Opportunities arise in a changing landscape

As tight lending conditions continue to weigh on the sector, this month we helped two New Zealand business owners take on new projects.

Recent events have highlighted that the path to recovery isn’t a sprint, rather it is an endurance race with a few bumps along the way.

As unsettling as this can be, we’ve seen first-hand that many New Zealand businesses are responding to the current challenges with innovation, commitment, and entrepreneurial spirit. We’re talking with a number of business brokers who are seeing opportunities arise, and potential buyers and investors willing to take on new projects.

One of the key hurdles to this remains securing business funding through mainstream lenders, with tight lending conditions still weighing on the sector. As highlighted in a recent press release by the Reserve Bank of New Zealand, a longer-term view is required. And that’s what Merx is in the position and mindset to offer.

This month, we facilitated new opportunities for our clients to grow and expand – more details below.

Bridging Finance

Client Scenario: This client was looking to sell one hospitality business and buy another. To achieve this, they required funds to settle the purchase while being in the process of selling the existing business. However, the bank was reluctant to provide a line of credit due to perceived risk around the hospitality sector in the current environment. Plus, the total level of debt against their existing property didn’t fit within the bank’s loan-to-value ratio requirements.

Merx Solution: In the course of our assessment, we were able to validate that the client had a proven track record in the hospitality industry, and had shown that their trading performance after lockdown was returning to stability. Based on these considerations, we provided the $400k loan they required, secured by GSA over their business and a second mortgage over their property. 

Equity Withdrawal

Client Scenario: This business owner was currently in the market for a new home, and needed extra funding to cover the deposit required on the purchase and allow time to sell their existing property. Unable to raise these funds via mainstream lending, they contacted Merx for a solution. 

Merx Solution: We undertook a comprehensive assessment of their financial picture, including the fact that their business had no debt. Based on our assessment and their robust plans, we provided $65k in funds, secured by the business and a new mortgage on their property. The equity withdrawal will allow our client to make a move with confidence.

Give us a call on 09 215 9364 or email us at fundgrowth@merx.co.nz if you’d like to set up a time to talk.

We'd love to hear from you. Please fill in the form below to request a callback

Contact Merx and see how we can help you on your way.