If you’ve noticed it’s getting tougher to secure funding from traditional banks for your business – even when you’re performing well – you’re not imagining things. A significant shift is underway, impacting New Zealand businesses of all sizes, and Capital Connect is here to navigate these challenges with you.
The unintentional culprit? The Basel III banking framework. This international regulatory framework requires banks to hold substantially more capital against loans to operating businesses (especially those without strong property security) compared to home loans. In simple terms, business lending has become less profitable and less of a priority for many banks, leaving many well-deserving businesses without the crucial financial backing they need.
We’re seeing the tangible impact here in NZ:
- Business loan growth has slowed to a mere 1.5% per year.
- Major players like ANZ and Westpac have noticeably scaled back their SME lending.
- Many businesses, despite strong performance, are finding traditional lending avenues blocked.
What if you don’t have property to offer as security? Or perhaps:
- You’re already at your maximum Loan-to-Value Ratio (LVR).
- Your partner’s name is on the property, and they’re not keen to offer it as security.
- The security you do have just doesn’t fit the “bank-friendly” mold.
This is where non-bank lenders are stepping up. They operate outside the constraints of Basel III, allowing them to:
- Take a more flexible and commercial view of your business.
- Often move faster, providing tailored funding solutions.
While some banks, notably BNZ, ASB, and Kiwibank, continue to be strong supporters of business borrowers – and we commend them for it – it’s becoming increasingly important to explore alternatives if you find yourself stuck.
At Capital Connect , we specialize in navigating this evolving landscape. We partner with reputable non-bank lenders to help businesses with:
- Business growth and acquisitions
- Cashflow and working capital needs
- Asset and invoice finance
We understand how to structure deals effectively and leverage our strong lender relationships to find the right solution for your business.
If your bank is no longer able to back your business’s ambitions, we might be able to help you find the financial support you need to thrive.
Summary based on this article from: https://www.interest.co.nz/banking/133761/we-look-weakening-bank-appetite-lend-business-purposes-and-find-after-scrum-got
