Why Continuing Credit Could Be the Next Best Thing for Your Business

Small business lender Prospa is offering a new line of credit for small businesses.

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Small business lender Prospa is offering a new line of credit for small businesses.

When Susan Toft lost her government job two years ago in Australia, her side laundry business suddenly became her main job.

In some ways, being laid off was a blessing, giving her the opportunity to make real success in her laundry business. Unfortunately, the banks didn’t back her up with a business credit card because “The Laundry Lady” had only recently been restructured into a business.

Small business lender Prospa was happy to provide a line of credit, which Toft needed when its cash flow plummeted after losing contractors. The readily available funds helped the business to continue and enabled it to pay its contractors on time, even when there were temporary shortfalls.

“Ease of access was the reason we wanted a line of credit rather than a loan, because we also have access to funds when we need it. It turned out to be the right decision, because I could dipping into available funds to pay my contractors and handing over the money the following week if I needed it,” says Toft.

The Covid-19 pandemic has changed the financial situation of many individuals and small businesses, and much more flexibility is needed to ride the waves of uncertainty that have followed.

Adrienne Begbie, Managing Director of Prospa New Zealand.

PROVIDED

Adrienne Begbie, Managing Director of Prospa New Zealand.

Prospa New Zealand chief executive Adrienne Begbie said the new environment requires a different approach from lenders, one that needs to be more focused on the unique needs of small businesses.

“We’ve seen a demand for more flexible financing products. Access to financing can make or break small businesses, whether it’s to help overcome temporary cash flow hurdles or for a company looking for its next big one. pause,” says Begbie.

A survey* conducted by Prospa earlier this year found that two out of three small businesses value flexibility the most because it gives them the ability to control their cash flow and manage their finances during times of high spending.

Following the success of the Line of Credit product which helped Australian small businesses grow, it is now available in New Zealand, offering Kiwi small business owners the ability to access funds as needed.

Prospa launched its new line of credit product to give small businesses like The Laundry Lady ongoing access to funds between $2,000 and $150,000. Interest is only paid when and while the funds are used by the business.

Having a line of credit to rely on can help small business owners manage their cash flow with confidence.

PEXELS

Having a line of credit to rely on can help small business owners manage their cash flow with confidence.

Small businesses that have been in business for at least six months and have a monthly turnover of more than $6,000 are eligible to apply. The online application process is quick and only requires an active New Zealand Business Number (NZBN), business bank details and a driving licence. The amount of the credit line and the interest rate are determined by the particular situation of the company.

Having a line of credit to rely on can help small business owners confidently manage cash flow fluctuations, such as needing extra staff for a large restaurant reservation, or raising funds for Obtain additional inventory during busy periods. It also gives them the opportunity to repay the money quickly after paying the bills.

Begbie says Prospa is there to meet the needs of small businesses typically underserved by traditional lenders.

“We understand that small business owners can be paralyzed to take this crucial next step without access to funds. We want to see them succeed and thrive and we know they can do so with the right support,” she says.

Visit prospa.co.nz to see if a Prospa line of credit or small business loan is right for your business. You can also call our team on 0800 005 797 to discuss how we can help you.

* The survey was conducted online via One Picture between January 27 and February 10, 2022, among a sample of 525 small business owners in New Zealand with between one and 50 employees.