For small and medium sized enterprises, the right lending product can be vital to ensuring ongoing success.

Lending products are financial solutions that allow businesses to borrow money or access a line of credit to fund their ongoing operations or expansion. Whether it is to purchase new assets, such as machinery, invest in growth, or simply manage cash flow and cover gaps in available working capital, lending products can help.

However, between Invoice Finance, Trade Finance and more traditional Business Loans, knowing which financial solution is right for you requires a strong understanding of not just the lending products themselves but also your needs and business goals.

What Are Lending Products?

‘Lending products’ is a fairly broad term that can encompass a wide variety of different financial instruments. The general unifying feature is that the lending product provides funds for a business to borrow with the agreement that it will be repaid over time, usually with interest and other administrative fees.

However, this is not always the case. Some lending products, such as Invoice Finance, work slightly differently. This is why it is important to understand the differences and speak to a lending specialist from ScotPac to help determine which solution is right for your business.

At ScotPac, we specialise in providing customised financial solutions to businesses across all industries in New Zealand. Our Business Loans offer traditional lending facilities to ensure your business has access to the working capital it needs to succeed. On the other hand, Invoice Finance enables businesses to borrow capital against their outstanding invoices, while Trade Finance is designed to provide financial support for international and domestic trade transactions.

So how do you know which of these lending solutions is right for you?

A Guide to Choosing a Lending Product

Before we break down the three different lending products, it is important to work through the preliminary considerations that will inform your decision.

1. What are your financial needs and goals? 

As a business, you might be looking to expand into new markets, purchase new equipment, or simply manage fluctuations in working capital due to seasonal changes in business.

2. What interest rate are you able to secure? 

Interest rates may vary significantly depending on the type of financial or lending product under consideration and your business’s eligibility among other reasons.

3. What can you afford? 

It is important to understand what monthly repayments you can afford as the loan term can affect the total interest you will need to pay. Also, make sure to consider any fees or ongoing charges associated with the lending product.

4. Do you have collateral you can offer as security? 

Secured lending products require collateral, and while this may reduce the interest rate, it is not necessarily suitable for every business. That’s where unsecured loans, which don’t require collateral, or Invoice Finance, which uses your unpaid invoices as collateral, can offer alternative funding options.

Tips for Choosing the Right Lending Product

Invoice Finance

Invoice Finance is a financial product designed to help businesses improve cash flow. If a lack of access to working capital is impacting daily operations or preventing you from taking advantage of growth opportunities, this product leverages the value of your outstanding invoices to provide funding.

Invoice Finance is like a line of credit without the need for property security and the funds can be used for whatever business needs you have.

  • Do you need working capital but do not have property security?
  • Do you need to manage and maintain control of your cash flow?
  • Are you looking to fund contracts, pay off debt, meet payroll, or invest in growth?
  • Do you have slow-to-pay customers and significant value locked up in outstanding invoices?

If you answered yes to these questions, contact our lending specialists for an initial consultation – we may be able to help!

Trade Finance

Trade Finance is a financial product designed to support international and domestic trade transactions. This solution can provide funds for purchasing stock inventory or raw materials locally, or from overseas.

ScotPac’s Trade Finance solutions allow you to invest in new inventory, stock or raw materials – sourced locally or from overseas – with fast funding to ensure you don’t miss any opportunities.

Trade Finance solutions can also be paired with an Invoice Finance facility for a truly comprehensive package.

  • Do you need access to working capital to pay suppliers, whether they are based overseas or in New Zealand?
  • Do you need to increase your stock levels and/or extend payment terms?
  • Are you trying to mitigate the risks of selling to overseas customers?

If the answer to these questions is yes, reach out to our team today to discuss the best Trade Finance solution for your business.

Business Loan

ScotPac provides Business Loan lending facilities that are flexible and versatile to cover a range of business needs. With funding from $10,000 up to $200,000, and no industry restrictions, this lending product can ensure your business has the access to cash it needs within as little as 24 hours.

Business Loans are more conventional compared to other lending products available. Your creditworthiness will determine the interest rate, loan term, and amount you can access.

  • Does your business need to buy new stock, expand its operations, invest in new employees, or cover gaps in cash flow?
  • Have you owned your business and operated at the same location for at least 6 months, with a minimum monthly turnover of $10,000 in total sales?
  • Do you need a flexible financial solution that doesn’t charge extra for an early payout and offers access to funds within 24 hours?

If the answer to these questions is yes, why not speak to a member of the ScotPac lending team today to find out more?

Find the Right Lending Product with ScotPac

If you would like custom advice and guidance in finding the right lending product for your business and its needs, make sure to reach out to ScotPac today. We are the largest non-bank lender across New Zealand and Australia and help thousands of businesses every year secure the working capital they need to succeed.