What lenders should prepare before a secured loan

A hypothetical to start. An acquaintance asks a private investor for a loan: nine months, to be secured over a rental property in Onehunga, repaid when a refinance comes through. The investor is inclined to say yes. The question is what to ask for, and what to have in hand, before the first conversation with a lawyer. This lender and this loan are invented for the purpose of the article.

The short answer is that a lawyer can only prepare documents that match a transaction they can see. Before the first conversation, the lender should be able to say who is borrowing, how much and for how long, what secures the loan and what is already on that title, why the funds are needed, and how repayment is expected to happen. Not every point needs to be settled. Enough needs to be known for the matter to be scoped properly, and for the risk points to be visible early rather than at settlement.

The documents do not need to be perfect before contact is made.

Who is borrowing, and who else is involved

The first thing to pin down is the borrowing party. In the hypothetical, "the acquaintance" might be borrowing personally, through a company, or through a trust that owns the rental. The proposed structure needs to be identified so the lawyer can check the borrowing parties, signing authority and documents required. That means being able to name the proposed borrowing parties, any guarantors, and who will sign for them.

Useful details at this stage:

• the full legal name of the borrower;
• whether the borrower is an individual, company, trust, or other structure;
• the amount being advanced;
• the proposed interest rate and default interest rate;
• the proposed repayment date or repayment schedule;
• whether there are guarantors;
• whether the borrower or any guarantor is expected to obtain independent legal advice, and any conditions the lender has set for that advice.

Where a company or trust is the borrower, the lender should also be ready to say who controls it and who will be signing on its behalf. Those are questions the lawyer will check against the company and trust records; the lender's job at this stage is to know the answer the borrower has given.

What secures the loan

For lending secured over property, the security position is where most of the first meeting goes. The lender should bring everything known about the property and the title, and should not assume the position is clean because the borrower says it is.

• the property address;
• the current registered owner;
• the estimated property value, and where that estimate comes from;
• details of any existing mortgage;
• the proposed loan-to-value ratio;
• whether the lender expects a first, second, or later ranking mortgage;
• whether there are any known caveats, disputes, or settlement issues;
• whether the property is residential, commercial, rural, or part of a development.

Two of these deserve a sentence more. Identify the mortgages already on the title and the ranking proposed for the new mortgage. The intended position needs to be checked against the title and any priority arrangements. And a loan-to-value figure is only as good as the two numbers behind it: which borrowing is being compared with which valuation, and whether existing mortgage debt has been counted. A figure that looks comfortable can look different once a prior mortgage is included.

In the hypothetical, the rental in Onehunga already carries a bank mortgage. The investor therefore needs to establish whether that mortgage will remain and what ranking is proposed for the new mortgage, instead of assuming a first ranking position.

Why the funds are needed, and how they come back

A lender should be clear about the purpose of the loan and the expected repayment pathway. This does not remove risk. It shows whether the loan structure fits the transaction, and it affects which lending rules may apply: the borrower's identity, the intended use of the funds and the lending arrangement can each bear on that.

• What is the purpose of the loan?
• Is it bridging finance, working capital, settlement funding, refinancing, or something else?
• How does the borrower intend to repay?
• Is repayment expected from sale, refinance, business income, or another source?
• Is there a fixed settlement or funding deadline?
• Have any funds already been advanced?

The last question is asked for a reason. Tell the lawyer if any funds have already been advanced, when they were paid, and what was agreed or recorded at the time.

Timing is often the hardest constraint. If the loan has to settle quickly, instructions should go in early, with every available document and every deadline that cannot move.

What changes the answer

Some facts change the shape of the matter rather than just the detail.

• Funds already advanced before anything was signed.
• A prior mortgage the borrower mentioned in passing, or did not mention at all.
• A borrower under pressure: in default with another lender, facing creditor action, or pressing to complete without full information.
• Uncertain value or equity, where the only estimate is the borrower's own.
• A caveat, notice, dispute or uncertainty about property ownership on or around the title.
• No clear repayment source, where the refinance or sale that is meant to repay the loan is itself uncertain.
• Independent advice expected for the transaction but not yet arranged.
• Unclear identity or authority, where it is not obvious who is borrowing or who can sign.

Raise these facts at the start so the lawyer can assess what needs further investigation and whether the proposed terms need to change.

Documents to bring to the first conversation

• term sheet or loan summary;
• borrower and guarantor details;
• property title or address;
• valuation or appraisal information;
• existing mortgage details;
• company or trust information, if relevant;
• correspondence about the loan;
• settlement or refinance deadline;
• any prior loan documents, if this is a refinance or variation.

Have the available documents ready. Before sending documents or confidential details, ask the firm what it needs and how they should be supplied for its conflict check and intake process.

Back to the hypothetical investor. Before instructing a lawyer they now know: the proposed borrowing arrangement involves trustees of a trust, rather than the acquaintance borrowing personally; the rental already carries a bank mortgage and the ranking proposed for the new mortgage is still to be confirmed; the refinance that is meant to repay the loan has not been approved; and no one has yet raised independent advice for the trustees. None of that was in the original request.

OneLegal acts for private and commercial lenders on loan documentation, security and enforcement. See Lending & Security, or make a lending enquiry.

General information only
This article provides general information about New Zealand law as at 7 October 2026. It is not legal advice and does not take account of your circumstances. The appropriate approach depends on the facts, documents and applicable law. Obtain legal advice before acting or deciding not to act. Reading this article or contacting OneLegal does not create a lawyer–client relationship.