Bridging funding exists because timing in business rarely lines up neatly. You’ve sold a property but settlement is eight weeks away. A buyer has signed for your business but the money lands after the supplier deadline. Your bank is happy to refinance — in three months. In each case, the money is coming. You just need it sooner.
How business bridging works
A bridging loan is secured on New Zealand property — the one being sold, or another property you or a supporting party own. The lender advances funds now and is repaid when the known event happens.
The assessment focuses on two things:
- Security — the property’s value and what’s already owed against it. Loans run from $20,000 up to $1m, as a first or second mortgage.
- Exit — how and when the loan will be repaid.
No financials or tax returns are needed for the initial assessment, and in some cases funding can happen within 24 hours of approval.
Situations where business owners use bridging
- Property sale settlement delay — funds needed now for the business, sale proceeds arriving later.
- Buying new premises before selling the old — a business-purpose bridge covers the overlap.
- Refinancing in progress — a bank or other lender has the file, but a creditor won’t wait.
- Business sale or partner buy-out — covering obligations until the transaction settles.
- Large contract payment — a milestone payment that’s contracted but not yet due.
- Clearing IRD debt while a longer-term plan is put in place — see IRD tax debt funding.
What makes a strong bridging application
| Strong | Weaker |
|---|---|
| Unconditional sale agreement with a settlement date | “We’ll list it soon” |
| Refinance approval or advanced application in progress | “The bank will probably say yes” |
| Signed contract with a milestone date | Verbal promise of payment |
| Solid equity in the security property | Very thin equity after existing mortgages |
| A realistic buffer on timing | Exit timed to the day |
Bridging and the Reserve Bank’s lending rules
Kiwi homeowners have become familiar with the Reserve Bank’s loan-to-value (LVR) and debt-to-income (DTI) restrictions. Those settings apply to banks’ residential mortgage lending — from 1 December 2025, banks can do up to 25% of new owner-occupier lending above 80% LVR and up to 10% of investor lending above 70% LVR, and DTI limits have applied since 1 July 2024. Business-purpose lending from non-bank lenders sits outside those specific restrictions, although every lender applies its own maximum LVR for security. The LVR guide explains how that plays out.
Plan the exit before you borrow
Treat the exit date as optimistic and build in a buffer. Settlements slip, valuations take longer than expected, and buyers’ finance conditions can drag. If a bridge is repaid early, great. If it needs a few extra weeks, you’ll be glad you allowed for it.
Example scenario
Example scenario — generic and illustrative. A Napier–Hastings engineering firm has sold its old workshop, with settlement set for ten weeks away, and has already signed a lease on a bigger site. The fit-out, a new overhead crane deposit and two months of double rent all fall due before settlement. The directors’ home has solid equity behind a bank mortgage. A business-purpose bridge secured as a second mortgage over the home covers the overlap, and the loan is repaid from the workshop sale proceeds on settlement day. The exit was documented (an unconditional sale agreement), the timeline had a buffer, and the home loan was never touched.
Bridging vs other short-term options
If there’s no property, or the gap is small and repaid from trading rather than a single event, an unsecured short-term loan may be simpler. If the gap recurs, a line of credit is usually a better fit than repeated bridges.
Next step
Estimate your available equity with the property equity estimator, then send a 60-second enquiry. It doesn’t affect your credit score, and a Loanster lending specialist will call to work through the timeline with you.