Approved isn't funded: the stages between yes and money

“You’re approved” is one of the best phrases a business owner can hear when money is tight. It is also one of the most misunderstood. In a fast deal, approval isn’t a single moment. It is a ladder, and every rung has its own small list of things that must be true before you can step up. Knowing the rungs helps you plan payroll, supplier payments and settlement dates around what is actually certain.

What does an indicative decision mean?

An indicative decision is the first “yes, this looks workable”. It usually follows the first call and a quick look at bank statements or the property details. It tells you:

• the amount that looks achievable;
• whether it will be secured or unsecured;
• roughly what will be needed to finalise it.

It doesn’t commit the lender to anything. It is a signal that it’s worth your time to gather the rest of the information. Treat it as a green light to move fast, not as money in the bank.

What are conditions, and who sets them?

A conditional approval converts the indicative view into a written list. Typical conditions in New Zealand business lending include:

Condition	Typical for	How to clear it quickly
Final bank statements	Unsecured and secured	Export from internet banking, not screenshots
Identity verification	All loans	Current driver licence or passport, clear photo
Property value confirmation	Secured	Give access details and any recent valuation
Title search and clear priority	Secured	Know what is registered on your title
Guarantees from directors	Company borrowers	Have every director ready to sign
Payout figure from existing lender	Refinances	Request it from your current lender the same day
Lawyer’s certificate	Most secured loans	Book your lawyer before the documents arrive

The lender sets the conditions based on risk. The faster you clear them, the faster you move to the next rung. Our page on property valuation timing covers the one condition that is often outside your control.

What changes at unconditional approval?

Unconditional approval means every condition has been met and the lender is ready to lend. At this point the loan documents are signed (or are ready to be), any lawyers have confirmed what they need to, and a settlement date or time is set.

For unsecured lending, unconditional approval and funding can be minutes apart. For property-secured lending, the next step is settlement through lawyers, which includes registering the lender’s security against the title.

If you’re unsure which rung you’re on, ask. A good specialist will tell you exactly what is outstanding. If you want to understand the whole sequence before you start, the 24-hour process page lays it out hour by hour — or simply send an enquiry and ask on the call.

When is the money actually paid?

Funding, or settlement, is the moment the lender pays out. The money can go:

• into your business account;
• directly to whoever needs paying, such as Inland Revenue, a supplier or a vendor’s lawyer;
• to an existing lender, to repay a debt being refinanced.

Everyday electronic payments between the main New Zealand banks now process every day of the year, according to Payments NZ, which helps when funds are released late in the week. Property settlements and other high-value transactions still run on business days.

Why do some approvals fall over at the last minute?

Most late failures trace back to something that wasn’t disclosed or wasn’t known:

• a valuation well below the owner’s estimate;
• a second mortgage or caveat on the title that nobody mentioned;
• a new dishonour or default between the indicative decision and settlement;
• a director who can’t or won’t sign a guarantee;
• a purpose that changes halfway through.

LINZ notes that a registered caveat prevents other instruments, such as a new mortgage, from being registered until it is removed. An unexpected caveat on your title can therefore stop a secured settlement in its tracks. Check your own title early.

What should I tell the people waiting to be paid?

While you climb the ladder, someone is usually waiting on the other end — a supplier, a landlord, Inland Revenue or a vendor’s lawyer. What you say to them matters.

• At the indicative stage, say you’re arranging funding and expect an answer shortly. Don’t promise a payment date yet.
• At conditional approval, you can share a realistic window, as long as you explain it depends on a few final items.
• At unconditional approval, you can usually commit to a date, because the remaining step is mechanical.

Being honest about where you are protects your credibility. A supplier who hears “Thursday” and gets paid Thursday will give you more room next time than one who heard “tomorrow” three days running.

Illustrative example: a Canterbury engineering firm

Illustrative only. An engineering company in Christchurch gets an indicative yes at 11am for a $300,000 second-mortgage loan against a commercial building. The conditions are a desktop value check, payout confirmation of an old equipment loan, both directors’ guarantees and a lawyer’s certificate. The directors book their lawyer for 4pm the same day and request the payout figure before lunch. The value check returns comfortably above the minimum. Settlement happens the following morning — the second working day after the enquiry — because every condition was chased in parallel rather than one at a time.

Want to know which rung you’d start on?

A short enquiry tells us enough to say how close you are to approval and what’s likely to stand in the way. There’s no credit check when you first enquire, your details stay with one team instead of being shopped around, and a real person calls to talk it through. The more accurate your answers, the more useful that first call will be.

Check what’s possible →