It says the no-repayment period will offer “much needed breathing space”
Specialist lender Prospa is ramping up its support for small businesses affected by COVID-19, and is offering loans with no repayments for the first eight weeks between 1 October and the end of November.
Prospa says advisers can support the recovery of small businesses by talking to their clients about alternative funding options beyond the main banks, and says the eight weeks with no repayment will give businesses “much needed extra breathing space” to focus on their recovery.
The lender says it is seeing “continued green shoots” in the small business sector, and noted that demand for credit has risen since June.
“In particular, the building and trade, professional services and retail sectors are showing demand for funding to support recovery,” Prospa stated.
“An improvement in market conditions has also resulted in more New Zealand customers having been able to resume repayments and existing customers on full deferral relief packages accounted for only 7.7% of accounts at 31st July, down from 22.9% at its peak at 15th May.”
Read more: Prospa sees one in five customers resume full repayments
Commenting on the new loan offer, Prospa general manager Adrienne Church said New Zealand businesses are finding ways to “bounce back” despite the difficult and uncertain times.
“New Zealand small business owners are resilient, and they're finding ways to dig deep, bounce back and even pivot what they have traditionally done,” Church said.
“We’re working closely with advisers to help these businesses not just survive but thrive, and deliver timely access to capital to support cashflow and invest in their future.”
Church says that financial advisers are more important to the health and recovery of businesses than ever, and urged them to actively look at options beyond traditional main bank funding.
“Small businesses need their trusted advisers more than ever to navigate these uncertain times, and we encourage our partners to reach out to their small business clients, talk to their BDMs and run their scenarios by us to see how we can help.”
