New unsecured loan offer as BNZ chases SME market

BNZ is offering small businesses unsecured loans of up to $50,000 on digital only applications through its new Merchant Flexi Loan.

The small loans are not being offered through mortgage or business loan advisers as the bank appears to be making a concerted effort to match SME lending from non-bank lenders such as Prospa, Scotpac, Bizwise and Zip.

The bank says it is offering eligible businesses a simple way to manage cash flow and fuel growth, with no interest and just a one-off fee.

Using its digital platform it can take as little as three minutes for a business to get approval for a loan, Karna Luke, BNZ customer products and services executive says. 

Small businesses don’t need to provide paperwork, such as financial statements or business plans.

Instead the bank uses their card sales data from the past 12 months to determine loan eligibility and calculate a personalised loan offer.

Once accepted, the BNZ says the funds are available within two business days. Businesses can then choose a preferred repayment rate at 10-30% of daily card sales and are automatically deducted.

“This means repayments are higher when sales are strong and lower when business is quieter, helping owners stay focused on operations with cash flow under control,” Luke says.

“The new lending delivers the speed and flexibility small businesses need to grow.”

Expanding business

BNZ customer Jamie Stewart, who has successful Waffle Haus café in Akaroa and expanded to Christchurch, opening on New Regent Street in December 2020 is now planning on Merchant Flexi Loan to fund expansion into a third branch at The Colombo shopping centre.

Stewart says when the Merchant Flexi Loan became available, the timing was perfect because he was looking at a significant equipment investment for the new café and wanted to preserve working capital for other business needs.

For Stewart, whose capital is invested in growing his business rather than property assets that could be used as security, the merchant sales-based approach offers an alternative to traditional secured lending. Instead of needing collateral, the loan is based on proven sales performance.

The flat fee structure also appealed him. It has worked out at about 2.5% of the loan amount, which he says is substantially cheaper than a traditional business loan.

With trading patterns that vary Stewart says he appreciates having repayments that adjust accordingly.

“The winter period is slightly quieter than the summer and school holiday peaks and having repayments that flex with our natural business rhythms makes financial planning much easier.”

Fast funding when opportunities arise

Luke says timing is critical when business opportunities emerge, which is why the process of applying for a Merchant Flexi Loan is as fast and simple as possible.

Customers often need to move fast to day competitive and grow, whether that’s securing new equipment, expanding their premises, or taking advantage of seasonal demand, he says.

“By streamlining the application process and using data we already have, we can help them seize those opportunities without delay.”