Can you get a business loan when you've still got a student loan?

Yes, you can get a business loan with a student loan in New Zealand. For most lenders it barely registers. It’s interest-free while you live here, there’s no fixed monthly repayment, and what you pay depends on what you earn. The bit that actually trips founders up is IRD: once you leave your job, your repayments stop coming off your pay and turn up as a tax-time bill.

So the student loan isn’t the problem. Not planning for it is. Let’s break it down.

Why lenders mostly shrug at a student loan

Think about how a lender sees your commitments. A car loan or a credit card has a fixed repayment due every month whether you’re having a good month or a shocker. That’s what eats into what you can afford to borrow.

A New Zealand student loan works differently:

• No interest while you’re NZ-based. StudyLink confirms the loan is interest-free as long as you live in New Zealand (StudyLink: what happens to your loan).
• Repayments follow income. You pay 12% of what you earn over a threshold. Earn less, pay less. Earn under the threshold, pay nothing that year.
• No collector ringing you. IRD runs it through the tax system.

For unsecured business funding, which usually kicks in after about six months of trading, the lender is mostly reading your business bank statements: deposits, how steady they are, and whether the account looks well run. Our guide to what lenders read in your bank statements covers that in detail.

For property-secured loans of $20,000 to $1m, the property does a lot of the heavy lifting, and that path can work even from day one. Either way, a student loan balance on its own is rarely the reason someone gets declined.

The catch: going self-employed changes how you repay

When you’re on wages, your employer uses the SL tax code and student loan repayments come out of every pay automatically. You never really think about it.

Go full time on your own thing and that autopilot switches off. Here’s how Inland Revenue handles it (IRD: student loan repayments when you’re self-employed or earn other income):

• You owe 12% of every dollar of income over the annual repayment threshold. For the 2026 tax year that threshold was $24,128.
• Your business profit counts as adjusted net income: income that isn’t salary or wages, minus expenses. Losses aren’t included.
• If you’ve got this kind of income, you file an income tax return, and your student loan repayment is calculated off the back of it.
• The end-of-year repayment is due in February after the tax year ends.

In plain English: in your first full year in business, nothing comes out week by week. Then it all lands at once, often right when your income tax bill arrives too.

The interim repayment surprise in year two

Once your end-of-year repayment is $1,000 or more, IRD expects interim repayments the following year (IRD: interim student loan repayments).

• The total is normally last year’s end-of-year repayment plus 5%.
• It’s split across three dates. For most people that’s 28 August, 15 January and 7 May.
• If you haven’t filed last year’s return, IRD uses the figure from two years ago plus 10%.
• If your income is dropping, you can estimate a lower amount in myIR, up to your final interim due date.

If that sounds a lot like provisional tax, it is. Same rhythm, same “paying for this year while still finishing last year” squeeze. If you haven’t wrapped your head around that yet, read our first-year provisional tax guide next. Founders who get caught by one usually get caught by both.

A worked example: Aroha’s first two years

Illustrative example only. Not a real business.

Aroha runs a Shopify store selling plant-dyed kids’ clothing out of Ōtautahi. She quit her design job on 1 April to go full time, still carrying about $28,000 of student loan.

Year one. Her store makes a net profit of $60,000. With no payslip, nothing goes to her student loan during the year. When she files, the maths looks like this:

That bill is due in February, sitting right next to her income tax.

Year two. Because her repayment was over $1,000, interim repayments kick in: $4,304.64 plus 5% is about $4,520, split into three instalments of roughly $1,507. So for a stretch, she’s clearing last year’s lump sum while also pre-paying this year’s.

Same moment, different problem. Aroha’s spring range is selling well and she needs about $18,000 of stock before Black Friday. Her student loan didn’t stop her getting funding. The thing that nearly did was that she’d quietly let a few hundred dollars of overdue student loan repayments sit with IRD, and lenders ask about tax debt. Sorting that first (it was small and easy to clear) made her application a much cleaner read.

Notice what didn’t matter: the $28,000 balance itself.

So what do lenders actually check?

Here’s how a student loan tends to show up when you apply for business funding:

1. Are you up to date with IRD? Overdue student loan repayments are money owed to Inland Revenue. Lenders ask about tax debt, and some will see IRD payments or arrangements in your statements. A small amount on a sensible arrangement is usually workable. A balance you’ve been ignoring is not a great look.
2. Is your income real and regular? That’s the same check every founder gets, student loan or not. See how lenders look at a new business.
3. Are you paying yourself sensibly? If you’re draining every dollar out of the business, a lender will wonder how you’ll cover tax, the student loan and a repayment.
4. Personal commitments on a property-secured loan. If you’re borrowing against a home, some lenders look harder at your personal position. A student loan there is still a soft commitment rather than a fixed monthly one.

Want to see where you’d land? Check if you qualify in about 60 seconds, no credit check to start.

Five moves to stop your student loan wrecking your cash flow

1. Ring-fence it from day one. Every time money comes in, sweep a slice into a separate tax account. A quick rule of thumb is to add 12% of your expected profit over the threshold on top of what you’re already saving for income tax and GST.

2. Choose how you pay yourself on purpose. If you run a company and pay yourself a shareholder salary, IRD treats that as adjusted net income, so no repayments come out during the year. Paying yourself regular PAYE wages through the company means your SL deductions happen automatically. Talk it through with your accountant before you set it up, and if you’re still picking a structure, our sole trader or company guide is a good start.

3. Don’t pay interims you don’t owe. If this year is shaping up quieter than last year, estimate your interim repayments down in myIR rather than overpaying from a tight bank balance.

4. If you’re already behind, deal with it early. IRD is much easier to work with before something’s seriously overdue. Our guide to IRD tax debt options covers instalment arrangements and when funding makes sense.

5. Never borrow to pay off the student loan itself. It’s interest-free while you’re in New Zealand. Swapping it for a business loan almost never adds up. Use funding for things that make you money: stock, kit, ads that already convert, or carrying a big tax bill through a growth spurt with GST and provisional tax funding.

What if you’re going overseas for the business?

Worth a quick flag, because creators and online sellers move around. The interest-free deal is for borrowers who live in New Zealand. If you head offshore for more than six months, the rules change: interest starts, and repayments are based on your loan balance rather than your income. Check StudyLink and IRD before you book a long stint away so a student loan bill doesn’t sneak up and become IRD debt that complicates future funding.

Ready to grow without the student loan stress?

Here’s the honest truth: a huge number of the young founders we talk to still have a student loan. It’s practically standard issue for anyone who studied before backing themselves. We don’t treat it as a red flag. What we care about is the business you’re building, how the money moves through it, and whether the funding you’re after will help it grow.

If you’re eyeing stock, gear, a marketing push or a cushion for your first big tax season, here’s how it works:

• The enquiry takes about 60 seconds, and there’s no credit check when you first enquire.
• We don’t spray your details across a pile of lenders. Your phone won’t start buzzing with calls from companies you’ve never heard of.
• A real person looks at your situation, including where you’re at with IRD, and gives you a call.
• Please fill the form in accurately, with your real turnover and how long you’ve been trading, so we can match you with the right option first time.

Newer than six months? Look at loans for businesses trading under 12 months. Going it alone? See sole trader loans. Or skip the reading:

See if you qualify →