Around $5 billion of New Zealand bank lending to small business is secured against somebody's house.
That is the Reserve Bank's own figure, roughly 11% of bank lending to SMEs once you strip out agriculture and commercial property.
Read it again with a founder in mind. For a large slice of New Zealand small businesses, the security behind the overdraft, the equipment, the working capital, or the ability to survive a bad trading year, is the family home.
That changes what a business plan is for.
If you are borrowing against your own house, the plan is not a document for the bank. It is the thing standing between an optimistic forecast and your family's address.
Here is what a lender is actually testing, in order:
Can this business service the debt out of trading, rather than out of hope.
What happens to those numbers if revenue lands 20% under forecast.
Whether the owner understands their own figures well enough to be questioned on them without reaching for the spreadsheet.
Whether the security covers the exposure if all of the above goes wrong.
Notice that only the last one is about your house. The first three are about whether the plan is real.
"Lender-ready" is not a formatting standard, and it is not a template you download. It means a set of numbers you can defend under questioning, with the assumptions visible, and a downside case you have already worked through rather than one the banker has to raise for you.
If you cannot explain, without notes, what has to be true for this business to service the loan, the plan is not finished.
And the consequence of an unfinished plan is not a declined application.
It is an approved one.
Sources and notes
Source: Reserve Bank of New Zealand, Financial Stability Report, May 2026. Residential mortgage-secured business lending is around $5 billion, or roughly 11% of total bank lending to SMEs excluding agriculture and commercial property. The RBNZ also notes that mortgage lending conditions, including LVR requirements, feed through into SME lending conditions, because for many small business owners the home is the security behind an overdraft, equipment finance or working capital.
One caveat: 11% is the share the RBNZ can see as explicitly mortgage-secured. It does not capture owners who have refinanced their house separately and put the proceeds into the business, which is common and invisible in that number. The real exposure of household balance sheets to small business risk is very likely higher than the published figure, not lower.
Nothing here is lending or financial advice. If you are securing business borrowing against your home, talk to your bank and your own adviser about your specific position.