used as security will be the same or more than the amount borrowed against it.
BORROWING AGAINST PROPERTY
If you want to use your property to secure a loan, the total borrowing against the property (ie your home loan and your business loan) usually won’t go over 80% of the value of your property. If you don’t have a recent valuation, the lender will go off the current CV of the property. It’s no problem if the property is owned by a trust.
USING OTHERS’ PROPERTY OR EQUIPMENT AS SECURITY
If a secured loan is your only option but you don’t own any property or assets, and a friend or family member agrees to allow you to use their property or assets as security, then the registered owner of the secured item will become a party to your loan.
FAQ’S
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A caveat is an interest in property lodged at LINZ to protect an unregistered interest in the property.
When a lender refers to a caveat they refer to an ‘agreement to mortgage’ entered into by a guarantor. This in itself is not a piece of security but the right for the lender to oblige the guarantor to enter into an agreement (ie the mortgage).
When the caveat is registered with LINZ it will prevent the property being sold or a mortgage being taken over the property without the lender’s consent.
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Property and vehicles are the best form of security. This is because they have verifiable valuations and can be registered on the PPSR. Vehicles can be funded to up to 100% of their value and property can generally be funded to 80%. If there is a first mortgage on your property this can still be topped up to 80% but there may be a limit on the amount that can be borrowed.
Plant and equipment can be used as security but the percentage funded will depend on the resale market of the items.
Things like office furniture, hotel chattels and other smaller items can form part of security - with the right lender. That’s why it’s important to work with us for your business funding, as we know what kinds of security each lender does or doesn’t like.
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What documents are needed to support your application will depend on what type of loan you are applying for. As well as the completed application, be prepared to provide the following with your application:
management accounts - this is your profit and loss statement and balance sheet as of today; this will require your book keeping to be up to date
financials to the end of the previous tax year may be required
serial numbers, licence plates, or other unique identifiers for assets that a loan is going to be secured by
for loans being secured by property, six months of mortgage statements and a rates notice showing rates payments are up to date. If the property is owned by a trust, you will need to provide a copy of the trust deed
a copy of your photo ID, and that of any other director and shareholder with 25% or more shareholding.
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We must be able to take a specific security agreement (SSA) over the security being provided. If land is being provided a mortgage or a caveat is required.
If the owner of the asset is not the business they will need to provide a guarantee and they will need to be a party to the loan.Item description