As we head into New Zealand’s summer season, SMEs often face cash flow challenges. Increased demand, additional staffing, and inventory purchases can strain budgets. A working capital loan could be the perfect solution to manage these fluctuations and ensure your business is ready for the busy months ahead.

Why Now is the Time for a Working Capital Loan:

Seasonal Cash Flow Gaps: For a lot of businesses, December and January are periods of low trading volume and revenues dip as they and their customers temporarily cease trading for these months. For businesses that do not have a significant cashflow buffer in their working capital reserves, this can mean they are left scrambling to meet bills like wages, stock purchases, rent and other operational costs. A Working Capital Loan can help businesses to keep their bills paid whilst revenues are down over the holiday season. 

Prepare for the Busy Period: Whilst many businesses take a short break over the holiday period, for some this is their peak trading season and that often means that they need a bit of extra working capital to help them execute on opportunities to drive revenues and increase profits throughout December and January. A lot of these kinds of businesses use their cash reserves to keep the doors open throughout the rest of the year and so when December rolls around again, they are left in a weak treasury position. Maybe they have an opportunity to buy a larger shipment of stock at a discount, maybe they need to employ some extra casual staff to help them meet demand on the floor, either way a working capital loan can be very effective in helping businesses to succeed through their busiest trading period. 

Flexible and Fast: The majority of working capital loans have simple processes to establish, don’t require significant information to get approved and are flexible in their structure. This means that they can be both an effective short-term solution and also help to provide a long-term solution to an ongoing working capital gap. Most working capital loans are paid down on a regular weekly basis toward principal and interest. In some instances, when secured against property, payments can also be fully capitalized, meaning no payments are required until the loan is settled. Generally working capital loans can be paid down in full early, incurring no additional charges, which is prudent if the loan is for a short-term use. 

Why Capital Connect?

At Capital Connect, we work with a broad panel of lenders to find the right working capital loan for your business, offering competitive rates and fast approvals. Our team takes the hassle out of securing the right funding so you can focus on growth.

Ziggy- Commercial Business Partner

Ready to secure the funding your business needs? Contact Ziggy directly at ziggy@capitalconnect.co.nz or call 0274 687 409 to learn more.