Trading on both sides? Where to apply for business funding

Mr gets asked this one more than any other: “I’ve got a bit of business in Australia and a bit in New Zealand. Where do I actually apply?” The answer is simpler than it sounds. Follow two things: the borrower and the security. Everything else is detail.

Rule one: follow the borrower

A loan is made to a specific entity: a sole trader, a company, a partnership or a trust. That entity has a home country. It’s registered there, it banks there, it files tax there. Lenders generally prefer to lend to entities in their own country, because they can check the records, understand the tax position and enforce the agreement under laws they know.

So ask yourself: which entity will owe this money?

• An Australian company with an ABN, Australian bank statements and BAS lodgements points to the Australian side.
• A New Zealand company with an NZBN, New Zealand bank statements and GST returns points to the New Zealand side.

If you’re not sure which entity should borrow, that’s a structuring question. Our business structures side by side is a good primer.

Rule two: follow the security

If the loan will be secured on property, the property’s location usually decides the country. Australian land is registered with a state or territory registry; New Zealand land is registered with LINZ. A lender takes a mortgage or lodges a caveat in the system where the land sits, and most lenders stick to their own system.

On either side, property-secured options sit between $20,000 and $5,000,000, secured by a first mortgage, a second mortgage or a caveat over a home or commercial building. See property security side by side for how each works.

What about unsecured lending?

With no property involved, unsecured and cash-flow lending (usually between $5,000 and $500,000) follows the bank statements. Lenders size these facilities on turnover, so apply in the country where the borrowing business’s turnover lands and its accounts are kept.

Know which side you belong on? Skip ahead and start a 60-second enquiry; asking won’t trigger a credit check. Choose your country here.

Common trans-Tasman scenarios

Your situation	Usually start in	Why
Australian business, Australian property	Australia	Borrower and security both Australian
New Zealand business, New Zealand property	New Zealand	Borrower and security both New Zealand
Australian business, property only in New Zealand, wants secured loan	New Zealand	Security is registered under New Zealand law
New Zealand business, property only in Australia, wants secured loan	Australia	Security is registered under Australian law
Australian business, no property, wants unsecured funding	Australia	Bank statements and turnover are Australian
Group with companies in both countries	Where the borrowing company sits	Lenders lend to the local entity
Just moved countries, business now in new country	New country, with old-country documents	Business and future records are local

These are starting points, not hard rules. Situations with mixed property, mixed entities or a recent move are normal, and a real person can sort them out quickly once they see the details.

What if your situation is genuinely split?

Plenty of owners don’t fit a neat row in the table. A Kiwi living in Perth with a rental in Hamilton, running a company that sells into both countries. An Aussie couple who moved to Queenstown and kept their Gold Coast unit. Here’s Mr’s practical approach:

1. Decide what matters most. If you need the biggest amount, the property probably decides it. If you need a flexible facility for trading, the business’s bank account probably decides it.
2. Start on that side. Use the country site for that country.
3. Explain the rest in a sentence or two. “Company trades in Australia; security is our home in Christchurch.”
4. Let the person reading it guide you. If the other side fits better, you’ll be told rather than left guessing.

The single-country sites have deeper reading too: the Australian site on how much a business can borrow, and the New Zealand site on borrowing against your house for business.

Which mistakes should you avoid?

• Don’t apply in both countries “just in case”. Multiple applications can mean multiple credit enquiries, and they make your story harder to follow.
• Don’t apply as the wrong entity. If the company will owe the money, apply as the company.
• Don’t hide the cross-border part. Lenders are used to trans-Tasman owners. What worries them is finding out later.
• Don’t guess at numbers. Turnover, debts and property values should match your documents.

Illustrative example

Illustrative only. A Wellington-based software company has an Australian sales subsidiary in Sydney. The Sydney entity is a year old; the parent is eight years old and owns its Wellington office. They need funding for a hiring push in Sydney. Because the strongest borrower and the security are both in New Zealand, they start on the New Zealand side, with the parent borrowing against the office. Two years later, the Australian subsidiary has its own track record and looks at a local Australian facility.

Pick your side and let’s go

Follow the borrower, follow the security: those two rules settle most trans-Tasman funding questions. Whichever country you start in, the first step works the same way. Your enquiry won’t trigger a credit check, it won’t be shopped around, and a real person reads every one. Say plainly on the form which entity is borrowing, where it trades and where any property is, and you’ll be pointed the right way. Choose Australia or New Zealand.