Is there reason to be concerned about your business's risk grading?

Date

29 May 2019

image-6031f40567af28e1d47dad3adc24222e9f00f76f-1280x540-jpg

Historically, risk grading has impacted the willingness of banks to lend. Therefore, your business’s risk grading is likely to be more important going forward.

There is a fair bit of media writing on the subject. Such as this piece, (behind a paywall) https://www.interest.co.nz/banking/99537/westpac-nz-ceo-david-mclean-says-nz-banks-should-hold-higher-regulatory-capital, which talks about the issues banks are likely to face with the RBNZ requiring them to hold more capital.

The upshot, should these increased capital reserves be required, is that banks may need to:

Put up interest rates. This is likely to happen across the board but will particularly affect those clients whose risk models show they are ‘riskier’, as banks will have to hold more capital for those clients
Ration capital. Basically, this means banks will only lend to those where they can see they will get their required rate of return. It will be less about getting dollars out the door and more about making sure return hurdles are met.

If you want to read more about risk grading, we suggest you start with these articles:

Navigating property finance with lower CVs? How to best position your lending

With capital values softening across parts of New Zealand, many borrowers are finding that lower CVs can impact how much they can borrow — especially when property is being used as security. While CVs don’t directly set lending limits, they influence how lenders assess risk and scale your available equity. At Finance New Zealand, we help clients navigate these challenges by working with multiple lenders, using alternative forms of security, and structuring finance that supports long-term growth — even in a tighter lending environment.

image-5b6b94ba3668e31a024bc58b1972d86df96e2575-1500x1000-jpg

13 July 2025

New vehicle or asset purchase on the horizon? See the tax incentive in action: Ford Ranger example

The New Zealand Government’s Investment Boost scheme, introduced in the May 2025 Budget, is already influencing business decisions across the country. At Finance New Zealand, we’re seeing many of our clients take advantage of this timely incentive to invest in new vehicles and equipment while reducing their upfront tax impact.

image-33e7df8852b2ea8864d5e7b82664b0946263eac1-1019x759-png

image-5090229b55f2fa965e21220456eb22ad6741ad65-306x282-png

Page Links

Contact us

Finance New Zealand Limited L11 BDO Tower, 19-21 Como Street, Takapuna, Auckland 0622 PO Box 65164, Mairangi Bay 0754 T: (09) 222 0320 E: info@financenz.co.nz