Most businesses that run short of cash aren't failing. They're growing, waiting on customers, carrying stock or stuck in a season that pays later than it costs. Working capital finance fills that gap. fundU provides working capital loans and cash flow finance of $20,000 to $1m to New Zealand businesses, secured on property, so you can keep paying wages, suppliers and Inland Revenue on time while the money you're owed catches up.
We're a direct lender. Our own credit team looks at your situation and decides, without needing a full set of financial statements for the first look.
What is working capital?
Working capital is the money a business has available to run day to day. In accounting terms, it's current assets (cash, stock and money owed to you) minus current liabilities (suppliers, wages, tax and short-term debt due soon).
The trouble is that a healthy working capital figure on paper doesn't always mean cash in the bank. If most of your current assets are stock on shelves or invoices customers haven't paid, you can look solvent and still struggle to make payroll on Thursday. That's the gap working capital finance is designed for.
Why do profitable businesses run short of cash?
Because profit and cash arrive at different times. You pay for labour and materials now, but get paid weeks or months later.
Common causes we see in New Zealand businesses:
- Slow-paying customers. Terms of 20th of the month following, stretched to 60 or 90 days by large customers.
- Growth. Every new contract or new customer needs more stock, staff and materials before it pays.
- Retentions. Builders and subcontractors have retention money held under the Construction Contracts Act 2002, sometimes for months after practical completion.
- Seasonality. Tourism, hospitality, horticulture and retail can earn most of their year in a few months, but pay costs all year round.
- Rising wage costs. The minimum wage rose to $23.95 an hour from 1 April 2026, and the default KiwiSaver contribution rate increased to 3.5% from the same date, adding to payroll for many employers.
- Tax timing. GST, PAYE and provisional tax don't wait for your customers to pay.
If late payers are the main issue, our guide to late-paying customers and cash flow has practical steps to speed things up alongside any funding.
How does working capital finance compare with other options?
Each cash flow product fits a different job. The right one depends on the size of the gap, how long it will last and what security you have.
| Option | How it works | Size | Strengths | Limitations |
|---|---|---|---|---|
| Bank overdraft | Revolving limit on your business account | Set by the bank | Flexible for small daily swings | Hard to increase quickly; often needs strong financials |
| Invoice finance | Advances against unpaid invoices | Linked to your debtor book | Grows with sales | Only works if you invoice other businesses; ongoing admin |
| Supplier credit | Longer payment terms from suppliers | Varies | No borrowing | Depends on supplier goodwill |
| Unsecured cash flow loan | Short-term loan, usually with a personal guarantee | Small to modest | Fast | Smaller amounts, short terms |
| fundU working capital loan | Lump sum secured on property | $20,000 to $1m | Larger amounts, flexible structure, decisions in-house | Needs property with enough equity and a clear exit |
A property-secured loan is particularly useful when the gap is bigger than your overdraft, when your debtors aren't the kind that suit invoice finance, or when your bank wants up-to-date accounts you don't have yet.
What can working capital finance pay for?
Anything that keeps the business trading and moving forward. Typical uses include:
- Wages and holiday pay through a quiet period or a big ramp-up
- Stock purchases ahead of a busy season
- Paying suppliers on time to protect your terms and pricing
- Materials and subcontractors for a contract before progress payments arrive
- GST, PAYE and provisional tax payments, avoiding penalties
- ACC levies, council rates and insurance renewals that fall due at once
- Covering retentions still held on completed jobs
If you're already behind with Inland Revenue, our IRD tax debt loans are built specifically for clearing arrears.
Which businesses use working capital finance most?
Any business with a gap between paying out and getting paid. In practice, a few sectors come to us again and again because of how their cash cycle works.
- Builders and tradies. Materials and labour go out weekly, payment claims are paid on the contract's timetable, and retentions can be held long after a job is finished. Our guide to construction retentions and payment claims explains the cash flow side in detail, and our construction and trades page covers the sector more broadly.
- Hospitality and tourism. Cafes, restaurants, accommodation and tour operators often earn the bulk of their income over summer or the ski season, then carry fixed costs through the quiet months. See our page on hospitality and tourism funding.
- Retail and wholesale. Stock is bought months ahead of Christmas or a new season, and it's paid for long before it sells.
- Manufacturers and engineers. Raw materials, long production runs and customers on extended terms tie up large sums.
- Rural and horticultural businesses. Harvests, stock sales and payouts come at set times of year, while wages, fuel and contractors are paid all year.
For owners whose trade rises and falls through the year, our guide to seasonal business cash flow has planning tips that work well alongside a funding line.
The common thread is timing. A working capital loan doesn't change how much the business earns; it changes when the cash is available, so you can keep your promises to staff, suppliers and Inland Revenue.
How do I work out how much working capital I need?
Start with your cash flow, not a round number. A simple, honest forecast is worth more than a big request.
- List your cash in. Week by week or month by month, when do you realistically expect customers to pay?
- List your cash out. Wages, PAYE, GST, rent, suppliers, loan repayments, ACC levies and anything seasonal.
- Find the low point. The lowest balance in your forecast shows the size of the gap.
- Add a buffer. Allow for a big customer paying late or a cost you haven't thought of.
- Identify the repayment. When does cash flow recover enough to repay the loan, or what other source will repay it?
Your accountant can help put this together, but a spreadsheet you build yourself is a good start. It also makes the conversation with our credit team faster and more useful.
A working capital loan should close the gap, not hide a problem. If your forecast shows the business losing money every month, talk to us openly. There may be a better structure, such as consolidating expensive debt.
How are working capital loans structured?
We secure the loan on New Zealand property by a first or second mortgage and match the repayments to your cash flow.
- Capitalised interest means there are no scheduled monthly repayments during the term, so every dollar can stay in the business.
- Interest-only keeps repayments low while the balance stays flat, suiting steady trading income.
- Principal and interest reduces the balance over time from ongoing trade.
Security can be your home, a rental, commercial or industrial premises, or some land case by case, owned by you, your company, your family trust or a supporting party. If you already have a bank mortgage, a second mortgage lets you keep it in place. If you're carrying several expensive facilities, business debt consolidation might free up more cash than new borrowing.
Example scenario
A Christchurch hospitality business with two cafes was profitable over the year, but winter trade was slow and a refit at one site had drained the bank account. Wages, PAYE and a GST payment were all due within a few weeks, and the overdraft was already at its limit.
The owners had a rental property in Riccarton worth around $720,000 with a small bank mortgage. fundU lent $120,000 on a second mortgage with capitalised interest, covering wages, tax and suppliers through to spring. Once summer trade picked up, the owners repaid the loan from cash flow and a partial refinance with their bank.
What you'll need
For the first conversation, have these handy:
- A rough cash flow picture showing the gap and when it closes
- The amount you need and what it will pay for
- The property offered as security, who owns it, its approximate value and any existing mortgage
- Your business name and NZBN or company details
- How the loan will be repaid, whether from trading, a refinance or a sale
- Anything we should know about, such as IRD arrears or overdue creditors
We don't need financial statements or tax returns for the initial assessment. Recent bank statements, aged debtor reports or a letter from your accountant are often enough to support the picture later.
Get cash flow back on track
Good businesses deserve a fair go when timing works against them. If you have property to offer as security and a clear sense of when cash flow will recover, working capital finance from fundU can give you the room you need.
Enquiring is free and doesn't affect your credit score. Call 09 875 4577 or see if you qualify and a lending specialist will be in touch.
Frequently asked questions
What is working capital finance?
Working capital finance is funding that covers the day-to-day costs of running a business, such as wages, stock, rent, suppliers and tax, while you wait for revenue to come in. fundU provides working capital loans of $20,000 to $1m secured on New Zealand property, which lets us lend larger amounts than unsecured cash flow products.
How is a working capital loan different from an overdraft?
An overdraft is an ongoing facility you draw on and repay as cash moves in and out, usually set up with your bank. A fundU working capital loan is a lump sum for a defined period, secured on property and repaid from a clear source. It suits larger or longer gaps that an overdraft limit won't cover.
Why would a profitable business need working capital finance?
Profit and cash arrive at different times. A business can be profitable on paper but short of cash because customers pay slowly, stock has to be bought well ahead of sales, or retentions are held on construction jobs. Working capital finance covers that timing gap so growth doesn't stall.
Can I use a working capital loan to pay GST or PAYE?
Yes. Paying tax on time is a legitimate working capital use, and it stops IRD penalties and interest building up. If you're already behind with Inland Revenue, fundU's IRD tax debt loans are designed specifically to pay out arrears and give the business a clean start.
Do I need to make monthly repayments on working capital finance?
Not necessarily. Depending on the approved terms, fundU can structure a working capital loan with capitalised interest so there are no scheduled monthly repayments during the term. That keeps cash in the business when it's needed most. Interest-only and principal and interest options are also available.
How much working capital can I borrow?
fundU lends $20,000 to $1m. The amount depends on the value of the property offered as security, what's already owed against it, the size of your cash flow gap and how the loan will be repaid. A lending specialist will help you work out a realistic figure that leaves a sensible buffer.
A practical next step
Ready to see what's possible?
Tell us what the business needs, when you need it and what property is available. A fundU lending specialist will call you back to talk it through — enquiring is free and won't affect your credit score.