How to Get The Best Commercial Mortgage Deals in NZ

Given that a loan for an industrial or business premises is usually of considerable size, it is absolutely understandable why borrowers want to get the best commercial mortgage deals in NZ they can. Even half a point can make a huge difference which becomes even more important on higher loans. Unfortunately, looking for competitive rates means that you will have to offer your broker or lender means that you will need to provide an extensive amount of information to present your case which will give them a higher degree of confidence in you. It is only after they have gone through this lengthy process that they may consider offering you a better deal on your commercial mortgage interest rate.

NZ commercial mortgage company

NZ commercial mortgage company – image khunaspix

While this answer may not be the direct or simple solution you were hipping for, none the less, the more information and supporting data you can provide to any potential lender, the stronger your case will be. In short, a lender wants to have a good feeling that they will be able to get their money back. To get this confidence they want to see that borrowers have thoroughly done their home work on the project they want funding for. They also want to see that the business is growing, meeting forecasts and that there are no major surprises in the business results. Surprisingly, a sudden unforeseen jump in profits can cause a sense of unease with some lenders. This is because they wonder why the business did not foresee this happening. And if they did not see a wave of profits coming, what else are they missing?

However, it is important to keep in mind that these banks and lenders will ask you for quite a few documents before deciding to offer you their best rates. After all, it is important to know everything about the company and people that obtain that loan.

It is a general rule that the absolute best rates are available for those business owners that have no negative issues in their credit history. If there are any discrepancies, then having documents to explain these will help your case.

If you are borrowing to finance an expansion of your business then you need to be able to show why you think you can grow, where the growth will come from and the risks the company faces. It is better to be realistic and talk about risks than to hide them from potential lenders. This shows you understand your market and the inherent challenges of being in business.

If you want to buy the building that you use to carry out your business to save expenditure on rent, then you need to be able to show that your business can support the mortgage repayments. These may well be higher than the current rent. This article talks about the comparison between renting and buying your business premises. You also need to have access to the down payment which can sometimes be as high as 35% of the buildings valuation i.e. you can only get a mortgage for 65%.

Commercial mortgages in NZ

Commercial mortgages in NZ

Property investors are also frequent borrowers for commercial mortgages in Auckland. They need to show that the rental cash flows are sufficient to cover the mortgage repayments. This may be interest only as this is a common type of mortgage for commercial borrowing purposes.

What do commercial mortgage lenders look for?

Here are a few tips that will show you what lenders are interested in:

  1. Profitable business: meaning that the company made a profit in the past 3 years.
  2. Verifiable financial information: annual accounts prepared by professional accountants, and if possible, all filled at the Companies House.
  3. Good credit history: meaning that all loans are paid and there are no late payments to any of the company’s suppliers.
  4. Background and CVs of the directors or business owners.
  5. In case of an investment property, lenders are looking to see a well established formal lease and a responsible tenant. The income must absolutely cover the mortgage payments.

NZ commercial mortgage deals video

The above are examples of some of the criteria and documentation that you will need to provide in order to be considered for the absolute lowest mortgage rates. Remember that, if you are looking for the lowest rates, you should be prepared to offer your lender all the above documents before expecting to receive an answer.

Commercial mortgage deals - image xedos4

Commercial mortgage deals – image xedos4

Without a doubt, some businesses are able to arrange some excellent commercial mortgages and as a result to enjoy somewhat lower rates of interest and hence much lower overall interest payments over the life of the mortgage loan. However to achieve this , they have to run thorough market research into the potential lenders. The problem with this approach is that it takes a lot of time and you are already busy running your business. So what is the answer? How can you get the best commercial mortgage deals in NZ?

The easiest way to get the best the best mortgage deals in Auckland

The solution is to go to a broking firm, someone like Global Pacific Finance. They have contacts with many different lenders, some banks, some private and others that are secondary market lenders. They will be able to negotiate on your behalf to find the best commercial mortgages deals in NZ that suit your particular circumstances.



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Mezzanine Finance Offers NZ Borrowers Lots of Flexibility


Mezzanine finance is a loan that uses the equity interests of the borrower to give security to the pledged amount. The borrower has to be an owner of the pledged equity and this form of financing is very common in real estate to help developers to complete projects or other deals. It is also use in operating businesses.


Mezzanine financing is considered similar to a second mortgage which is normally secured by a fraction of the ownership in any property. A mezzanine finance loan is secured by the stock of the borrowing company and leads to fewer legal problems of it being acquired or taken over. They are entered into only when the borrower has ownership of the property, and if it is an income producing property, this income can be used to pay off the loan. This makes mezzanine finance a very popular method by which landlords, owners of office buildings or other commercial property, obtain additional finance.


Mezzanine finance, if properly structured, can help a borrower to acquire all the needed funding for buying out an acquisition. It must be properly structured and all financial presentations must be made to the lenders to convince them of the viability of the project. Lenders who offer such finance pay more attention to the credit worthiness of a company and its ability to maintain a stable cash flow. They are more concerned with getting back the principal loaned out and get their returns through any interest rates charged, and any returns on the dividends of the equity pledged with them. The loan does not have to be protected by any assets, and lenders are partial to companies that produce stable cash flows that do not go through any cyclical variations.


Providers of mezzanine finance in NZ depend on the management of the borrowing companies to produce the necessary cash flows that can ensure repayment of the loan amount and interest. They will therefore not have any interest in taking on a management role, even though they do have a lien on the equity and will wait patiently for the loan period to lapse before taking any other action. These loans are normally provided for periods of 1 to 7 years. Personal guarantees are rarely asked for. However, interest rates are higher than a bank loan but this is the price to cover any risks to the lender. Loan amounts are limited to a multiple of the earning before tax, and the lower the multiple the greater are the chances of getting such loans on advantageous terms.


Businesses use this method of financing to launch new products, expansion of markets or even to acquire new businesses or properties. A common usage is for mezzanine finance for property development. Payments of loan amounts obtained against mezzanine finance are not required to be paid till the loan period matures, and this does allow a business to reinvest any cash flow generated and not use it to return part of the capital. Mezzanine lenders do not interfere in the running of a business, even in difficult times, and as such owners of a business never lose its control. The amount available through mezzanine finance are also substantially higher than other loans based on cash flow, and this does give a business owner a far bigger scope for facilitating expansion and growth.

Description of mezzanine financing

Mezzanine financing is more expensive than first mortgage financing and returns are generated from participating in the equity of a project. Interest payments on this financing have to take a preference over any distributions made against equity. It is possible to push all payments to dates nearing maturity, in which case a greater amount of equity may have to be given up. In such cases interest payments do get compounded and add substantially to the amounts due.


Mezzanine finance AucklandMezzanine financing allows companies that have a strong historical performance to use the leverage of this efficiency to get large amounts of money to further help growth and profitability. It can be one in which regular interest is paid periodically, added on to the loan amount to be made out as a balloon payment at the end of the loan period, or where the lender is given an option to convert the amount into equity. This gives the borrowing entity far more flexibility than a bank loan or by selling an equity stake at the beginning of the arrangement. Returns for these lenders are between 18 and 21% and they do offer loans that can go as high as 90 percent of the actual requirement for a project.


Obviously with numbers like these both sides are going to benefit. The borrower has more flexibility and the lender makes a healthy return.


Among the top mezzanine finance companies in NZ is Global Pacific Finance. They are located in Auckland but do provide funding services across New Zealand. They have provide funding for business expansion, property development and financing the purchase of capital equipment among many others. If you need flexible commercial finance in NZ, take a look at mezzanine finance today.


Click here for details of the Global Pacific finance options.

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The Benefits of Getting Asset and Equipment Finance for NZ Businesses

Businesses start small but they will need additional resources if they are to grow. A start-up will often be financed by spare cash from the business owner but growing after the initial starting phase can be a challenge. Cash is usually tight in most businesses so the idea of buying new plant or machinery from the cash reserves is often not an option. The best answer is to look at a funding concept called asset or equipment finance in NZ.

Asset backed finance is a very common method of financing your business growth. It offers access to financial aid without placing any major restrictions on the business or the owner of that firm. Instead the finance company will take a charge over the asset itself. The main benefit of this is that if the company does not meet its repayments, rather than the business or the owner’s home being at threat, the financier will simply take back the asset.

Of course this will have some knock-on effects to the business but it is by n means as catastrophic as forcing the business into liquidation or losing your home.

Requirements for equipment finance

Just as with any other financial mechanism, the business owner will have to prepare and submit various reports and forms. These will vary from one lender to another but in most cases you will find that they will want to see the following documents:

  • Personal financial statements
  • Tax returns
  • Management profile
  • Detailed business plan
  • Plan of the intend use of the funding

The missing piece is finance in 3d puzzlesIt is important to remember that it does not matter how serious or convinced you area about the potential of your project, the lender is the one that needs to be sure. They will have many requests for their limited pool of money that they can lend. So the business plan with the best case will be the one that gets the approval to go ahead.

Therefore, you must complete and provide the information that the funding institution asks for in the manner that they want to see it. If you deviate from their request you are making your chances of asset financing a bit more difficult. The rule is simple; play their game according to their rules.

Typical uses of equipment finance in NZ

Businesses have all sorts of different needs for financing. The projects will depend upon the size of the company, its stage of development, the competition and the level of activity in that market.

Some common requests for asset finance include:-

  • Production equipment
  • Trucks and vehicles
  • Plant
  • Business equipment like new computers
  • Farming equipment
  • Construction machinery
  • Packaging machines
  • And many more

Points to note about equipment finance

Asset finance has many advantages over other forms of financing. We mentioned above that the lender does not take any security over the company or the business owner’s house. Instead the asset itself is the security that they lender will take.

There may be some tax advantages by taking a form of asset finance compared to other loans. Be sure to talk to your accountants to have them look at the tax implications. They can advise you on how this will impact your bottom line and your balance sheet. Talk to them before you progress too far down the track of getting business finance.

Often the borrower can set some relatively favourable terms for repayment. This can be in terms of the repayment period or the monthly repayment costs. However, do bear in mind that the longer the loan period or the lower the repayments, the more you will pay in the end.

Asset finance loans can be processed and approved in a reasonably quick time frame, mostly within 24hours.

The prospects of getting some asset financing may not be affected by previous bad credit. This is because the lender is taking the asset as security and as long as you make the payments, they are happy. However, the equipment finance company may apply higher interest rates.

Equipment financing NZFinding equipment finance in NZ

There are numerous companies which provide different forms of asset finance in NI. Some are attached to the big mains while others like Marac offer their own products. To give you more flexibility and a better range of options for asset equipment finance in NZ, look instead at independent commercial finance companies like Global Pacific. They work with various funding sources and provide finance in a lot of diverse industries. They are a good first option.

Their website is www.globalpacific.co.nz/.

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