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The impact of CCCFA on Kiwi businesses

You’ve all heard about the CCCFA and the negative impact on first home buyers.

Great headlines, but they mask a potentially more significant problem. A number of business owners rely on the equity in their homes to fund working capital in their businesses.

Thankfully the RBNZ tracks the business borrowing against residential mortgages. The data shows that business owners are now fixing loans for longer periods of time.

Based on interest.co.nz’s analysis, a significant proportion of loans will come up for renewal in the coming year. These renewals will be subject to the CCCFA, and if the comments section in interest.co.nz is anything to go by, it’s going to be a stressful process. While the MBIE review of the CCCFA is due to report in April, the terms of reference are looking at lender implementation rather than any change to the policy.

Either way, businesses in New Zealand will need to find solutions to their working capital requirements. As credit becomes less available, we’ll see the inevitable stretching out of payments. Compounded by the impacts of inflation and salary increases, now is the time to plan cash flow management strategies.

If you operate in the B2B space, Lock Finance can help design bespoke cash flow management solutions. From invoice finance facilities to accounts receivable management processes that help businesses not just survive, but thrive.

You may find this invoice finance calculator helpful in seeing how to unlock the power of your unpaid invoices without needing to go to the bank for a mortgage.