Refinancing put NZ businesses at risk
(03 March 2010 – New Zealand) New Zealand businesses are delaying the process of securing funding facility rollovers, putting themselves at risk.
Carl Griffiths, an Associate Director at Bancorp Corporate Finance, told Business.Scoop, that a tendency to focus on short term gains rather than long term certainty means that some businesses are gambling by leaving refinancing as late as possible in the hope that costs will drop.
Mr Griffiths added that the recession may appear to be easing but vigilance is still needed.
Certainty counts for a lot in today’s volatile economy, so savvy businesses begin the funding rollover processes a year out and businesses beginning three months out or less take a huge gamble, noted Mr Griffiths.
Credit is still not readily available and there’s a lot of competition for it. Businesses can be caught out because banks are being very selective and exacting, they’re really putting funding applicants under the microscope, Mr Griffiths told Business.Scoop.
Mr Griffiths commented that banks prefer clients that provide an opportunity to offer a whole funding solution rather than just a loan, and the banks are seeking to secure ancillary business such as the company’s transactional business, cash deposits, interest rate swaps, foreign exchange, etc.
Mr Griffiths added that the recession may appear to be easing but vigilance is still needed.
Certainty counts for a lot in today’s volatile economy, so savvy businesses begin the funding rollover processes a year out and businesses beginning three months out or less take a huge gamble, noted Mr Griffiths.
Credit is still not readily available and there’s a lot of competition for it. Businesses can be caught out because banks are being very selective and exacting, they’re really putting funding applicants under the microscope, Mr Griffiths told Business.Scoop.
Mr Griffiths commented that banks prefer clients that provide an opportunity to offer a whole funding solution rather than just a loan, and the banks are seeking to secure ancillary business such as the company’s transactional business, cash deposits, interest rate swaps, foreign exchange, etc.
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