Infographic - 6 types of bus finance

Cash flow lending

Cash flow loans are usually short-term loans to help you maximise a business opportunity or manage a lumpy cash flow. 

Features can include faster applications and less paperwork, cash-flow friendly repayments and transparency around the total amount to be repaid. 

Keep in mind that not all lenders’ products are created equal: some don’t offer a fixed upfront price, leaving owners susceptible to interest rate rises, while others may include hidden fees and charges.  

Invoice finance

Invoice finance can help small businesses like tradies maintain cash flow when waiting for customers to pay. There are two types of invoice financing: 

  • Invoice factoring: Where you sell your invoices to a third party at a reduced cost in exchange for instant payment. 
  • Invoice finance: Where you use an invoice you have issued as security to get a loan. 

Some invoice finance providers offer 100% of the invoice value in exchange for a drawdown fee and an ongoing weekly interest rate. Invoice financing may be useful if you often have to wait for payment after completing projects and purchasing materials. To use invoice finance you need to be the kind of business that issues invoices – like a professional services firm or a tradie, rather than a cash-based business like a cafe. 


Popular in the social and charitable space, crowdfunding has recently matured in the business arena, with platforms like Snowball Effect facilitating substantial amounts of private investment in New Zealand. 

The most common crowdfunding model is based on rewards and incentives. A ‘backer’ pledges money to support your business or product idea in exchange for a discount on the new product or another reward. Rewards could range from a percentage of revenue to free products or the opportunity to help in the design process. 

On the upside, business owners keep full ownership and clients are investors – providing direct access to market feedback. For investors, there may be low risk for small amounts. 

On the downside, some platforms might not provide access to funds if the overall goal isn’t reached. Business owners may need to commit time to promoting the campaign and dealing with backers, and still need to deliver on their promises if things don’t go to plan. 

Crowdfunding may suit a businesses just starting out rather than an established business. It may not be a viable solution if you need help managing cash flow. 

Need access to cash, quickly? See how a Prospa Small Business Loan could help you get much needed funds for your business. 

Angel investors

Angel investors are often business owners or high net worth individuals who see the potential in your business and want some involvement. They usually invest in industry sectors they’re familiar with and will want a targeted return on their investment. They may structure their involvement as a loan, or as equity, or a combination of both.  

Angel investors often come on board in the early stages of a business and contribute their experience and knowledge in addition to funding. It can be important to consider choosing an investor who can add value and has the same vision for your business that you do. 

Venture capitalists

Venture capitalists (VCs) are investment companies or fund managers who usually provide cash in return for part-ownership of your business. They tend to look at larger businesses and differ from angel investors in that they typically want to invest larger amounts and have more comprehensive requirements. 

VCs may not want to play an active role in the management of your business, instead taking a seat on your board. To find out more about venture capital opportunities in NZ, check out the NZVCA. 

Small business loans

Prospa small business loans offer flexible repayment options that work with business cash flow. Decisions are fast and funding is possible in 24 hours.  

There’s no asset security required upfront to access Prospa funding up to $150K and, at the time of publication, borrowers can choose to delay repayments for the first four weeks (loan term will be extended and interest will accrue from settlement until the end of term).