EFCO's business finance is the only Sharia-certified way to fund a business asset in New Zealand, and the certificate is narrower than the website suggests. The Shariyah Review Bureau certificate on efco.co.nz, dated 24 December 2020, approves one product, a Murabaha asset financing product, against AAOIFI standards. EFCO's pages also advertise cash-flow bridging, staff hiring and start-up packages, which are not asset purchases and are not named in that certificate. The published schedule of fees lists profit margin rates from 9% per annum, a $75 establishment fee and a referral fee of up to $995 if you arrive through a broker. This page reviews the business product alone; the whole-company view is in our EFCO Ethical Finance review, and the market context on our halal business financing hub.
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What EFCO says it finances for businesses
Three product pages on efco.co.nz speak to businesses. The SME Business Finance page lists bridging cash flow gaps, opening a new branch or remodelling existing space, upgrading or purchasing business assets, maintaining inventory and stock levels, and hiring new staff. The Asset Financing page lists construction and manufacturing equipment, medical equipment, agricultural equipment and IT and technology, with 100% financing at low or no deposit, a range of terms, associated costs such as installation and training included, and ownership and use of the asset immediately. The Start-up Packages page lists physical and digital assets, product development and marketing, fit-out of premises and staff hiring, with up to three hours of mentoring after approval and a promise that you keep full ownership of the company.
Vehicles for business use sit on the Vehicle Finance page, which names utes, vans, trailers and specialised vehicles for personal or business use. The Islamic Finance page itself is brief about products: under product coverage it lists Murabaha and then says more products are coming soon. It also lists the activities EFCO will not fund, which are gambling, weapons manufacturing, pornography, pork products, alcohol, tobacco and illegal drugs, and business services involving speculation. A dairy owner, a tradie, a clinic or a software start-up is inside that boundary; a bottle store or a betting kiosk is not.
What the Sharia certificate actually covers
The certificate, signed by Sheikh Muhammad Ahmad and Sheikh Irshad Ahmed Aijaz as EFCO's Sharia Supervisory Board and issued through the Shariyah Review Bureau in Bahrain, states that the board reviewed the Murabaha Assets Financing Product documentation, reference ECO17430101112001, in light of AAOIFI Shariah standards and approved it subject to transactions being executed in strict compliance with the approved structure. It adds that the approval is not a lifetime validation and lapses if the annual Shariah compliance report stops being issued. The most recent Sharia Committee report on the key documents page, dated 16 November 2025, covers the financial year ended 31 March 2024 and concludes that the company's contracts and transactions in that year complied, that the committee met four times, and that income from non-compliant sources was identified and paid or to be paid to charity within twelve months.
That is a genuine certification, and the only one of its kind in New Zealand. It is also specific to asset Murabaha. A Murabaha is a sale: EFCO buys an identifiable asset and sells it to you at cost plus a disclosed profit, payable by instalments, which is explained in our Murabaha explainer. Bridging a cash-flow gap, paying wages or funding marketing is not the purchase of an asset that EFCO can own first and sell to you, and nothing on the site explains what contract those uses sit under. Before signing for anything other than a vehicle, equipment, stock or fit-out, ask EFCO in writing which contract applies and whether it falls within the certified product. The 2024 audit report also covers a year that ended more than two years before this review, so ask whether a report for the year to 31 March 2025 or 2026 exists.
How a business Murabaha is documented and who holds title
EFCO publishes a sample consumer credit contract on its key documents page, carrying the Sharia certificate reference, and it is the best available picture of how the business version is likely to be structured because the Murabaha mechanics are the same. The key financial details section sets out the amount financed, called the Murabaha cost, less any cash deposit; the profit, fixed by applying a profit rate to the amount financed at the time of sale; and the Murabaha price, which is the two added together. The sample states that the profit rate is fixed for the whole term and that the repayable amount does not change, which is the feature that distinguishes a Murabaha from a floating-rate loan.
Title is where readers should slow down. Clause 1 of the general terms says ownership in the property passes to you, but legal title remains with EFCO as security until the balance payable and all other amounts are paid, and that all risk passes to you on delivery. The agreement is a deemed security interest under section 17 of the Personal Property Securities Act 1999 and is registered on the PPSR, which is why the fee schedule carries an $8.05 registration fee. You must keep the asset insured in joint names with EFCO, maintain it, keep it at the address in the contract, and not give security over it to anyone else. For a business the practical effects are that the asset shows on the PPSR against your trading entity, that a bank asked later for an overdraft will see it, and that you cannot sell or trade in the asset before settling EFCO. Business contracts are not published, so ask for the business template before applying.
What EFCO publishes about cost, and the questions to ask
| Published item | Figure on efco.co.nz | What to ask EFCO in writing |
|---|---|---|
| Profit margin rate | From 9% per annum | The exact rate, whether flat or on reducing balance, and the total profit in dollars |
| Establishment fee | $75 | Whether it is deducted from the advance or added to the balance |
| Credit check, PPSR registration and search | $6.90, $8.05 and $1.15 | Whether each director or guarantor is charged separately |
| Administration fee | $2 weekly, $4 fortnightly, $8 monthly | Whether monthly instalments are available for a business |
| Referral fee via intermediary | Up to $995 | Confirmation that a direct application carries none |
| Early settlement | $50 admin fee, plus a settlement fee formula in the sample contract | A written example of the settlement figure at year two |
| Default fees | $1 a week plus notices from $25 to $40 | Confirmation that any excess over cost goes to charity, as the contract states |
The 9% is a floor, not a quote. The sample consumer contract's disclosure section shows an illustrative profit rate of 18.5008% per annum, which tells you the range EFCO works in for smaller or riskier borrowers. EFCO's own FAQ answers the obvious objection honestly: Islamic finance is more expensive in New Zealand because the sector is small, and costs should fall with scale. The calculator on the site, which it labels illustrative, returns estimated weekly repayments of $223.28 for $10,000 over one year, which implies total repayments near $11,611 including the weekly administration fee. Use it to sanity-check a quote, not to replace one.
Early settlement needs particular care in a business context. The FAQ says you can repay early with no penalty. The sample contract says EFCO may charge a settlement fee calculated under regulation 9 or 11 of the Credit Contracts and Consumer Finance Regulations 2004 to compensate for lost profit, plus a $55 administrative cost, and the fee schedule lists a $50 early settlement administration fee. Those statements can be reconciled, because a reasonable estimate of loss is not a penalty in law, but a business planning to refinance or sell the asset in year two should get the settlement formula and a worked figure before signing rather than relying on the FAQ.
GST and depreciation on a Murabaha-purchased asset
The contract makes you responsible for paying all GST on the supply of the property under the agreement. If your business is GST-registered, which IRD requires once taxable turnover reaches $60,000 in any twelve months, that GST is input tax you can claim, limited to the extent the asset is used in your taxable activity. IRD's claiming-GST page allows a full claim under the principal purpose method for goods of $10,000 or less, and requires apportionment above that where there is private use. IRD's special supplies page says that for a hire purchase agreement the time of supply is the date you enter the agreement, so you claim the GST on the whole cash price in that period rather than instalment by instalment, and that the difference between the cash price and the total paid under a finance lease, the finance charge, is exempt from GST. Ask your accountant to confirm that the Murabaha profit is treated the same way, because EFCO's documents do not say.
Depreciation follows ownership for tax. IRD's depreciation page says you can claim depreciation loss on capital assets you own, lease or buy under a hire purchase agreement and use in your business, and the claiming-depreciation page adds three figures that matter here: assets costing under $1,000 can be written off immediately; from 22 May 2025 the Investment Boost lets you deduct 20% of the cost of a new asset in the year of purchase and depreciate the remaining 80% as usual; and a GST-registered business depreciates the GST-exclusive price. A ute, a dental chair or a commercial oven bought through EFCO therefore gets the same tax treatment as one bought with cash, which is one of the few areas where the Murabaha structure carries no cost at all. If you buy a secondhand asset from a seller who is not GST-registered, IRD's special supplies page allows a notional input tax deduction of three twenty-thirds of the price, provided you record the seller's name and address, the date, a description, the quantity and the price.
Security, guarantees and the limits of the CCCFA for business borrowers
Expect to sign personally. The sample contract has a guarantor section and states that the finance recipient and each guarantor remain liable, jointly and severally, for any shortfall after a repossessed asset is sold. Clause 27 grants EFCO a security interest in all present and after-acquired personal property of the recipient and guarantor, and the contract contemplates a mortgage over any land described in it. For a company borrower that usually means a director's personal guarantee and a general security agreement over the company's assets, not just the financed item; ask whether EFCO will limit its security to the asset itself, because the sample suggests the default is wider.
The consumer protections described in what the CCCFA does for Islamic finance customers, including the right to cancel within five to nine working days and the disclosure statement in the sample contract, are written for credit taken wholly or predominantly for personal, domestic or household purposes. A loan to a company or to a sole trader for business use sits largely outside them. Lender responsibility principles and the Fair Trading Act still apply to EFCO's conduct, but the detailed consumer rules on disclosure, hardship and unreasonable fees do not protect a business borrower in the same way. That makes the written answers to the questions above more important for a business than for a car buyer, not less.
Halal alternatives to check before you sign
- Supplier credit: a supplier who delivers stock or equipment on 30 or 60 day terms at the same price is extending a sale on deferred payment, which is permissible and usually free.
- Equity from family or partners: a musharakah share of the business in exchange for capital carries no fixed charge, at the cost of giving up part of the ownership EFCO's start-up page promises you keep.
- Government support through business.govt.nz: the Regional Business Partner Network's Management Capability Development Fund subsidises up to 50% of approved training to $5,000 a year excluding GST, and the Funding Explorer lists fifteen government programmes, none of which is a loan.
- Buying secondhand for cash and claiming the three twenty-thirds GST credit on an unregistered seller's price, which often beats financing a new asset.
- Charity lenders do not help here: Good Shepherd's page says it cannot assist when your only income is self-employment, and Ngā Tāngata does not lend for vehicles or business purposes.
- The AhlulBayt Centre's qard hasan fund is for members' short-term needs with a one-year term, not business capital.
The broader playbook for a Muslim-owned business, including the equity and grant routes, is in funding a Muslim-owned business in NZ. EFCO is the right answer when the thing you need is a specific asset, the asset will earn more than the profit rate, and you have exhausted free credit.
Verdict by business type
A tradie buying a van or ute: this is the case EFCO's product was built for and certified for. Apply directly to avoid the referral fee, get the rate and total profit in writing, confirm monthly instalments, claim the GST on the cash price in the period you sign, and use the Investment Boost if the vehicle is new. A dairy or restaurant owner buying stock: stock is a saleable asset so a Murabaha works in principle, but stock turns over faster than a finance term, and you should ask how EFCO identifies the goods it is selling you and whether the contract allows resale before the balance is paid, because the sample forbids disposing of secured property.
A professional buying equipment, such as a dentist, physiotherapist or printer: the Asset Financing page names medical equipment and includes installation and training in the financed amount, which is useful, and the tax treatment is clean. Negotiate the security down to the equipment itself. A start-up needing working capital for wages and marketing: this use is advertised but not named in the certificate, and a Murabaha cannot sell you wages. Ask which contract applies and consider that a smaller cash start, supplier terms and family equity may be both cheaper and cleaner. Compare all of these against the market in our comparison tool. Facts checked against efco.co.nz, ird.govt.nz, business.govt.nz on 25 September 2026.
Frequently asked questions
Is EFCO business finance Sharia certified?
The asset Murabaha product is. The Shariyah Review Bureau certificate dated 24 December 2020 approves EFCO's Murabaha Assets Financing Product against AAOIFI standards, and an annual Sharia Committee report for the year to 31 March 2024 confirms compliance. Uses advertised as cash-flow bridging or staff hiring are not named in the certificate, so ask which contract applies.
What profit rate does EFCO charge businesses?
The published schedule of fees says profit margin rates start from 9% per annum, and the sample contract shows an illustrative rate of 18.5008%. The actual rate is quoted per application, fixed for the whole term, and the repayable amount does not change. Ask for the rate, the total profit in dollars and the Murabaha price in writing before signing.
Who owns the asset during an EFCO Murabaha?
You do, subject to EFCO's security. The sample contract passes ownership and all risk to you on delivery while EFCO retains legal title as security until the balance payable is cleared, registers a security interest on the PPSR, and requires joint-name insurance. You cannot sell, trade in or grant another security over the asset until EFCO is paid.
Can a GST-registered business claim GST on an EFCO-financed asset?
Yes, to the extent the asset is used in your taxable activity. The contract makes you responsible for GST on the supply, and IRD's rules let you claim it as input tax. For hire purchase the time of supply is the date of the agreement, so the whole claim falls in that period, and the finance charge is exempt from GST; confirm with your accountant that the Murabaha profit is treated the same way.
Can I depreciate an asset bought through EFCO?
Yes. IRD allows depreciation on capital assets you own, lease or buy under hire purchase and use in the business. Assets under $1,000 can be written off at once, new assets bought from 22 May 2025 qualify for the 20% Investment Boost deduction with the remaining 80% depreciated normally, and a GST-registered business depreciates the GST-exclusive price.
Compare providers in your region
See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
Does the CCCFA protect a business borrower with EFCO?
Mostly not. The CCCFA's consumer credit rules, including the cancellation right and the disclosure statement in EFCO's sample contract, apply to credit taken mainly for personal or household purposes. Business borrowing sits largely outside them, so written answers on rate, settlement, security and guarantees are your main protection.
