Looking for Business Finance in New Zealand?

PHOTO: NonBK Ltd. SUPPLIED

New Zealand has a diverse range of non-bank solutions available for businesses seeking to borrow finance. While traditional banks are often the first port of call, non-bank finance options can offer greater flexibility, speed, and accessibility for businesses with specific needs.

Here are some of the non-bank finance options available to businesses in New Zealand:

Invoice financing

Invoice financing allows businesses to borrow money against their unpaid invoices. This type of finance can be especially useful for businesses that experience cash flow issues due to delayed payment from customers. Invoice financing providers can advance businesses a percentage of the invoice value, typically between 70% and 90%, with the remaining amount paid when the invoice is settled.

Peer-to-peer lending

Peer-to-peer (P2P) lending platforms connect borrowers directly with investors, cutting out traditional financial institutions. P2P lending can offer lower interest rates and greater flexibility than traditional bank loans. Borrowers can apply for a loan online, and investors can choose to fund all or part of the loan. Interest rates and repayment terms are agreed between the borrower and the investors.

Asset financing

Asset financing allows businesses to borrow money to purchase assets, such as vehicles, machinery, or equipment. The asset itself acts as security for the loan. Asset financing can be a useful option for businesses that need to purchase expensive equipment but do not have the capital to do so outright.

Merchant cash advances

Merchant cash advances provide businesses with a lump sum of cash in exchange for a percentage of future credit and debit card sales. This type of finance can be useful for businesses that have a high volume of card sales but need quick access to cash. Merchant cash advances can be expensive, with interest rates typically higher than traditional bank loans.

Crowdfunding

Crowdfunding platforms allow businesses to raise funds from a large number of people, typically through an online campaign. Crowdfunding can be a useful way for new businesses to raise capital or for established businesses to fund specific projects. However, it can be a time-consuming process and requires a compelling pitch to attract investors.

Equity financing

Equity financing involves selling shares in a business in exchange for investment. This type of finance can be useful for businesses that are looking to grow and need additional capital. Equity financing can be risky for investors, as they are taking a stake in the business and will share in any profits or losses.

Non-bank finance options can provide a range of benefits for businesses seeking to borrow finance. These options can offer greater flexibility, speed, and accessibility than traditional bank loans. However, it is important to carefully consider the terms and conditions of each option before committing to borrowing.

Looking for Business Finance?