Working capital finance for New Zealand businesses

Working capital is the money that keeps the lights on between doing the work and getting paid for it. When it runs short, a perfectly healthy business can look like it’s in trouble. The fix is usually simple — fund the gap for as long as it lasts — but getting the size and term right matters more than getting the money an hour sooner.

What is working capital, and why does it run out?

Think of it as cash that’s temporarily stuck. It’s sitting in:

• Stock on the shelves or in the warehouse.
• Debtors — customers who owe you on 20th-of-the-month or 60-day terms.
• Work in progress — jobs started but not yet invoiced.

Meanwhile, wages go out weekly or fortnightly, suppliers want paying, and Inland Revenue has its own calendar. GST, for instance, is generally due on the 28th of the month after your taxable period ends, with the March period due on 7 May and the November period on 15 January.

The squeeze is worst when a business grows. A builder who doubles their workload doubles the materials bought on account and the wages paid before the first progress claim lands. Profits rise; the bank balance falls.

How do I work out my cash gap?

Before choosing a product, put a number on the problem. A quick version:

1. List cash coming in, week by week, for the next 13 weeks — realistic dates, not invoice due dates.
2. List cash going out: wages, rent, suppliers, loan repayments, GST, PAYE and provisional tax.
3. Run a running balance. The lowest point is your peak shortfall.
4. Note how long the balance stays below zero. That’s roughly the term you need.

business.govt.nz suggests forecasting with pessimistic, realistic and optimistic scenarios. Use the pessimistic one to size your facility.

Which finance fits a working capital gap?

Shape of the gap	Usually fits	Why
Repeats every month at different sizes	Line of credit	Draw and repay without reapplying
One-off, clear end date	Cash flow loan or short-term loan	Simple, fixed, finishes when the gap closes
Large, linked to growth or a contract	Property-secured facility	Larger amounts, longer terms
Caused by overdue tax	IRD tax debt funding	Clears the arrears and stops penalties building

If you’ve already done the sums and know the figure, you can apply for working capital now — it takes about a minute.

How fast can working capital be arranged?

For unsecured options, the timeline mostly depends on your statements. With six months of statements for every business account and ID for the directors, our aim of funding within 24 hours is realistic, and smaller amounts can land the same day. Property-backed working capital adds a title check, a value check and a lawyer; amounts from $20k to $250k are possible the same day when everything is ready, and larger amounts are possible within 24–48 hours.

What slows working capital deals most often is uncertainty about the amount. If the figure changes three times during assessment, the lender re-checks each time. Settle the number before applying.

What do lenders want to see for working capital?

• Turnover that supports repayments. Lenders size facilities to what deposits can comfortably carry.
• A purpose that makes sense. “Christmas stock ahead of a strong December” is a clear story.
• A repayment source. Usually the receivables or sales the funding helps create.
• Clean conduct. Few dishonours, tax lodged on time or an arrangement in place.

An illustrative example: a Hamilton wholesale distributor wins a new supermarket line. It must buy three months of stock upfront and is paid on 45-day terms. Its forecast shows a peak shortfall of $180,000 lasting about ten weeks. A short facility sized to the peak — rather than a long loan for a round figure — keeps the cost tied to the actual gap. (Illustrative only.)

How do I keep working capital costs down?

• Collect faster. Shorter payment terms or deposits on large jobs shrink the gap you need to fund.
• Order smarter. Stock that sits for months is working capital asleep.
• Repay early where possible. Check the offer for early repayment terms first.
• Plan around tax dates. Our 2026–27 tax calendar guide shows the big ones.

How do seasonal businesses use working capital finance?

Seasonal businesses have predictable gaps — which makes them good candidates for planned funding. A Bay of Plenty orchard contractor pays harvest crews before packhouse payments arrive; a ski-town retailer stocks up in autumn for winter; a Christmas wholesaler buys in winter for December. In each case, prior years’ bank statements show the cycle clearly, and that history is strong evidence for a lender. Arranging a facility before the season starts, rather than in the middle of the squeeze, also keeps the approval quick.

When should I set up working capital finance?

Before you need it. Approval is fastest when trading is strong and statements look healthy, which is exactly when owners feel least need to borrow. A facility arranged in a good month is ready for the squeeze; one applied for in the middle of the squeeze has to be assessed against weaker statements.

Fund the gap, keep the momentum

When the work is there but the cash is a few weeks behind, working capital finance keeps you moving. You can find out what your business qualifies for in about 60 seconds. Making an enquiry won’t put a mark on your credit file, a single specialist handles it rather than a list of lenders, and you’ll speak with someone who understands trading businesses. Give us accurate figures — turnover, the amount, how long the gap lasts — and we can line up the right structure on the first pass.