We were pleased to hear the Prime Minister’s guidance around how Alert Level 2 could look yesterday (Thursday) and the progress it will bring to New Zealand businesses.
At Level 3, our team is currently working remotely from their homes however we are open for business and providing support to customers. We will be reviewing our remote working approach in line with the Government’s advice around when and how we can move into Level 2.
In the meantime, we understand that businesses may have concerns about future workload and how the rest of the year develops. However, whatever level of service you are providing currently, now is an opportune time to prepare for post-COVID-19.
CEO of Partners Finance & Lease, Francis Fitzgerald explains what business owners/managers can do to ensure they have the best options available if and when applying for support like a bank loan or asset finance during this time.
“We are all working closely with business owners to assist where we can. Examples of support that have been made available to businesses include the Business Finance Guarantee Scheme (more information on this here or go directly through your bank). The Government has also launched a Small Business Cashflow (Loan) Scheme to assist eligible small to medium-sized businesses that have been adversely affected by Covid-19 (more info here).
“Meanwhile, here are some financial fundamentals that businesses can prepare to ensure they are best placed when applying for additional support such as a bank loan or asset finance.”
Prepare for post COVID-19
There are three credit fundamentals that underpin any bank loan or asset finance application. Ensure you can provide your lender with proof of the following:
- Character: This is about you – how can you prove to a lender that you have the ability and honesty to repay the loan? Repeat business is the ultimate testimonial. Positive feedback from your suppliers and clients will also help, your personal circumstances will also be considered.
- Capacity: Aka your business cashflow. All lenders will be looking at your ability to repay the loan. Your financial projections may be uncertain now however try to give the best indication based on what you know currently. Evidence of past performance will also be beneficial, so make sure you have management reports up to March 2020 or your draft accounts for March 2020.
- Collateral: What security do you have available to secure your loan? Existing assets, equity, etc.
If you haven’t already, now is the time to collect the documentation you need to support any finance or loan application. The following will be essential:
1. Cashflow projections and financial reports: Any lender will want to see how you are placed to survive this period. Now is a good time to talk to your accountant to establish your reporting requirements. The Government also has a number of useful cashflow templates that can be downloaded here.
2. Vehicle / equipment / fleet valuations: Seek valuations to prepare for lending against your existing assets. Who do we recognise as a valuer? This could include either a registered valuer or a recognised dealer. While it may not be possible to visit a registered valuer, if you can talk to your dealer now and obtain the information you need, this will be useful for a lender to draw on when the lockdown is lifted.
Useful information to have, includes reg number, the number of KMs on the vehicle, and where applicable a brief description of the vehicle i.e. if it is a truck, what can you tell us about it – stock truck / steel / alloy body / bin tipper / tractor unit / refrigerated curtain sider.
Here to help
Partners Finance & Lease is committed to the safety of our employees, clients, and business partners. We are closely following the Government’s advice and while our Christchurch and Auckland offices are off-limits during Level 3, we are open for business and our team is continuing to work remotely from their homes to ensure we can continue to provide services and support with the least possible disruption.
We will continue to review the impact of COVID-19 closely and update you as required. In the meantime, please contact our team on 0800 727 101 for further information.
Take care and kia kaha.
CEO – Partners Finance & Lease
Please note this article is for informative purposes only and does not constitute legal advice.