Business lending: what you need to know
Business finance is more complex than residential lending, with more hoops to jump through. Most banks won’t lend to business owners unless existing property is used as security.
With a well presented application, though, we achieve strong lending outcomes for business clients. As a business owner, you need to show the bank the bigger picture and demonstrate how your business will succeed.
Don’t go it alone
Work with an experienced adviser who knows how to position a lending application and can work with your accountant from the start to get the bank the right information.
Some industries are under pressure from inflation, higher interest rates and labour shortages. We encourage business owners in those industries to review their overall lending and look at what can be changed to improve cash flow over the next 12 to 18 months.
Buying a business or starting one
Buying an existing business: do thorough due diligence upfront and engage a reputable accountant. Understand the industry and where it is heading.
Starting a business: lenders take a very conservative approach. Without a trading history, start ups are treated as high risk.
Tips for business owners wanting to borrow
Tidy up your accounts: finalise your financial statements and make sure business cash flow is in good order.
Show what comes next: work with your accountant on how the business is tracking for the next financial year. Budgets and cash flow projections for the next 12 months help show the bank your business will keep succeeding after the funding.
How Finsol can help
We prepare and present business lending applications, work with your accountant and approach the lenders most likely to say yes.
Call us on 0800 346 765 or book a free consultation.
Finsol is a financial advisory business founded in Hawke’s Bay in 2010, looking after more than 6,000 clients across New Zealand. This article is general information only and does not take your personal circumstances into account.
