The Four Rs of working with lenders to access the Business Finance Guarantee Scheme

Business AdvisoryCash FlowFinanceLending

6 April 2020

These are unsettling times for households and businesses. Financial stress is being felt across the board as the impacts of COVID-19 ripple through our community.

To support the New Zealand economy during COVID-19, the Government announced this week that businesses can start applying to their banks for loans under the Business Finance Guarantee Scheme (BFGS).

The BFGS is designed to help businesses with cashflow and operating expenses. Under the scheme, businesses with annual revenue between $250,000 and $80 million can apply to their banks for loans up to $500,000, for up to three years. The New Zealand Government guarantees 80 per cent of the loan, while the bank guarantees the remaining 20 per cent.

As funds are limited, and the availability of loans is subject to certain exclusions, we suggest you work with a Lending Adviser to ensure you understand your position and the support that may be available to you.

As the Findex Lending team work through each client’s situation, we have implemented a process called Review, Restructure, Refinance, Replace – The Four Rs. This process is designed to assist our clients to understand their current position and lending arrangements and reposition to maximise the support and resources available to them.

The Four Rs

1. Review

  • What government incentives are available (personal and business)?

  • Your current spending and expenses and apply for discounts, waivers and reductions where possible.

  • Your finances. What loans do you have? What is the rate of interest and repayments?

  • Your eligibility to access some of your Kiwisaver?

  • Review your insurances – if your premises are unoccupied, make sure you have cover. Check if there are any options to defer payments on your policy.

  • Review any Business Insurances – there may be changes that can be made to reduce premiums (Premium waivers).

  • Consider any hardship provisions and opportunity to defer payments with your own personal insurances (life insurance, income protection, trauma).

2. Restructure

  • Reduce unnecessary spending.

  • Reduce your loan repayments (with rates reducing over the past 12 months, you may be paying a higher amount than required).

  • Apply for relief.

  • Apply for a new loan under the Business Finance Guarantee Scheme.

  • Consider Trade Credit Insurance if you are still operating and taking on new customers.

3. Refinance

  • Price check the market to ensure you are getting the best deal (negotiate with knowledge).

  • Consolidate loans and credit cards.

  • Consolidate any business loans, equipment or car loans.

4. Replace

  • With government tax incentives, it may be a good time to replace that piece of equipment:

- Some equipment is being sold at heavily discounted prices.

- Receive better terms on new loans (rates have reduced).

- Cash in old equipment and place proceeds in cashflow.

  • Consider key man protection for key employees, who have come to the fore during this period. They are hard to replace, and their loss may have a significant impact.

All major Lenders (main banks) have support and assistance packages in place for their clients. The landscape is moving so quickly and policies are evolving each day so it’s important to consult with your Lending Adviser to understand and access the latest support and assistance available to you.

To help better understand the type of support that may be available please see below the links to all the Banks that are involved in the Business Finance Guarantee Scheme.





Heartland Bank:




All the banks listed above offer repayment deferrals and Interest only structures on both business and residential mortgages, including plant and equipment finance. Applications for a loan under the Business Finance Guarantee Scheme are open from 2 April 2020 with loans drawn down on or before 30 September 2020, or until the scheme funds have been allocated.

If you need support with any Bank, or just need someone to talk to about options, please contact the Findex Lending team today.

Findex has developed a Government Stimulus Health Check and free Business Wellbeing Toolkit to help businesses manage potential risks and take full advantage of eligible stimulus assistance. Book your Health Check here.


Findex Financial Services NZ Limited, trading as Findex

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April 2020

Author: Brendan Hearle

Brendan is an Associate Partner for Lending and Finance in New Zealand. Brendan provides debt structuring services for all business clients within the family office and sources funding from banks and financiers directly to ensure the clients best interests are always met or exceeded. Brendan has a wealth of experience, having worked for New Zealand and Offshore Banks and Financiers in Sales, Risk, Strategy and Management roles for the past 20 years.