For most businesses, applying for capital can mean a mountain of paperwork and precious time spent, so Kiwibank has provided a quicker way to do it instead.
The idea of a business doing so well that it’s expanding seems bizarre in this day and age. It flies in the face of the economic climate and the many businesses that have seen their trade crippled by Covid-19. But that’s the reality for Gerrard McCarthy of Micropico Systems Limited, an electrical business that supplies and installs solar panels for farms.
“The last few months have been some of the busiest we’ve had in years,” he says.
“Cows don’t know anything about Covid, obviously. So the farms have kept operating, and we’re essential services so we’ve been incredibly busy over the lockdowns.”
In a time when stories of struggling businesses on the brink of collapse are dominating the headlines, Micropico is doing so well that it’s looking to grow. However, as with every New Zealand SME right now, there’s a crucial ingredient that’s in very short supply. It’s a vital resource for struggling operations to get through quiet spells, but it’s also what will allow a busy business to expand and flourish. And that’s capital.
So the question for those businesses is: where can they access it?
McCarthy found himself asking this same question when he was looking for extra cash to help fuel growth earlier this year. He’d been alerted to the launch of Fast Capital and when he used the tool to apply for a large extension to his overdraft it was approved straight away.
“It was incredibly fast,” he says. “From the time of hitting that link to getting the automated response, it was just a matter of a few minutes.”
Business directors will be painfully familiar with the rigours of accessing working capital. Usually, it involves stacks of documents and records, accountant and lawyer consultations, and an extensive exchange with their bank. The application process can take weeks of precious time that could otherwise be used to manage the business.
Fast Capital provides a shortcut around all that. The product of a venture between Kiwibank and software company Ranqx, the tool is designed to streamline the lending application process by automatically pulling an applicant’s data and financial records from their accounting platform – MYOB AccountRight or Xero.
It then analyses the metrics of the customer’s data on the spot and returns a result within minutes. Fast Capital is the only tool that automatically integrates data from Xero and MYOB AccountRight. While other banks have their own lending tools, they require documents to be uploaded manually and have longer response times.
“I’ve never had a process so quick,” says McCarthy. “All I had to do was give permission for Kiwibank to access my accounting platform and it was done.”
“When you’re expanding, capital is incredibly important. Our bills need to be paid but we’re also waiting to be paid. And when you expand you’ve got a bit of a dip in your profit margin.”
Invoice and trading terms can often create a lot of delays around cash flow for small businesses. Kiwibank general manager of products Nicole Pervan says this is precisely what Fast Capital has been designed to address.
“Working capital needs are usually a ‘just in time’ thing. SMEs might say ‘I’ve got a crunch coming in the next few weeks,’ so now they can get it sorted quickly through Fast Capital.”
Since launching in late July, the tool has already been well-received, with business customers praising its efficiency and the way it removes the hassle of traditional borrowing applications.
“Filling out a normal bank application is usually about many hours, and that’s now been reduced to about five minutes,” says Pervan.
So who can use Fast Capital?
In order to qualify, an applicant needs to be a director of a New Zealand registered limited company, have either a Xero or MYOB AccountRight subscription with at least two years of financial history, and have the Xero Standard or Advisor user role, or MYOB standard administrator or owner role.
Depending on financial history, an applicant can borrow up to $100,000 in the form of either a business loan, business overdraft or a business credit card. After applying through Fast Capital, Kiwibank will get in touch to discuss the best borrowing options.
Pervan says Covid-19 has made the difficulty of accessing working capital a global phenomenon for SMEs. Fast Capital is a custom-made solution for that exact problem.
“SMEs are juggling so many balls and many of them are running fairly close to the wind. That’s not saying they don’t have good businesses, it’s just from a cash flow point of view they might be in a state of high growth which is putting pressure on their finances,” says Pervan.
“That piece of mind [having access to working capital] is key and allows them to get on with their business.”
This content was created in paid partnership with Kiwibank. Learn more about our partnerships here.
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