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Why now could be the right time to diversify

How many of your clients are self-employed? Whether you know the exact figure or not, you could be pleasantly surprised at the breadth of opportunities offered by your own client base.

Research* conducted earlier this year revealed that approx. one in five (22%) small business owners found adviser support and advice to be one of the most valuable sources of external support. As a trusted adviser with an existing client base, investing a little deeper into client relationships to identify and fill a growing niche in their business requirements as well could help grow your business.

“Having a trusted adviser can make a huge difference to business confidence, and now is the time to reach out and see how you can help,” says alternative lender Prospa’s Managing Director, Adrienne Begbie.

With up to 66% of small business owners reporting that they need funds to achieve their business priorities for FY23*, Begbie believes that advisers who have been wanting to diversify into small business lending will find a growing demand in market now.

“It’s no secret that the last two years have been difficult for most small businesses, with the pandemic impacting trade, staffing and supply chains. It seems getting access to funding is a high priority for businesses looking to get back on track, making it a great opportunity for advisers to be assisting their small business clients.”

Access to finance can make all the difference to a business that commonly need access to funds to invest in tools and systems to make their business more efficient and overcome supply chain issues, and for when opportunities to scale or reduce costs present themselves and the business owner is keen to take advantage but doesn’t quite have the capital to jump in.

Alternative lender Prospa, who specialises in small businesses, has developed two main products to meet some of their most common financing needs with features designed to specifically cater for small business requirements. It’s important that advisers working with small businesses understand the options available, and which kind of financing is most appropriate for their needs. So, what product should you be recommending to your SME clients?

Small business loan

This product is a term loan – a lump sum, paid back over a set term, generally used for a one-off business expense – like buying stock, marketing campaigns or investing in capital equipment.
Prospa’s small business loan provides successful SME applicants with access to up to $500,000 over a fixed term with tailored options such as fixed daily or weekly repayments.

Line of credit

For your SME clients who are after ongoing access to funds, Prospa’s line of credit allows them to dip in when they need to and they only pay interest on the funds they use.  Line facilities can be from $2,000 and up to $150,000 and can be used and reused as much or as little as the business owner wants.
Many businesses use a line of credit as a safety net to more effectively manage their cashflow, especially when they may encounter unexpected gaps or seasonal demands. The line is available over a 24-month term, which can also be renewed.

The beauty of dealing with an alternative lender like Prospa, is that they’re geared up to help SMEs succeed. So, applications are deliberately simple, paperwork is minimal, and your client could have a decision on the same day, with funds in their account a day after. There’s also no asset security required upfront for your client to access approved funds up to $150,000.

“As banks further restrict their lending appetite, it’s important for small business owners to know that there are alternative lenders available within the market. We believe advisers are in the best position to educate them on their options with non-bank lenders and provide funding products that suit their needs,” concludes Begbie.

Advisers who choose to partner with Prospa can access a truly easy way to diversify, through a flexible tailored referral model, without the need for extensive training. In fact, in just minutes your business can be set up to offer a new service to small business clients, subsequently adding another income stream to your business model.

To ensure you’re equipped with the tools to support your small business clients, get in touch with Prospa on 0800 005 834 or visit https://www.prospa.co.nz/partner-with-us

*About the Research

This survey was conducted online by One Picture between 27th January – 10th February 2022 amongst a sample of 525 small business owners in New Zealand with 1 to 50 employees.

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