Funding for Small Businesses in New Zealand

Funding for Small Businesses in New Zealand
Funding for Small Businesses in New Zealand
September 26, 2016

New businesses are springing up now and then with products that either solve a new problem or provide a better way of solving existing ones. For every new business to grow, they need funds and the size of the funds available to a large extent determine how large and how far the business would succeed with its blueprint.

Traditional financiers are becoming unwilling to help budding businesses

Commercial banks used to be a safe haven for anyone seeking for loans or financial assistance to start-up a business. A good business plan, then, was enough to get you the seed funds that can get your business running. Recently, the tide has changed and most of them are reluctant even to give budding businesses a second thought.

Read also: Merits and Demerits of Purchase Money and Non-purchase Money Loans in Short Sales

New businesses can find other types of financiers

All hope is not lost. New businesses should shift their minds off the traditional banks and focus on the new financiers who are more willing to take the risk of supporting small and emerging businesses. There are locally based business financiers based in Auckland that offer unique types of business funding.

Invoice financing is an interesting type of business financing

Every business is faced with stiff competitions. In order to outwit her competitors, businesses often raise invoice for their products to big buyers without collecting the cash immediately. This is a tight rope for small businesses because if the debts are not paid on time, they may find themselves in a cash-strapped position. Invoice financiers will pay the invoice through a bank draft while the debtors will pay them back.

Read also: A Cash Business Loan might Just be Perfect for a Working Capital

Invoice financing has removed a couple of loan limitations for small businesses

Traditionally, banks would seek for collateral to give out loans to small businesses (which they do not always have). There is also the cash flow records and inventory records and so on that may be required by traditional banks or other forms of financing which small businesses may not be able to provide or may have one that is inadequate for the size of finance they need. Invoice financing has weeded all those obstacles away.

Your debtors will become your security

The interesting part of invoice financing is that your debtors will serve as your security for immediate cash. The document that is most valuable in this type of financing is your invoice. Running a successful invoice financing will help you not to bother about your debtors.

Read also: What You Never Knew about the Small Business Administration Loans

Invoice software will be used to manage your finance

Invoice financiers have developed a new type of invoice finance software which they use to monitor and manage your finance effectively now. Requests for funds can be lodged online through the client interface now. You will also be able to see, at any point in time, your borrowing.

You will have more time to yourself for other engagements

No business owner will go to sleep in peace when their funds are in the hands of debtors. They will be occupied booking one appointment or the other with their debtors to make sure they pay up. This unhealthy habit is one of the risk factors that lead to different health problems like insomnia, cardiac failure and high blood pressure among business owners. With invoice financiers taking care of the debt, you would have more time to yourself and live a healthier life.

You can easily find invoice financiers in Auckland

There are a number of invoice financiers in Auckland who would be willing to take over your financial debt. However, be careful of the invoice financier you pick because not all of them are honest. You can read the reviews of those who have had dealings with them and see what they say.

Read also: Looking for Ways to Finance Your Company: Try Asset Based Lending

Article highlights

  • New businesses need funds to grow.
  • Commercial banks are no longer giving out loans easily.
  • Small business may not have the collateral requirement to take a loan.
  • New financing plans are making life easier for small businesses.
  • Invoice financiers will pay the debt of your invoice.
  • Debt crisis can stagnate or crumble a business.
  • In invoice financing, debtors will serve as your security.
  • Invoice financing does not require any collateral.
  • Software is used for efficient finance management now.
  • Debt burden can make an entrepreneur develop health problems.

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