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The Missing Piece? What NZ SMEs Needs to Thrive In 2024
Non-Bank Lending 101: Nailing Funding and How You Can Navigate These Turbulent Times
Sam M
19 Aug • Est Reading Time: 6 minutes
Happy Monday Swavers!
As we start the new week, the headlines have been hard to miss of late—economic shifts, rising costs, and the push for digital adoption are all shaking up the business landscape. But what does this mean for you, especially when it comes to securing the funding your business needs to thrive?
Today, we’re diving into the news driving these changes and how to navigate this in your business and a follow up on our chat about non-banks with some hacks on how to nail your application.
📰 The Financial Pulse: What’s Happening Now
🥇 Economic Pressures and SME Resilience
SMEs remain the backbone of the economy, making up 97% of all businesses in New Zealand. But with inflation and rising operational costs, cash flow management is becoming increasingly challenging.
🥈 The Push for Digital Transformation
The government is ramping up support for digital adoption among SMEs, recognizing that staying competitive means staying current with technology. The Tech Users Association (TUANZ) is leading the charge, calling for expanded initiatives like Digital Boost.
🥉 Shifts in Consumer Spending
Retail has taken a hit, with sales volumes dropping by 12.6%—a trend that echoes the challenges of past economic downturns. This isn’t just a temporary blip; it reflects a broader shift in consumer behaviour.
👇️ Adapting to the New Normal:
Non-bank lenders are increasingly attuned to these shifts, offering solutions that help businesses pivot quickly in response to changing consumer demands. This adaptability can be the difference between thriving and just surviving in today’s market.
👀 The New Financial Landscape: What This Means for SMEs
As the financial environment shifts, flexibility and responsiveness in business funding have never been more critical.
Today’s market demands that businesses can secure funding quickly, without the delays typical of traditional processes. This agility is vital for seizing new opportunities or managing unexpected expenses.
Moreover, as the definition of creditworthiness evolves, there’s a growing recognition of the importance of cash flow and potential, rather than just past credit history. This broader view offers more inclusive opportunities for SMEs.
These evolving practices provide SMEs with more aligned and accessible options to support growth and resilience in today’s challenging environment.
✨Real-World Example: How Non-Bank Lending Made a Difference
Case Study: Auckland Café - From Our Friends At Bizcap
As introduced in our last edition, we’ve seen how non-bank lenders like Bizcap are making a tangible impact on businesses across New Zealand. Here’s a closer look…
😥 The Problem:
An Auckland café was thriving but couldn’t keep up with operational expenses during rapid growth. Traditional banks were slow to respond, and the café needed capital fast.
🤔 The Solution:
Bizcap provided a customised loan that matched the café’s growth trajectory, with fast approval and ongoing support, enabling the café to expand and boost its revenue.
✔️ The Result:
The café was able to purchase new equipment and hire additional staff, significantly boosting their capacity and revenue.
Within months, they saw a marked improvement in their financial stability and business growth. Jane, the owner, shared this;
"Bizcap really understood our needs and delivered exactly when we needed it. Their support has been a game-changer for us." Another quote from Jane reiterated, "The fast approval and tailored loan terms allowed us to expand quickly without any financial stress."
🔍 The Bottom Line
This type of funding isn’t just for businesses that are desperate—it’s for businesses ready to take control of their future.
👌 How To Set Yourself Up for Funding Success
Ready to secure non-bank funding? These are the two pivotal pieces of qualifying criteria you are likely to find:
Financial Readiness:
Make sure your business meets essential financial thresholds. For most industries, a minimum monthly revenue of $10-15k.Business Track Record:
Thankfully, you’ll just need an active NZBN and 5-6 months of trading history. For industries like construction and transport, 1 year is often required.
📃 Key Documents (Desirable):
Before you apply, it's helpful to have these documents:
Business Bank Statements: Think of these as your financial diary, showing how well you manage your cash flow.
Income Statement & Tax Returns: These are your proof of profitability, demonstrating that you're running a healthy, profit-making business.
If you're missing anything, the lender can help you track it down.
Repayments can often be set up on a daily or weekly basis, with terms usually ranging from 3 to 12 months.
📰 Quick News Bites:
SME State of Play👷♂️ : SMEs remain the backbone of New Zealand's economy, accounting for 97% of all firms. Despite challenges, there is cautious optimism due to expected improvements in the cost of living crisis and inflation.
Digital Adoption on the Rise 💻️ : The Tech Users Association (TUANZ) has called on the government to accelerate digital adoption for SMEs, recommending expanded support for the Digital Boost programme and other initiatives.
Slow Spending Impacting Retail Sector 🛍️: Retail faces downturn; sales volumes dropped by 12.6% since the last peak, similar to past crises.
Onwards and Upwards,
P.S. I get it, running a business comes with its fair share of challenges. Don’t let funding be one of them.
P.P.S. Not sure where to start with your funding options? Check your eligibility here.