For six years, this New Zealand building supplies business, importing hand tools, power tools and hardware into major retail chains, had learned to live with thin margins and long payment terms. They knew the rhythm of the sector. Pay for stock early. Get paid late. Manage the gap.
Then the construction slowdown hit.
Trade customers pulled back sharply. Retail demand softened, then partially recovered as DIY picked up. Revenue clawed back to around 80% of its peak, but that was not enough to erase the damage from several hard years. Losses accumulated quietly. So did pressure.
By the start of the 2026 financial year, sales were improving again. Larger retail orders were coming back onto the books. On paper, it looked like progress.
In practice, it created a familiar problem.
Every order looked like momentum. Each one also widened the working capital gap, the period between paying suppliers and receiving payment from customers where cash is committed but not yet collected.
Overseas suppliers needed to be paid before goods shipped. Retail chains paid on their own terms. Between the two sat weeks of cash tied up in invoices, cash the business no longer had room to carry.
This is where many businesses get caught. Demand returns faster than balance sheets recover. Growth arrives before cash flow is ready to support it.
How much growth can a business afford before it starts dictating decisions?
The overdraft was already in place. Fully utilised and fixed in size. It did not expand as orders grew.
The bank was not unsupportive. It was cautious. After several loss-making years and some IRD arrears, the request for more funding triggered process rather than momentum. Year-end accounts. Then a review. Then a decision.
Banks fund history. Growth happens in real time. The business could not wait six months to find out whether it could accept today's orders.
At this stage, most operators recognise the pattern even if they do not name it. They turn down larger orders to protect cash. They delay payments and watch supplier relationships fray. They hope timing improves before pressure compounds.
One delayed payment to an overseas supplier can mean stock arrives a week late. A week late means a retail order ships short. A short shipment means a penalty, a credit note, or a conversation nobody wants to have. The cost of the working capital gap is not abstract. It shows up in lost margin, lost trust and lost momentum.
Who is really funding your customers' payment terms? Them, or you?
This was where Lock Finance entered the picture. As a New Zealand invoice finance provider working with businesses in trade and distribution, they understood the pattern.
Rather than increasing fixed debt, Lock Finance structured an invoice finance facility, a funding arrangement that releases cash tied up in unpaid invoices so a business can access working capital without waiting for customer payment. As invoices were issued to retail customers, funds became available immediately. The facility expanded as sales expanded. No committee. No six-month review cycle.
Working capital stopped being static. It began to move with the business.
As retail orders increased, another pressure emerged upstream.
Importing stock meant committing cash weeks before revenue appeared. Lock Finance also made available an import finance facility. Import finance allows a business to pay overseas suppliers at the point of shipment rather than from its own cash reserves, turning a cash flow problem into a timing solution. The business could now pay suppliers on time and negotiate stronger terms from a position of certainty rather than apology.
Payment certainty replaced delay. Pricing improved. Stock planning became deliberate again.
Before the facility, the business was turning down orders it had spent years trying to win back. After, it could accept them without taking on additional debt.
Invoice finance did not replace the bank. It filled the gap the bank was never designed to cover. Cash stopped being trapped between shipment and payment. Growth stopped increasing risk. The business could do what it was supposed to do. Trade.
The businesses that survive these cycles are rarely the ones with the most demand. They are the ones whose cash flow keeps pace when demand arrives.
.png)
