How to get a personal loan while self-employed

If you’re self-employed or a small business owner in New Zealand, getting a personal loan can be challenging. Banks need lots of proof of income for their loan processes, so if your pay changes, a bank loan can be hard to get. Fortunately, there are other options for finance. Here’s what you need to know:

Read More: Should you get a personal loan through a broker?


If you’re self-employed, you get loans for the same reasons that salaried/waged people do: to buy a house, to get a new car, to go on holiday, or for an unexpected expense.

But as a business owner, you might also need a business loan for:

  • Hiring more staff
  • Getting extra or new stock
  • Buying a new work truck, software, laptop, uniforms or other equipment
  • Paying rent on commercial premises
  • Refinancing other business debt

A loan gets you access to the equipment, personnel or premises that you need to run and grow your business. It may also let you cover unexpected or temporary cash flow issues.



The benefits of a loan are clear, but so are the challenges. Many great business ideas never get off the ground because of a lack of finance.

Some of the most common challenges are:

  • Variable income. Lenders want to know you can make your repayments easily. If your income isn’t consistent, that’s harder to do.
  • Higher interest rates. If you are offered a loan, you might have to pay a higher interest rate. This is again because of a lack of regular income. Lenders offset their risk by charging more.
  • More documentation. Some lenders usually expect at least 2 years of financial records / tax returns if you are self-employed. If you are new to self-employment, you might not have these records.

Ironically, this can result in the self-employed owner of the business being less ‘bankable’ than their employees!



There are several options if you are having trouble getting finance while self-employed.

  • Go to a non-bank lender.

Alternative or non-bank lenders can usually offer self-employed people loans more easily than banks. These companies have a higher appetite for risk and are more willing to take on self-employed people.

In the case of business loans, non-bank lenders look at the purpose of the loan, not just the finances of the borrower. They will try to understand the business case for the loan and use that to make an informed decision on whether to loan or not.

  • Get a loan without financials.

These are loans that don’t require the borrower to supply multiple years’ worth of financial records. An assessment of your business bank accounts for the last three to six months is normally all that’s needed as evidence of your income and expenses. These loans also often come with slightly higher interest rates, so be prepared to spend more.

  • Apply with a guarantor or higher value security or deposit.

Lastly, self-employed people could apply with a guarantor or with higher value security/deposit, or split the loan over two people (such as a couple). This reduces the risk for the lender and makes a loan more likely to be accepted.



If you’re self-employed and need a loan, it can be difficult. Going to a non-bank lender either directly or through a broker can be a simple solution, as can applying for a low documentation loan or applying with a guarantor or higher value security/deposit. Don’t let a lack of finance from the bank get in the way of your big idea!



This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact Avanti Finance or your financial adviser. Neither Avanti Finance nor any person involved in this article accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any information, representation or omission, whether negligent or otherwise, contained in this publication. References to third-party websites are provided for your convenience only. Avanti Finance accepts no responsibility for the availability or content of such websites.

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