Asset finance is one of the most popular forms of business finance in New Zealand — it lets businesses acquire equipment, vehicles, machinery and technology without a large upfront outlay. Instead of buying outright, you spread the cost over the useful life of the asset, preserving cash flow for operations and growth. This guide covers how asset finance works, the main structures, what can be financed, indicative rates, and the tax treatment. It’s general information, not financial or tax advice.
What asset finance is
Asset finance is a broad term for several funding structures that let a business use an asset while paying for it over time. In New Zealand it’s available from banks, specialist finance companies, and manufacturer finance arms — the main structures being finance leases, operating leases, hire purchase and chattel mortgages. For the wider business-lending picture, see our business finance guide, and if the pressure is day-to-day cash flow rather than a specific asset, our working capital guide covers that.
The main structures
Reference sources
- Inland Revenue — depreciation and business expenses: ird.govt.nz
- business.govt.nz — finance and funding for business: business.govt.nz
- Financial Service Providers Register — check a lender is registered: fsp-register.companiesoffice.govt.nz
- Personal Property Securities Register — check for security interests on an asset: ppsr.govt.nz
What can be financed
Tax treatment by structure
One of asset finance’s main advantages is how the cost can be treated for tax — which varies by structure.
Because a lot of asset finance is for vehicles, our car finance guide is a useful companion if that’s your main need.
The tax treatment
How KiwiSaver contributions work
Several figures changed under Budget 2025 — these apply from 2026. Always confirm current rates with IRD.
Your contribution
A percentage of your before-tax pay. The default rate is now 3.5% (from 1 April 2026), and you can choose 3.5%, 4%, 6%, 8% or 10% (3% is now only available as a temporary rate reduction). It rises to a 4% default from 1 April 2028.
Your employer
Must contribute at least 3.5% of your before-tax pay (from 1 April 2026, rising to 4% in 2028) — taxed via ESCT before it reaches your account. Employers now also contribute for 16- and 17-year-old employees.
The government contribution
25 cents for every $1 you contribute, up to $260.72 a year (halved from $521.43 on 1 July 2025). To get the full amount you need to contribute at least $1,042.86 in the KiwiSaver year (1 July–30 June). You’re not eligible if you earn over $180,000, and only your own contributions count — not your employer’s.
If you’re self-employed
Contributions are voluntary — you choose how much and when. It’s still worth putting in at least $1,042.86 a year to claim the full $260.72 government contribution.
The higher 3.5% employer rate roughly offsets the halved government contribution for many earners — but the key is contributing enough to capture both your employer match and the full government top-up.
Our tax rates guide covers business tax more broadly.
Choosing a structure and a lender
Two decisions matter most. First, the structure — do you want to own the asset (hire purchase or chattel mortgage), keep your options open at the end of the term (finance lease), or simply rent something you’ll replace regularly (operating lease)? That choice also drives whether the asset sits on your balance sheet and how it’s taxed, so it’s worth discussing with your accountant. Second, the lender — New Zealand has bank asset-finance arms, specialist financiers (such as UDC and Heartland), and manufacturer finance from vehicle brands, each with different rates, terms and appetite for particular assets. As with any borrowing, compare the total cost across a couple of options — the interest rate, fees, term and any balloon or residual payment — rather than just the headline rate, and make sure the repayments fit the income the asset will generate.
The bottom line
Asset finance lets a business get the equipment or vehicles it needs while spreading the cost and keeping cash free for everything else — and, structured well, it can offer useful tax advantages too. The key is matching the structure to your goal (own it, or use it), choosing the right lender for the asset, and confirming the tax treatment with your accountant before you sign. Done thoughtfully, it’s one of the most practical tools for growing a business without draining its cash reserves.
Disclaimer: This article is general information about asset finance in New Zealand, not financial or tax advice, and not a recommendation of any lender, product or structure. Rates, fees, terms and tax treatment vary by lender, asset and structure and change over time — the figures here are indicative only, and any named financiers are examples of the market, not endorsements. Always confirm current rates directly with lenders, and consult your accountant or a tax adviser about the best structure and the tax and depreciation treatment for your specific situation.
Fund types and fees
Funds are grouped by how much they hold in growth assets (shares, property) vs defensive assets (bonds, cash). More growth = higher risk but stronger long-term potential.
| Fund type | Risk | Roughly suits |
|---|---|---|
| Defensive | Low | Retiring within ~5 years, or very risk-averse |
| Conservative | Low–medium | Wanting stability, 10+ years out |
| Balanced | Medium | Most members, 10–20 years to retirement |
| Growth | Higher | 20+ years from retirement |
| Aggressive | Highest | Young, very long time horizon |
Frequently asked questions
What is asset finance?
Asset finance lets a business acquire equipment, vehicles, machinery or technology and pay for it over time rather than buying it outright — preserving cash flow. It covers several structures (hire purchase, finance lease, operating lease, chattel mortgage), each differing in who owns the asset, whether it’s on your balance sheet, and how it’s taxed.
What’s the difference between hire purchase and a lease?
With hire purchase you’re working toward owning the asset — ownership transfers at the end of the term (often after a final balloon payment). With a lease, the financier owns the asset: a finance lease lets you extend, return or refinance at the end, while an operating lease is essentially a rental where you never own it. Which suits you depends on whether you want ownership.
What is a chattel mortgage?
It’s a loan secured against the asset you’re buying. You own the asset from day one, but the lender registers a security interest over it (on the Personal Property Securities Register) until the loan is repaid. It’s commonly used for vehicle finance and has similar tax treatment to hire purchase.
What are asset finance rates in NZ?
Typically around 7% to 16% p.a., depending on the asset and its resale value, the loan-to-value ratio, your business’s credit and trading history, and the term (usually 2–7 years). Banks generally offer lower rates than specialist finance companies. These are indicative — confirm current rates and fees, and compare the total cost.
Is asset finance tax-deductible?
Generally, yes, though it depends on the structure: with hire purchase and chattel mortgages you can claim the interest and depreciate the asset; a finance lease allows interest and depreciation; and an operating lease’s payments are usually fully deductible as an operating expense. IRD sets depreciation rates by asset type, so confirm the treatment with your accountant.
What can I finance with asset finance?
A wide range of business assets — vehicles (cars, trucks, vans, trailers), plant and machinery, construction and agricultural equipment, IT and technology, and medical, hospitality and marine equipment. Generally, if it’s a tangible business asset with a resale value, it can usually be financed.
