Understanding Funding Solutions for Small Businesses in New Zealand

For small businesses in New Zealand, securing access to the right financial solutions and funding options is critical to ensuring ongoing growth and sustainable operations.

From government grants to innovative financial products, there are numerous solutions for small and medium-sized enterprises (SMEs) to consider.

In this article, we will help you understand the small business funding solutions available for businesses in New Zealand.

Government Grants and Support

New Zealand’s government provides several grants and support programs for small businesses. Each program is designed to fund innovation, increase market activity, and support small businesses.

1. Training and Advice Grant

These grants aim to provide SMEs with access to knowledge resources and government assistance to develop business plans and ensure ongoing success. The grants can be used to fund activities such as skills training and other initiatives that will best set up your business to grow. Learn more here.

2. Access to Experts

While this government program is not focused on providing funding, it can be an important avenue of growth and improvement for a small business or start up by connecting business owners with advisors, partners or mentors. Learn more here.

3. Capability Development Vouchers

The government provides capability development vouchers to businesses to support training and development in key business areas. One important consideration is that the co-funding arrangement limits the vouchers to cover only 50% of the cost. Learn more here.

4. Flexi-wage subsidy

The flexi-wage subsidy is designed to assist small businesses and SMEs in the hiring and training of employees on benefits. Labour costs can be significant, and the subsidy aims to assist businesses in finding the skilled team members they need. Learn more here.

It is important to consider your business’s needs and eligibility for any program you consider. For more information about choosing the right type of funding, visit the government’s business website here.

Traditional Bank Loans

Banks provide companies with loans to help inject much needed working capital into their businesses. These loans can be critical for new and start-up businesses that don’t yet have the cash flow to support increased operations or invest in growth.

However, bank loans often require collateral in the form of property or another asset. This asset will serve as security in the event of a default on the loan. Between this and the relatively strict lending criteria, traditional bank loans are not always available for small businesses.

Investment

While the investment industry in New Zealand is not as widespread or large as other places in the world, it is growing. Taking on outside investment in your company, either privately through family and friends or through a venture capital company/angel investor, can ensure your business has the working capital it needs to succeed.

However, investment comes at the cost of equity, as investors will own an agreed percentage of the business, expect a return on their investment, and likely want a say in how the company is run.

Crowdfunding is an alternative method of raising capital and can be particularly effective for innovative projects or start-ups, without significant equity dilution.

ScotPac’s Innovative Funding Solutions

ScotPac, New Zealand and Australia’s largest non-bank lender, offers alternative business funding solutions with a range of customisable financial products designed to meet the diverse needs of small businesses.

1. Invoice Finance

ScotPac’s Invoice Finance solution allows businesses to access the cash locked up in unpaid invoices owed by clients. In other words, it puts tomorrow’s payments into your business today.

How does it work? Delays in payments can cause cash flow gaps that impact your business’s daily operations or ability to invest in new opportunities. With Invoice Finance, you can access the value of your invoices in advance and utilise that working capital as needed. Facility limits range from $10,000 to $150 million, making it suitable for businesses of any size.

Additionally, Invoice Finance does not require any property as collateral as it leverages the invoices themselves as security. As your small business grows your financial facility can scale with it without having to submit a credit increase request.

2. Boost Business Loan

The Boost Business Loan provides up to $200,000 in funds to help SMEs invest in their business growth.

This flexible business loan solution is more easily and quickly accessible for SMEs compared to traditional bank loans. With an application process that is entirely online, no need for security for up to $100,000, and loan terms ranging from 6 to 24 months, it is the quicker, easier and more effective solution for businesses needing quick access to capital for various purposes, whether it is investing in new staff, expanding market reach or just stocking up on assets.

To find out more about how our Boost Business Loans can help you unlock your business’s growth, contact the ScotPac team today.

3. Trade Finance

Trade Finance is a financial solution that boosts small businesses’ purchasing power and provides needed funding to pay overseas or domestic suppliers, establish international trade partnerships and increased stock levels or extend payment terms.

If your business is involved in importing or exporting goods, Trade Finance enables you to facilitate new and ongoing transactions with your business partners by improving your purchasing power. With fast funding for stock, inventory or even raw materials, your growing business will be able to access the capital it needs when it needs it.

As part of our Trade Finance offerings, ScotPac facilitates transactions using TT (telegraphic transfer), Letters of Credit or Documents Against Payment. Plus, our lending specialists can tailor a flexible finance package that works for your business’s needs no matter how simple or complex the trade requirements.

Why choose ScotPac?

At ScotPac, we find a way to say yes. Yes to funding. Yes to success.

We are the largest non-bank lender in New Zealand and Australia, with over 35 years of experience and 8,500 businesses currently being supported. Our business funding solutions are innovative, customisable and nimble to keep pace with your needs and enable your long-term business growth.

To learn more about our business funding solutions in New Zealand or for the advice on which finance solution is right for you, contact our lending specialists.