Increasing use of non-financial credit assessment tools in lender decision making

The traditional model in New Zealand’s asset finance market relied heavily on manual assessment of financial accounts. Banks and finance companies employed credit analysts to review a client’s historic and projected financials. This was a process that was often time consuming and could take several days to complete. These assessments determined the borrower’s creditworthiness, which in turn influenced the lender’s willingness to approve finance, the conditions applied, and the pricing offered to the client.

This traditional method can be cumbersome, particularly for fast growing businesses that need timely funding solutions. At the same time, consumers are increasingly looking for a more streamlined and efficient customer experience

In response, matrix lending has emerged as a streamlined, data driven alternative to traditional assessment methods. Rather than relying on intensive financial reviews, this approach focuses on key non-financial indicators to assess a borrower’s creditworthiness, offering a faster and simpler path to funding.

What Is non-financial matrix lending?

Matrix lending relies on predetermined eligibility criteria based on non-financial data points. While once limited to low-value lending, these models have expanded significantly in the past two years. Today, Finance New Zealand advisers can help eligible clients access up to $500,000 through lenders offering these alternative assessment tools in what we call our ‘Fast Approval Process’

Key factors that influence approval under matrix lending include:

• Time in business: A track record of operating for a certain minimum period (often 2+ years) helps establish credibility.
• Credit scores: Both the business and its directors/shareholders are assessed. Modern credit agencies use broader datasets, focusing on ongoing payment patterns, not just past defaults.
• Asset backing and guarantees: Personal guarantees are often required and home ownership by directors/shareholders and if this isn't available, a deposit may be required.
• Asset type and age: Lenders favour newer assets, but approvals are still possible for specialised equipment like IT, warehouse racking, or office fit-outs sometimes up to approximately $150,000.
• Industry risk: Certain industries, such as forestry or other cyclical sectors, may fall outside matrix criteria.
• Tax compliance: No current tax arrears, and for higher limits, evidence of clean payment history (often verified through bank account screening).

Benefits of matrix lending

This new lending model is brings many benefits to business owners. For businesses with tight timelines, growth ambitions, or limited in-house financial reporting capabilities, this approach offers a competitive edge.

The key benefits of Matrix lending include:

• Faster approval times
• Reduced documentation requirements
• Greater flexibility for asset purchases
• Competitive interest rates for qualifying assets

Lending that falls outside Matrix lending

Clients who fall outside the standard Matrix lending criteria can still qualify for finance through a different approval process. At Finance New Zealand, we work with clients who have more specific or complex lending requirements, providing tailored solutions through traditional credit assessment methods. This may include matching you with a lender that has a strong appetite for your industry or the particular asset type you’re looking to finance.

Considerations

Matrix lending can be an attractive option for many businesses, particularly those new to the market, or those seeking "speed and ease" when obtaining finance approvals. As this model gains traction, we’re seeing more new businesses and equipment dealers enter the market, often taking advantage of the simplicity of a single online transaction, often online without any previous dealing with the borrower. While fast approvals and competitive rates are certainly appealing, it’s essential to understand how new lending may impact your overall financial position. That’s where Finance New Zealand stands apart. We don’t just facilitate one off Matrix lending, we provide ongoing expertise and support that continues well beyond the initial transaction. We’re committed to long term relationships, and when things don’t go to plan, we’ll be here to advocate for you and help your business navigate the road ahead.

Ready to apply?

At Finance New Zealand, our advisers are well positioned to help you navigate the evolving funding landscape, no matter what your lending needs are. Many of our funding partners have strong liquidity and are actively seeking new business, allowing us to assess your eligibility across both Matrix and traditional lending models. We’ll match you with the right lender and structure, and guide you through documentation and asset requirements to make the process as smooth as possible.

Whether you're looking for speed, flexibility, or a tailored funding approach, we’re here to deliver competitive solutions that fit backed by ongoing support that lasts.

Talk to a Finance New Zealand adviser today to find the funding option that fits your business best.