Prospa offers new loan option

A new Line of Credit service is being offered by the small business specialist Prospa.

Tuesday, July 5th 2022, 11:08AM

by Eric Frykberg

It enables companies to draw on a loan facility of up to $150,000, as and when they need it, and only pay interest on the money that is actually used.

It spans a 24-month period but has an option to renew.

The product was aimed to help business owners cover staff wages or repay a supplier invoice, offering peace of mind and flexibility during times of heavy cash outgoings.

These problems have been made more difficult due to Covid-based uncertainty.

Prospa New Zealand managing director, Adrienne Begbie, said the company surveyed customers and found there was a need for such a service.

“From our survey, and through anecdotal feedback from advisors, we’re hearing about the demand for more flexible funding products for small business operators,” she said.

“Flexibility is the key after the unexpected challenges faced over the past few years. We’re witnessing small business owners seek access to funding to assist with temporary cash flow gaps as they navigate through (a difficult) environment.

Begbie said the Covid-19 pandemic had changed the financial circumstances of many small businesses, and there was a lot more flexibility required to ride the waves of uncertainty that have followed.

Prospa quoted a small business owner, Deborah Delport, who runs an engineering company. When incoming payments started becoming unpredictable due to the impact of Covid-19, Deborah said she felt a great sense of security having access to Prospa’s Line of Credit.

"During Covid I anticipated a cash dip, recently it has been taking longer to receive payments, so when Prospa reached out about their Line of Credit it was like they read my mind,” Delport said.

“It has been a great buffer for my business, and it's nice to know that funds are available in the background to fall back on if needed, while not having to pay interest on funds I don’t use.”
Prospa's service is available to companies that have been trading for at least six months and have a monthly turnover of over $5000.

Tags: Prospa