"We are a country of small-business owners and much of that is funded by residential property."
He had already seen some small-business clients affected by the previous 30 per cent equity requirement, which had been limited to Auckland.
"It's not investors trying to buy more property, just people trying to do other things."
And he said the changes, which the major retail banks have already put into effect, would affect others.
"I certainly have small-business owners who, should they need access to capital now, they would struggle to get it."
Bolton said it might not be such an issue while times remained good for business, but when things got tough, housing equity could be crucial.
"After 2008 business owners were heavily using the buffer from their houses."
And selling one property might not be enough to get people the capital they needed, because the new restrictions would apply across all of their lending, he said.
"People assume the equity in their house will be released when they sell it but that may not happen," Bolton said. "We are going to see some real hardship stories at that point."
Economist Shamubeel Eaqub said it was an issue, but it was hard to know how big the problem was.
The Reserve Bank had some information on how much business lending was secured against property, he said, "but I think it is massively under-reported".
"It is very difficult and very expensive to access funding if you are a small business."
The banking system needed to be overhauled to reprioritise money going into business and entrepreneurship rather than property, because business created long-term prosperity, he said.
But David Tripe, a banking expert at Massey University, poured cold water on the concern.
"It is a plausible issue for a small number of cases," Tripe said.
"If you are dependent on the value of a security, you should be selling the asset, not owning it."
Tripe argued that small-business owners should focus on their companies, not running an investment property business as well.
He said the tightening could be a good thing if it forced a few people to consider what they were doing.
Business New Zealand chief executive Kirk Hope had not heard any concerns from business owners about the loan limits.
"I'm not sure it is going to be that much of an issue," Hope said.
Those affected would probably have low capital in their business and low equity in their properties, he said.
"One way or another they are going to have to face reality."
