BNZ tips to boost cash flow without cuts
When clients face economic uncertainty, their instinct is often to cut expenses. But with demand for small business finance still strong—despite a dip in confidence in April—advisers have a timely opportunity to offer smarter, more sustainable cash flow solutions.
Here are five practical strategies from Matt Carnell (pictured), head of business growth at BNZ, that advisers can share with clients:
Extend loan terms to free up capital
Encourage clients to consider longer loan repayment terms. BNZ, for example, offers up to 10-year terms on debt not secured by property.
“The lower repayments create a cash difference,” Carnell said. “That may equate to the hire of a sales superstar, or the purchase of equipment that will deliver operational benefits – paying for itself many times over.”
Longer terms reduce annual repayments, which may unlock additional funding and enable strategic investments. While total interest costs can increase, the trade-off may be worthwhile if the investment leads to stronger returns.
Review and restructure debt for flexibility
Advise clients to regularly reassess their debt structure to keep capital working efficiently. It’s not uncommon for businesses to hold large cash reserves while still paying interest on loans.
“It would be more effective to restructure part of that debt with flexible features – such as the ability to repay and redraw – giving you both cost efficiency and control,” Carnell said.
Loan structures can also be aligned with peak cash periods or set up with interest-only payments until an asset begins generating revenue.
Use forward forecasting to unlock growth lending
Rather than relying solely on historical performance, help clients project future earnings to support borrowing for growth.
“We showed that with the right mix of facilities and repayment terms, the business could borrow up to $19 million,” Carnell said.
Tools like BNZ’s forward-looking Debt Servicing Calculator can help quantify future earnings and support larger lending assessments than past accounts alone might justify.
Convert invoices into immediate cash
For clients in industries with long payment terms, consider invoice financing options such as BNZ’s CashFlow Plus.
“Eligible businesses can borrow up to 80% of the value of an approved invoice as soon as the product is delivered,” Carnell said.
This enables faster access to funds, helping businesses manage cash flow without relying on traditional forms of security.
Consider acquisition for growth and stability
Acquisitions might seem out of reach during periods of tight cash flow, but they can bring benefits such as operational efficiencies and improved profitability.
“Businesses often find they can synergise for greater operational efficiencies, and in turn increase profitability,” Carnell said.
Banks may assess the combined position of both businesses to determine funding capacity, potentially increasing available support for a transaction.
Final thought: Talk to decision makers
Encourage clients to work directly with banking contacts who have the authority to make decisions.
“This often means a business owner is talking to the decision maker, resulting in faster approvals and the confidence that requests won’t get lost in translation,” Carnell said.
