Flexible finance options beyond traditional banks

When would you need a non-bank lender?

For many borrowers, a traditional bank loan is the first option considered. However, bank lending criteria can be rigid, and not every financial situation fits neatly within their standard policies. This is where non-bank lenders can play an important role.

You may need to consider a non-bank lender if your circumstances fall outside typical bank requirements, even if your overall financial position is strong.

Situations where a non-bank lender may be suitable

A non-bank lender may be worth exploring if:

• You are recently self-employed and have a profitable business but lack the two or more years of financial records banks usually require
• Your income structure is non-traditional, such as contract work, commissions, seasonal earnings, or multiple income streams
• You have strong equity in property but do not meet bank servicing criteria
• You want to consolidate existing debts to improve cash flow or overall financial position
• You require bridging finance while selling one property and purchasing another
• You have experienced past credit challenges but have since stabilised your finances
• You are developing property and need more flexible construction or development lending terms
• You require a faster approval timeframe than banks can currently offer

In these scenarios, the issue is often policy rather than risk. Non-bank lenders are designed to assess applications more holistically.

Why choose a non-bank lender?

Non-bank lenders offer several advantages that can make them a practical and strategic option in the right circumstances.

Greater flexibility in lending criteria

Non-bank lenders can consider applications that fall outside standard bank policies, placing more emphasis on the overall picture rather than rigid rules.

Tailored lending solutions

Rather than one-size-fits-all products, non-bank lenders often structure loans around your specific situation, whether that involves short-term finance, complex income, or property development.

Faster approval timeframes

With streamlined processes and fewer layers of approval, non-bank lending decisions can often be made within days rather than weeks.

Property development and construction expertise

Many non-bank lenders specialise in construction and development lending, offering more flexible pre-sale requirements, staged funding, and practical terms for active projects.

A strategic stepping stone

A non-bank loan can be used as a temporary solution, with the intention of refinancing to a mainstream bank after 6 to 24 months once income, credit history, or financial structure has improved.

While interest rates with non-bank lenders are typically higher than those offered by major banks, the gap has narrowed significantly in recent years. For many borrowers, the ability to proceed with a purchase or project outweighs the cost difference.

How a mortgage adviser can help

A mortgage adviser’s role extends well beyond placing loans with mainstream banks. When non-bank lending is involved, professional advice becomes even more valuable.

Access to the full lending market

Mortgage advisers maintain relationships with a wide range of non-bank lenders and understand their individual policies, risk appetite, and areas of specialisation.

Strategic assessment

An adviser can assess whether a non-bank lender is the right solution for your situation, or whether an alternative structure could better support your long-term goals.

Clear pathway forward

If a non-bank loan is the best option, your adviser will help create a plan to refinance to a bank lender once your circumstances allow.

Ongoing support

Support does not stop at settlement. A mortgage adviser continues to work with you as your financial position evolves, helping optimise your lending structure over time.

In today’s lending environment, access to the full spectrum of finance options, including quality non-bank lenders, can be the difference between securing a property opportunity and missing out. If you are facing challenges with traditional bank finance, or simply want to understand all available options for your next purchase or refinance, a conversation about non-bank lending may be a valuable next step. 

For more information and to talk through how we can best help you, please contact us at info@krispedersen.co.nz or call the office at (09)4864719, and we can discuss what you want to achieve from there.

About the author: Kris Pedersen is a leading figure in mortgage advising and property investment, consistently ranked among the country's top six mortgage advisers for the past four years. With over a decade of experience, Kris is the preferred choice for investors seeking expert guidance to expand their portfolios. He shares his insights as a respected speaker at Property Investor Association groups, and his expertise extends to New Zealand and overseas property and finance markets, with regular features in NZ Property Investor Magazine. Kris Pedersen and Kris Pedersen Mortgages Limited are registered financial service providers, ensuring transparency and reliability in all financial dealings. Their credentials on the Financial Service Providers Register can be viewed here: https://fsp-register.companiesoffice.govt.nz/