New data shows that New Zealand’s small businesses are increasingly turning to lending to manage cashflow and fund expansion, with Auckland, Canterbury, and Waikato leading the demand for finance.
Figures released today by Prospa New Zealand reveal that Auckland topped the regions with 3,077 funding applications, followed by Canterbury with 787 and Waikato with 680. The industries most actively seeking finance were Building and Trade, Professional Services, Hospitality, and Retail.
“Small businesses account for 97 percent of all businesses in the country. Kiwi entrepreneurs are everywhere, and they might already be clients without you even knowing it,” says Adrienne Begbie, Managing Director of Prospa New Zealand.
“By getting to know your existing clients, and their individual circumstances, savvy advisers can diversify into SME lending.”
Across nearly every sector, working capital is the most common reason for borrowing according to Prospa NZ internal data acquired between 1 April 2024 and 31 March 2025. This accounts for 42 percent of funding requests nationwide.
According to Begbie, “While working capital is the number one reason SMEs are seeking funding, it’s encouraging to see that over 10 percent of entrepreneurs are directing funds toward growth and expansion, indicating confidence despite the current economic challenges.”
Sector-specific data shows notable variations. In Building and Trade, half of funding requests were for working capital, while Professional Services businesses sought finance primarily for working capital (53 percent) and expansion (11 percent). In Hospitality, 33 percent of borrowing was for working capital, with 13 percent directed toward expansion and 9 percent toward remodelling. Meanwhile, in Retail, the top use of funds was for purchasing inventory (31 percent), followed by working capital (22 percent).
The data also highlights a gap in SME financial knowledge, with 35 percent of small businesses unaware of alternative lending options beyond the traditional banks.
“There’s a real opportunity here. Advisers who proactively engage with their small business clients and understand their funding needs can deliver more comprehensive financial advice, building stronger relationships in the process. If you’re not asking the question, someone else will.”
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